Nebraska: Property and Casualty
Nebraska General Insurance
Questions and Answers.
Agent/Producer - Answer A legal representative of an insurance company: the classification
of producer usually includes agents and brokers
Applicant or proposed insured - Answer a person applying for insurance
Broker - Answer an insurance producer not appointed by an insurer and is deemed to
represent the client
Insurance Policy - Answer a contract between a policyowner (insured) and an insurance
company which agrees to pay the insured or the beneficiary for loss caused by specific events
Insured - Answer the person covered by the insurance policy (may or may not be the policy
owner)
Insurer (principal) - Answer the company who issues an insurance policy
Policyowner - Answer the person entitled to exercies the rights and privileges in the policy
Premium - Answer the money paid to the insurance company for the insurance policy
Reciprocity/reciprocal - Answer a mutual interchange of rights and privileges
Insurance - Answer a transfer of risk
Risk - Answer the uncertainty of chance of a loss occurring. Two types exist
Two types of risk - Answer Pure and Speculative
Pure Risk - Answer situations that can only result in a loss or no change. The only type of risk
that insurance companies are willing to accept
Speculative risk - Answer the opportunity for either loss or gain. Ie gambling
, Hazards - Answer conditions or situations that increase the probability of an insured loss
occuing
Types of Hazards - Answer Physical, Moral, Morale
Physical Hazards - Answer individual characteristics that increase the chances of the cause of
loss
Moral Hazards - Answer tendencies towards increased risk. (watch out for things like lying on
the application)
Morale Hazards - Answer a state of mind that causes indifference to loss, such as
carelessness
Perils - Answer the CAUSE of loss insured against in an insurance policy
Loss - Answer the reduction, decrease, or disappearance of value of the person or property
insured in a policy, caused by a named peril
Exposure - Answer a unit of measurement used to determine rates charged for insurance
coverage
Homogeneous - Answer a large number of units having the same or similar exposure to loss
Methods of handling Risk (STARR) - Answer Sharring, Transfer, Avoidance, Reduction,
Retention
Risk Avoidance - Answer Eliminating exposure to a loss
Risk Retention - Answer planned assumption of risk by an insured through the use of
Deductibles, Co-payments, or Self insurance
Self-Insurance - Answer when the insured accepts the responsibility for the loss before the
insurance company pays.
Purpose of Risk Retention - Answer 1. Reduce Expenses and Improve Cash Flow
2. Increase Control of Claim Reserving and Claims Settlements
Nebraska General Insurance
Questions and Answers.
Agent/Producer - Answer A legal representative of an insurance company: the classification
of producer usually includes agents and brokers
Applicant or proposed insured - Answer a person applying for insurance
Broker - Answer an insurance producer not appointed by an insurer and is deemed to
represent the client
Insurance Policy - Answer a contract between a policyowner (insured) and an insurance
company which agrees to pay the insured or the beneficiary for loss caused by specific events
Insured - Answer the person covered by the insurance policy (may or may not be the policy
owner)
Insurer (principal) - Answer the company who issues an insurance policy
Policyowner - Answer the person entitled to exercies the rights and privileges in the policy
Premium - Answer the money paid to the insurance company for the insurance policy
Reciprocity/reciprocal - Answer a mutual interchange of rights and privileges
Insurance - Answer a transfer of risk
Risk - Answer the uncertainty of chance of a loss occurring. Two types exist
Two types of risk - Answer Pure and Speculative
Pure Risk - Answer situations that can only result in a loss or no change. The only type of risk
that insurance companies are willing to accept
Speculative risk - Answer the opportunity for either loss or gain. Ie gambling
, Hazards - Answer conditions or situations that increase the probability of an insured loss
occuing
Types of Hazards - Answer Physical, Moral, Morale
Physical Hazards - Answer individual characteristics that increase the chances of the cause of
loss
Moral Hazards - Answer tendencies towards increased risk. (watch out for things like lying on
the application)
Morale Hazards - Answer a state of mind that causes indifference to loss, such as
carelessness
Perils - Answer the CAUSE of loss insured against in an insurance policy
Loss - Answer the reduction, decrease, or disappearance of value of the person or property
insured in a policy, caused by a named peril
Exposure - Answer a unit of measurement used to determine rates charged for insurance
coverage
Homogeneous - Answer a large number of units having the same or similar exposure to loss
Methods of handling Risk (STARR) - Answer Sharring, Transfer, Avoidance, Reduction,
Retention
Risk Avoidance - Answer Eliminating exposure to a loss
Risk Retention - Answer planned assumption of risk by an insured through the use of
Deductibles, Co-payments, or Self insurance
Self-Insurance - Answer when the insured accepts the responsibility for the loss before the
insurance company pays.
Purpose of Risk Retention - Answer 1. Reduce Expenses and Improve Cash Flow
2. Increase Control of Claim Reserving and Claims Settlements
