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Personal Lines Insurance Questions And Answers With Verified Solutions Already Passed!!!
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Personal Lines Insurance Questions And Answers With Verified Solutions Already Passed!!!
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Personal Lines Insurance Questions AndAnswers With Verified Solutions Already
Passed!!!
Accident - ANSWERS✔✔An unforeseen, unknown, unintended event. All
insurance contracts are based on the principle that any losses covered under the
policy will be by accidental means.
Accidental means - ANSWERS✔✔The unexpected or unintended cause of an
accidental bodily injury. Insurers cannot create a different definition than the
dictionary definition of an accident. In other words, no "means" test can be applied.
Additional insured - ANSWERS✔✔A person, firm, or corporation other than the
named insured on a policy and is protected against loss by the terms of the policy.
This is often found in commercial tenant's coverage to indemnify the owner of the
building under lease.
Adjuster - ANSWERS✔✔An individual representing the insurance company and
acting for the company in working on agreements and also determines the amount
of a loss and the liability of the company in the claim
Admitted Company - ANSWERS✔✔An insurance company authorized and
licensed to do business in a given state and has been issued a "certificate of
authority"
Adverse selection - ANSWERS✔✔Selection against the insurance company or the
tendency of more poor risks to buy and maintain insurance than good risks.
,Adverse underwriting decision - ANSWERS✔✔Any decision involving
individually underwriting insurance coverage resulting in termination of existing
insurance, declination of an application, or writing the coverage at higher rates.
Agency - ANSWERS✔✔When one person acts on behalf of another person; an
agency is created with the first person, being the agent, and the second person,
being the principal. The principal generally can be held responsible for acts of its
agents.
Agent - ANSWERS✔✔An individual appointed by an insurance company to
solicit, negotiate, or countersign insurance contracts on its behalf.
Agent's appointment - ANSWERS✔✔The official authorization from an insurance
company granting a licensed individual the authority to act as its agent. In North
Carolina, insurers must notify the NCDOI of appointments and pay the
appointment fee within 15 days of the appointment.
Alien insurance company - ANSWERS✔✔An insurance company formed under
laws of a country other than the United States
All Risk - ANSWERS✔✔Insurance against loss or damage to property arising
from any fortuitous cause except those specifically excluded. This may also be
referred to as "special."
Apparent authority - ANSWERS✔✔The authority of an agent that is created when
the agent oversteps actual authority and when inaction by the insurer does nothing
to counter the public impression that such authority exists.
,Assignment - ANSWERS✔✔The transfer of rights in a policy to someone other
than the policyholder (absolute or collateral). Property and liability contracts do
not allow assignment without the authorization from the insurer.
Avoidance of Risk - ANSWERS✔✔Taking steps to remove a hazard, engage in an
alternative activity, or otherwise end a specific exposure.
Binder - ANSWERS✔✔Temporary evidence of insurance issued by Property or
Casualty agents in lieu of the actual policy until the physical policy is issued. The
maximum period that a binder is in effect is 60 days.
Boycott - ANSWERS✔✔An unfair trade practice that occurs when someone in the
insurance business refuses to have business dealings with another until he or she
complies with certain conditions or concessions.
Broker - ANSWERS✔✔A licensed insurance agent who represents an applicant or
insured in the solicitation, negotiation, or procurement of contracts of insurance.
An insurance broker is not appointed to an insurance company as an agent.
Insurance brokers are independent of a company affiliation
Cancelable - ANSWERS✔✔A contract of insurance that may be terminated by the
insurance company or insured at any time. Most states require notification of
cancellation within a specified number of days based on the reason for cancelation.
For example, in North Carolina, a Personal Auto Policy cancelled for non-payment
of premiums requires a written notice be mailed 15 days before the termination
date.
Cancellation - ANSWERS✔✔The termination of a contract of insurance in force
by a voluntary act of the insurance company or insured.
, Carrier - ANSWERS✔✔An insurance company that "carries" and/or issues the
insurance
Cease and Desist Order - ANSWERS✔✔An order of the State Insurance
Commissioner or of a court requiring that a company or person stop engaging in a
particular act or practice usually involving insurance trade practices.
Claim - ANSWERS✔✔The demand for payment of benefits as provided by the
policy
Clause - ANSWERS✔✔A term used to identify a particular part of a policy or
policy endorsement
Coinsurance - ANSWERS✔✔A requirement typically found in Commercial
Property insurance and may be required in Homeowners contracts. The intent is to
require a minimum amount of insurance coverage in case of a partial loss to the
insured property. The coinsurance amount is generally 80% but could be different.
Coinsurance formula - ANSWERS✔✔The amount carried divided by the amount
required=%x loss= the amount paid on the claim minus any deductible. For
example, if J has a building valued at $100,000, to meet the coinsurance
requirement of 80%, J must carry at least $80,000 in coverage.
Commissioner - ANSWERS✔✔The title of the head of the Department of
Insurance in most states
Concealment - ANSWERS✔✔The withholding of facts by an applicant for
insurance that affects an insurance risk or loss. Concealment is a form of
attempting to practice adverse selection.
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