USAA Licensing Exam Questions and Correct
Answers | Latest Update| Graded A+
Insurance
Transfer of risk from one person or organization to an insurance company
Indemnity
The principle to restore the insured to the pre-loss economic or financial condition.
Law of Large numbers
Mathematical principle used by insurers to predict losses to charge the
appropriate premiums
Insurable Interest
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
Temporary insurance contract; commits the company to act as if a policy has been
issued
Peril
Cause of loss
,Direct Loss
Immediate actual physical damage to tangible property
Indirect loss
Inability to use property as a result of a direct loss
Risk
Chance of loss; uncertainty of loss
What are the two types of risk?
Speculative and Pure
Speculative Risk
Involves the simultaneous chance of gain or loss: is not insurable
Pure Risk
a risk that presents the chance of loss but no opportunity for gain (insurable)
What are two examples of speculative risk?
Gambling
Investing
,What is an example of your risk?
Car accident
Physical hazards include
Visible condition that increases the chance of loss
Morale Hazard
Attitude of carelessness or indifference to loss
Insurer
The insurance company (a.k.a. second party to the contract)
Named Insured
A party named on the declarations who is purchasing the insurance policy (a.k.a.
first party to the contract)
Insured
Who the insurer promises to protect in addition to the named insured
Limit of Liability
The maximum amount that can be paid for a covered loss
, Consideration
An exchange of value between parties to a contract
Waiver
The voluntary relinquishment of a known right
What is Estoppel?
When an agent tells an insured/makes the statement there is coverage for a loss
when there is no such coverage, then the insurer is prevented from denying the
claim as a result of what precedent?
Concealment
Insured or prospect deliberately withholding material information from the insurer,
this voids coverage
Material Misrepresentation
Insured or prospect giving incorrect material information to the insurer, this voids
coverage
Warranty
A written condition in the policy that must be true at the time of the loss
Answers | Latest Update| Graded A+
Insurance
Transfer of risk from one person or organization to an insurance company
Indemnity
The principle to restore the insured to the pre-loss economic or financial condition.
Law of Large numbers
Mathematical principle used by insurers to predict losses to charge the
appropriate premiums
Insurable Interest
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
Temporary insurance contract; commits the company to act as if a policy has been
issued
Peril
Cause of loss
,Direct Loss
Immediate actual physical damage to tangible property
Indirect loss
Inability to use property as a result of a direct loss
Risk
Chance of loss; uncertainty of loss
What are the two types of risk?
Speculative and Pure
Speculative Risk
Involves the simultaneous chance of gain or loss: is not insurable
Pure Risk
a risk that presents the chance of loss but no opportunity for gain (insurable)
What are two examples of speculative risk?
Gambling
Investing
,What is an example of your risk?
Car accident
Physical hazards include
Visible condition that increases the chance of loss
Morale Hazard
Attitude of carelessness or indifference to loss
Insurer
The insurance company (a.k.a. second party to the contract)
Named Insured
A party named on the declarations who is purchasing the insurance policy (a.k.a.
first party to the contract)
Insured
Who the insurer promises to protect in addition to the named insured
Limit of Liability
The maximum amount that can be paid for a covered loss
, Consideration
An exchange of value between parties to a contract
Waiver
The voluntary relinquishment of a known right
What is Estoppel?
When an agent tells an insured/makes the statement there is coverage for a loss
when there is no such coverage, then the insurer is prevented from denying the
claim as a result of what precedent?
Concealment
Insured or prospect deliberately withholding material information from the insurer,
this voids coverage
Material Misrepresentation
Insured or prospect giving incorrect material information to the insurer, this voids
coverage
Warranty
A written condition in the policy that must be true at the time of the loss
