USAA Licensing Exam Questions and Answers All Correct

USAA Licensing Exam Questions and Answers All Correct Insurance - Answer-Transfer of risk from one person or organization to an insurance company Indemnity - Answer-The principle to restore the insured to the pre-loss economic or financial condition. Law of Large numbers - Answer-Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest - Answer-Proof that someone stands to lose financially if a loss occurs; must exist at the time of the loss in property and casualty insurance Binder - Answer-Temporary insurance contract; commits the company to act as if a policy has been issued Peril - Answer-Cause of loss Direct Loss - Answer-Immediate actual physical damage to tangible property Indirect loss - Answer-Inability to use property as a result of a direct loss Risk - Answer-Chance of loss; uncertainty of loss What are the two types of risk? - Answer-Speculative and Pure Speculative Risk - Answer-Involves the simultaneous chance of gain or loss: is not insurable Pure Risk - Answer-a risk that presents the chance of loss but no opportunity for gain (insurable) What are two examples of speculative risk? - Answer-Gambling Investing