Texas All lines adjuster license
insurance terms and related concepts
Chapter 1-Exam-Graded A
Law of Large Numbers - ANS-the more examples used to develop any statistic, the
more reliable the statistic will be
Underwriting - ANS-The process and insurance company uses to decide whether to
except or reject an application for a policy insurance. underwriters evaluate the risk and
exposure of a potential policyholders they decide how much coverage the policyholder
should receive how much they should pay for it or whether even to except the risk and
insure them. underwriting involves measuring risk exposure and determining the
premium that needs to be charged to ensure that risk.
peril - ANS-A cause of property losses I.E, fire, lightning, explosion, windstorm,
hurricane, collapse of building, vandalism, accidental discharge, theft.
hazard - ANS-Is a situation that poses a level of threat to life, Heath, property, or
environment.
Direct loss - ANS-Direct physical loss to property
Indirect loss - ANS-A loss that arises as a result of damage to property, other than the
direct loss to the property. If you own a taxi and someone totals out your taxi, you can't
make money because you can't drive your taxi for fares.
Principle of indemnity - ANS-Insurance will not pay more than the cost of the incident
Property insurance - ANS-Covers the loss of real and personal property from perils such
as fire, theft, windstorm
Insuring Agreement - ANS-Summarizes the major promises of the insurer in exchange
for premium payments by their customer.
Deductible - ANS-Amount you must pay before you begin receiving any benefits from
your insurance company
Cancellation - ANS-Termination of an insurance policy by insurance company or insurer
before the renewal date. All notices must be done in writing.
, Limit of Liability - ANS-The maximum amount for which an insurer is liable. The policy of
declarations specifies limits.
Loss settlement - ANS-The process used to determine the amount of the loss.
Methods used to settle losses - ANS-Actual cash value- value of the property, based on
the current cost to replace it, minus applicable depreciation.
Replacement cost- the cost associated with replacing property at current market prices.
Agreed value- the amount that the insured and insurer agree upon during the time of
policy inception.
Concealment - ANS-The act of purposefully not reporting information that would affect
the issuance or rate of an insurance contract.
Concurrent Causation - ANS-The insurance theory stating that if loss or damages occur
as a result of of more than one cause , one of which is covered and the other is not
covered, the insurer will still cover the claim
Conditions - ANS-The part of the insurance policy that details the rights and duties of
the insured and the insurance company in the policy
damages (n) - ANS-money paid by someone (usually) as a result of having lost a law
suit
Declarations Page - ANS-the part of the written insurance policy that states all the
policy's specifics, including name of the policyholder , type of property insured,
premiums and the term limits for the coverage
Depreciation - ANS-The act of lowering an item's value due to use of wear and tear.
Usually based on age , condition and life expectancy.
Endorsement - ANS-A specific addition to a policy that alters the coverage and
therefore the price of that policy. It can either add or remove specific types of coverage
Exclusion - ANS-Provision in an insurance policy that indicates what is denied
coverage.
Examples of exclusions - ANS-Wear and tear, rust , rot, contamination, and mechanical
break downs are all excluded from making a claim on.
Expiration date - ANS-The date on which an insurance policy expires.
Exposure - ANS-Is the measure of the possibility of a loss.
insurance terms and related concepts
Chapter 1-Exam-Graded A
Law of Large Numbers - ANS-the more examples used to develop any statistic, the
more reliable the statistic will be
Underwriting - ANS-The process and insurance company uses to decide whether to
except or reject an application for a policy insurance. underwriters evaluate the risk and
exposure of a potential policyholders they decide how much coverage the policyholder
should receive how much they should pay for it or whether even to except the risk and
insure them. underwriting involves measuring risk exposure and determining the
premium that needs to be charged to ensure that risk.
peril - ANS-A cause of property losses I.E, fire, lightning, explosion, windstorm,
hurricane, collapse of building, vandalism, accidental discharge, theft.
hazard - ANS-Is a situation that poses a level of threat to life, Heath, property, or
environment.
Direct loss - ANS-Direct physical loss to property
Indirect loss - ANS-A loss that arises as a result of damage to property, other than the
direct loss to the property. If you own a taxi and someone totals out your taxi, you can't
make money because you can't drive your taxi for fares.
Principle of indemnity - ANS-Insurance will not pay more than the cost of the incident
Property insurance - ANS-Covers the loss of real and personal property from perils such
as fire, theft, windstorm
Insuring Agreement - ANS-Summarizes the major promises of the insurer in exchange
for premium payments by their customer.
Deductible - ANS-Amount you must pay before you begin receiving any benefits from
your insurance company
Cancellation - ANS-Termination of an insurance policy by insurance company or insurer
before the renewal date. All notices must be done in writing.
, Limit of Liability - ANS-The maximum amount for which an insurer is liable. The policy of
declarations specifies limits.
Loss settlement - ANS-The process used to determine the amount of the loss.
Methods used to settle losses - ANS-Actual cash value- value of the property, based on
the current cost to replace it, minus applicable depreciation.
Replacement cost- the cost associated with replacing property at current market prices.
Agreed value- the amount that the insured and insurer agree upon during the time of
policy inception.
Concealment - ANS-The act of purposefully not reporting information that would affect
the issuance or rate of an insurance contract.
Concurrent Causation - ANS-The insurance theory stating that if loss or damages occur
as a result of of more than one cause , one of which is covered and the other is not
covered, the insurer will still cover the claim
Conditions - ANS-The part of the insurance policy that details the rights and duties of
the insured and the insurance company in the policy
damages (n) - ANS-money paid by someone (usually) as a result of having lost a law
suit
Declarations Page - ANS-the part of the written insurance policy that states all the
policy's specifics, including name of the policyholder , type of property insured,
premiums and the term limits for the coverage
Depreciation - ANS-The act of lowering an item's value due to use of wear and tear.
Usually based on age , condition and life expectancy.
Endorsement - ANS-A specific addition to a policy that alters the coverage and
therefore the price of that policy. It can either add or remove specific types of coverage
Exclusion - ANS-Provision in an insurance policy that indicates what is denied
coverage.
Examples of exclusions - ANS-Wear and tear, rust , rot, contamination, and mechanical
break downs are all excluded from making a claim on.
Expiration date - ANS-The date on which an insurance policy expires.
Exposure - ANS-Is the measure of the possibility of a loss.
