FUNDAMENTALS OF INSURANCE STUDY GUIDE
RISK Correct Answer: IS THE CHANCE OF FINANCIAL LOSS
PERIL Correct Answer: IS THE CAISE OF FINANCIAL LOSS FOR EXAMPLE- FIRE
WATER AND EARTHQUAKE
WHAT IS THE MAIN PURPOSE OF INSURANCE Correct Answer: IS TO ALLOW THE
SPREAD OF RISK
INDEMNITY Correct Answer: MEANS RESTORING THE INSUREDS TO THE SAM
FINANCIAL POSITION AS THEY WERE IN IMMEDIATELY PRIOR TO THE LOSS.
WHOSE OPTION IS TO OF HOW THEY WANT TO SETTLE A CLAIM? Correct Answer:
THE INSURER
INSURANCE INDEMNIFIES Correct Answer: FUTURE AND ACCIDENTAL LOSSES
ONLY, NOT THE PLANNED LOSSES
DIRECT WRITERS Correct Answer: IN THIS METHOD PRODUCERS ARE EMPLOYEES
OF THE INSURER. THEY ARE PAID REMUNERIATION BY THE WAY OF SALARY.
INSURER OWNS CUSTOMER FILES
INDEPENDANT BROKERAGES Correct Answer: THEY ARE SELF EMPLOYED, THEY
ARE NOT EMPLOYEES OF THE INSURANCE COMPANY THEY REPRESENT. THEY
ARE PAID COMMISSION. THE CUSTOMER FILES ARE OWNED BY THE BROKERAGE
PURE RISK Correct Answer: THERE IS ONY A CHANDE OF FINANCIAL LOSS WITH
NO CHANCE OF PROFITING FROM IT FOR EXAMPLE, FIRE LOSS
SPECULATIVE RISK Correct Answer: THERE IS A CHANCE OF FINANCIAL LOSS AS
WEL AS A CHANCE OF FINANCIAL GAIN
WHAT ARE THE 4 WAYS OF LIVING WITH RISK Correct Answer: AVOIDANCE OF
RISK- ACTING LIKE ITS NOT THERE
CONTROLLING OF RISK- GETTING THINGS INSTALLED TO LESSON THE RISK
RETENTION OF RISK- SAVING MONEY TO DEAL WITH RISKS AS THEY COME
TRANSFER OF RISK- PURCHASING INSURANCE
CONTRACT Correct Answer: IS A LEGAL PROMISE MADE BY TWO OR MORE
PARTIES WHICH CAN BE ENFORCED THROUGH THE COURT OF LAW
WHAT ARE THE FIVE ELEMENT OF A CONTRACT Correct Answer: AGREEMENT
CONSIDERATION
LEGALITY OF OBJECT
LEGAL CAPACITY OF PARTIES
,GENUINE INTENTION
THE AGREEMENT OF AN INSURANCE CONTRACT Correct Answer: WHEN BOTH
PARTIES AGREE ON PARTICULAR POINT
CONSIDERATION OF AN INSURANCE CONTRACT Correct Answer: AN EXCHANGE
OF SOMETHING OF VALUE BETWEEN THE PARTIES TO A CONTRACT
LEGALITY OF OBJECT Correct Answer: FOR WHICH A CONTRACT IS WRITTEN
SHOULD BE LEGAL OBJECT
LEGAL CAPACITY OF PARTIES Correct Answer: ALL PARTIES TO CONTRACT
SHOULD HAVE LEGAL CAPACITY TO ENTER INTO A CONTRACT
GENUINE INTENTION Correct Answer: NO INFLUENCE OR VIOLENCE IS USED ON
EITHER PARTY TO ENTER INTO A CONTRACT
BINDER Correct Answer: THE BROKER HAS COMMITTED AN INSURER TO A
CONTRACT OF INSURANCE ON ANY RISK
ENDORSEMENT Correct Answer: IT MEANS TO CHANGE THE TERMS AND
CONDITIONS OF AN EXISTING INSURANCE POLICY
RIDER Correct Answer: THE COVERAGE OF AN ADDITIONAL PERIL OVER AND
ABOVE THE EXISTING PERILS COVERED IN THE POLICY
WHAT DOES THE FEDERAL GOVERNMENT DO Correct Answer: IT MONITORS THE
FINANCIAL HEALTH OF FEDERALLY LICENSED INSURERS
WHAT DOES INSOLVENT MEAN Correct Answer: THOSE WHO ARE NOT ABLE TO
PAY ALL INSURED LOSSES
WHAT DOES SOLVENT MEAN Correct Answer: THOSE WHO ARE ABLE TO PAY ALL
INSURED LOSSES
WHAT HAPPENS WHNE AN INSURED BECOMES INSOLVENT Correct Answer: THE
PROPERTY AND CAUSALITY INSURANCE COMPENSATION CORPORATION TAKES
OVER THE BUSINESS AND PAYS THE LOSSES
WHAT DOES THE PROVINCIAL GOVERNMENT DO Correct Answer: THRY APPROVE
THE CONTENT OF INSURANCE CONTRACTS
IT LICENSES THE INSURERS OPERATING WITHIN THE PROVINCE INCLUDING
FEDERALLY LICENSED INSURER
IT ALSO MONITORS THE FINANCIAL HEALTH OF THE INSURERS WHICH OPERATE
IN THE PROVINCE ONLY
, WHAT IS A FIDUCIARY Correct Answer: SOMEONE THATNHANDELS SOMEONE
ELSES MONEY
WHO ARE FIDUCIARIES Correct Answer: INSURERS AND BROKERS
WHY SHOULD BROKER NOT USED UNEARNED COMMISSIONS Correct Answer: SO
THAT IT IS AVAILABLE IN THE TRUST ACCOUNT TO BE REFUNDED TO THE
CLIENT IN CASE THE POLICY IS CANCELLED
WHO HAS THE AUTHRITY TO MAKE ALTERATIONS TO THE POLICY Correct Answer:
A PERSON WHO IS AUTHORIZED BY THE INSURER, BROKERS ARE GENERALLY
NOT AUTHORIZED
WHAT IS THE REMOVAL CLAUSE Correct Answer: WHEN A PROPERTY IS REMOVED
TO AN UNNAMED LOCATION TO PROTECT IF FROM DAMAGE OR FROM FURTHER
DAMAGE IS COVERED UP TO 7 DAYS OR FOR THE REMAINDER OF THE POLICY,
WHICH EVER ONE IS SHORTER
WHEN DOES AN INSURANCE POLICY TAKE EFFECT Correct Answer: AN INSURANCE
POLICY STARTS AT 1201AM STANDARD TIME AT THE ADDRESS OF THE NAMED
INUSRED AS STATED HEREIN.
WHAT IS SUBROGATION Correct Answer: WHEN THE INUSRERS CAN SUE THE
PARTY RESPONSIBLE FOR THE LOSS OF THEIR CLIENT TO RECOVER MONEY
AFTER PAYING THE CLAIM.
WHAT IS SUBROGATION LIKE? Correct Answer: ITS LIKE PUTTING SOMEONE IN
ANOTHER PERSONS SHOES
EFFECT OF A DELIVERY OF AN INSURANCE POLICY Correct Answer: THE INSURED
IS ELIGIBLE FOR A CLAIM IF THE DOCUMENTS HAVE BEEN DELIVERED TO HIM
OR HER EVEN IF NO PAYMENT HAS BEEN MADE.
WHAT ARE THE TWO TYOES OF FIRE Correct Answer: FRIENDLY FIRE AND HOSTILE
FIRE
WHAT IS FRIENDLY FIRE Correct Answer: WHEN A FIRE STAYS WHERE IT
BELONGS, IT IS CALLED FRIENDLY FIRE
WHAT IS HOSTILE FIRE Correct Answer: WHEN A FIRE ESCAPES THE PLACE WHERE
IT BELONGS AND STARTS BURNING OUTSIDE, ITS CALLED A HOSTILE FIRE
WHAT ARE THE THREE THINGS A FIRE POLICY MUST COVER Correct Answer: FIRE
ITSELF, LIGHTNING, EXPLOSION OF NATURAL COAL OR MANUFACTURED GASES.
RISK Correct Answer: IS THE CHANCE OF FINANCIAL LOSS
PERIL Correct Answer: IS THE CAISE OF FINANCIAL LOSS FOR EXAMPLE- FIRE
WATER AND EARTHQUAKE
WHAT IS THE MAIN PURPOSE OF INSURANCE Correct Answer: IS TO ALLOW THE
SPREAD OF RISK
INDEMNITY Correct Answer: MEANS RESTORING THE INSUREDS TO THE SAM
FINANCIAL POSITION AS THEY WERE IN IMMEDIATELY PRIOR TO THE LOSS.
WHOSE OPTION IS TO OF HOW THEY WANT TO SETTLE A CLAIM? Correct Answer:
THE INSURER
INSURANCE INDEMNIFIES Correct Answer: FUTURE AND ACCIDENTAL LOSSES
ONLY, NOT THE PLANNED LOSSES
DIRECT WRITERS Correct Answer: IN THIS METHOD PRODUCERS ARE EMPLOYEES
OF THE INSURER. THEY ARE PAID REMUNERIATION BY THE WAY OF SALARY.
INSURER OWNS CUSTOMER FILES
INDEPENDANT BROKERAGES Correct Answer: THEY ARE SELF EMPLOYED, THEY
ARE NOT EMPLOYEES OF THE INSURANCE COMPANY THEY REPRESENT. THEY
ARE PAID COMMISSION. THE CUSTOMER FILES ARE OWNED BY THE BROKERAGE
PURE RISK Correct Answer: THERE IS ONY A CHANDE OF FINANCIAL LOSS WITH
NO CHANCE OF PROFITING FROM IT FOR EXAMPLE, FIRE LOSS
SPECULATIVE RISK Correct Answer: THERE IS A CHANCE OF FINANCIAL LOSS AS
WEL AS A CHANCE OF FINANCIAL GAIN
WHAT ARE THE 4 WAYS OF LIVING WITH RISK Correct Answer: AVOIDANCE OF
RISK- ACTING LIKE ITS NOT THERE
CONTROLLING OF RISK- GETTING THINGS INSTALLED TO LESSON THE RISK
RETENTION OF RISK- SAVING MONEY TO DEAL WITH RISKS AS THEY COME
TRANSFER OF RISK- PURCHASING INSURANCE
CONTRACT Correct Answer: IS A LEGAL PROMISE MADE BY TWO OR MORE
PARTIES WHICH CAN BE ENFORCED THROUGH THE COURT OF LAW
WHAT ARE THE FIVE ELEMENT OF A CONTRACT Correct Answer: AGREEMENT
CONSIDERATION
LEGALITY OF OBJECT
LEGAL CAPACITY OF PARTIES
,GENUINE INTENTION
THE AGREEMENT OF AN INSURANCE CONTRACT Correct Answer: WHEN BOTH
PARTIES AGREE ON PARTICULAR POINT
CONSIDERATION OF AN INSURANCE CONTRACT Correct Answer: AN EXCHANGE
OF SOMETHING OF VALUE BETWEEN THE PARTIES TO A CONTRACT
LEGALITY OF OBJECT Correct Answer: FOR WHICH A CONTRACT IS WRITTEN
SHOULD BE LEGAL OBJECT
LEGAL CAPACITY OF PARTIES Correct Answer: ALL PARTIES TO CONTRACT
SHOULD HAVE LEGAL CAPACITY TO ENTER INTO A CONTRACT
GENUINE INTENTION Correct Answer: NO INFLUENCE OR VIOLENCE IS USED ON
EITHER PARTY TO ENTER INTO A CONTRACT
BINDER Correct Answer: THE BROKER HAS COMMITTED AN INSURER TO A
CONTRACT OF INSURANCE ON ANY RISK
ENDORSEMENT Correct Answer: IT MEANS TO CHANGE THE TERMS AND
CONDITIONS OF AN EXISTING INSURANCE POLICY
RIDER Correct Answer: THE COVERAGE OF AN ADDITIONAL PERIL OVER AND
ABOVE THE EXISTING PERILS COVERED IN THE POLICY
WHAT DOES THE FEDERAL GOVERNMENT DO Correct Answer: IT MONITORS THE
FINANCIAL HEALTH OF FEDERALLY LICENSED INSURERS
WHAT DOES INSOLVENT MEAN Correct Answer: THOSE WHO ARE NOT ABLE TO
PAY ALL INSURED LOSSES
WHAT DOES SOLVENT MEAN Correct Answer: THOSE WHO ARE ABLE TO PAY ALL
INSURED LOSSES
WHAT HAPPENS WHNE AN INSURED BECOMES INSOLVENT Correct Answer: THE
PROPERTY AND CAUSALITY INSURANCE COMPENSATION CORPORATION TAKES
OVER THE BUSINESS AND PAYS THE LOSSES
WHAT DOES THE PROVINCIAL GOVERNMENT DO Correct Answer: THRY APPROVE
THE CONTENT OF INSURANCE CONTRACTS
IT LICENSES THE INSURERS OPERATING WITHIN THE PROVINCE INCLUDING
FEDERALLY LICENSED INSURER
IT ALSO MONITORS THE FINANCIAL HEALTH OF THE INSURERS WHICH OPERATE
IN THE PROVINCE ONLY
, WHAT IS A FIDUCIARY Correct Answer: SOMEONE THATNHANDELS SOMEONE
ELSES MONEY
WHO ARE FIDUCIARIES Correct Answer: INSURERS AND BROKERS
WHY SHOULD BROKER NOT USED UNEARNED COMMISSIONS Correct Answer: SO
THAT IT IS AVAILABLE IN THE TRUST ACCOUNT TO BE REFUNDED TO THE
CLIENT IN CASE THE POLICY IS CANCELLED
WHO HAS THE AUTHRITY TO MAKE ALTERATIONS TO THE POLICY Correct Answer:
A PERSON WHO IS AUTHORIZED BY THE INSURER, BROKERS ARE GENERALLY
NOT AUTHORIZED
WHAT IS THE REMOVAL CLAUSE Correct Answer: WHEN A PROPERTY IS REMOVED
TO AN UNNAMED LOCATION TO PROTECT IF FROM DAMAGE OR FROM FURTHER
DAMAGE IS COVERED UP TO 7 DAYS OR FOR THE REMAINDER OF THE POLICY,
WHICH EVER ONE IS SHORTER
WHEN DOES AN INSURANCE POLICY TAKE EFFECT Correct Answer: AN INSURANCE
POLICY STARTS AT 1201AM STANDARD TIME AT THE ADDRESS OF THE NAMED
INUSRED AS STATED HEREIN.
WHAT IS SUBROGATION Correct Answer: WHEN THE INUSRERS CAN SUE THE
PARTY RESPONSIBLE FOR THE LOSS OF THEIR CLIENT TO RECOVER MONEY
AFTER PAYING THE CLAIM.
WHAT IS SUBROGATION LIKE? Correct Answer: ITS LIKE PUTTING SOMEONE IN
ANOTHER PERSONS SHOES
EFFECT OF A DELIVERY OF AN INSURANCE POLICY Correct Answer: THE INSURED
IS ELIGIBLE FOR A CLAIM IF THE DOCUMENTS HAVE BEEN DELIVERED TO HIM
OR HER EVEN IF NO PAYMENT HAS BEEN MADE.
WHAT ARE THE TWO TYOES OF FIRE Correct Answer: FRIENDLY FIRE AND HOSTILE
FIRE
WHAT IS FRIENDLY FIRE Correct Answer: WHEN A FIRE STAYS WHERE IT
BELONGS, IT IS CALLED FRIENDLY FIRE
WHAT IS HOSTILE FIRE Correct Answer: WHEN A FIRE ESCAPES THE PLACE WHERE
IT BELONGS AND STARTS BURNING OUTSIDE, ITS CALLED A HOSTILE FIRE
WHAT ARE THE THREE THINGS A FIRE POLICY MUST COVER Correct Answer: FIRE
ITSELF, LIGHTNING, EXPLOSION OF NATURAL COAL OR MANUFACTURED GASES.
