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Exam Prep with Accurate Solutions |
Grade A+
Insurance -✓✓financial tool that protects individuals and organizations from
unforeseen and extraordinary financial losses by transferring risk from one party to
another
Insured -✓✓A person covered by an insurance policy; pays premiums in exchange
for protection
Insurer -✓✓provides financial protection to insured
reserve -✓✓collective premiums go in a pool or a
claimant -✓✓after filing an claim the insured becomes the
Principle of Indemnity -✓✓Restoration to approximate previous financial
condition; no more, no less.
agreement (acceptance and offer)
consideration
competent parties
legal purpose -✓✓a insurance policy is binding because it meets what 4
requirements of a legal contract
,Upmost good faith -✓✓insurance contracts assume; applicants must be honest
about the risk to the insurer
unilateral -✓✓insurance contracts are considered
dec page
insuring agreement
conditions
exclusions -✓✓an insurance contract has four essential parts think DICE
Dec page -✓✓always the first part in a contract that establishes:
name (insured and insurer)
policy #
location and description of insured item
value of insured item
dates of policy (beginning and end)
amount/limit of coverage
deductible
premium
definitions page -✓✓defines terms used in policy and includes important language
adjuster needs to know
insuring agreement -✓✓summarizes:
, what is covered
which causes of loss are covered
any exclusions
maximum limit of coverage in dollars
conditions -✓✓insurer specifies any limits or qualifications the policy holder must
meet
exclusions -✓✓lists what the policy does NOT cover
commonly: earthquakes, floods, war, nuclear hazards, intentional acts
endorsements
rider
addendum
attachment -✓✓addictions to an insurance policy (can add or reduce coverage,
change policy provisions, premium price changes after policy ends)
re-insurer -✓✓when and insurer buys insurance to reduce its exposure to loss
domestic insurer -✓✓located in a particular state, abides by state's laws
foreign insurer -✓✓obeys' a states or us laws but can be located elsewhere
alien insurer -✓✓obeys laws of another country altogether