SC P&C Insurance Exam Study Guide. Questions with accurate answers. Latest updates. Rated A.

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SC P&C Insurance Exam Study Guide. Questions with accurate answers. Latest updates. Rated A. Abandonment - ✔✔the abdication of insured property into the hands of another, or into the posses... sion of no one in particular Absolute Liability - ✔✔Liability that arises from an extremely dangerous situation. Often found in cases involving explosives. Also known as "strict" liability. For example, you are absolutely liable if you keep a wild animal as a pet. Accident - ✔✔an unplanned, unforseen event which occurs suddenly and at a specific place Actual Cash Value - ✔✔the required amount to pay damages for property loss, which is calculated based on the property's current replacement value minus depreciation Additional Coverage - ✔✔a provision in an insurance policy that allows for more coverage for a specific loss expense without an increase in premium Additional Insureds - ✔✔individuals or business that are not named as insured on the decleration page, butr are protected by the policy, usually in regard to a specific interest Adhesion - ✔✔A contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured. Admitted Insurer - ✔✔An insurer to which a state insurance department has granted a license to do business within that state. Adverse Selection - ✔✔In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance. Agent - ✔✔an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer Aggregate Limit - ✔✔the maximum amount an insurer will pay for all covered losses during the covered policy period Agreed Value - ✔✔A property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written. Aleatory - ✔✔A contract in which participating parties exchange unequal amounts. the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss. Alien Insurer - ✔✔an insurance company that is incorporated outside the U.S. Apparent Authority - ✔✔The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created. Appraisal - ✔✔an assesment of property to determine either the correct amount of insurance to be written or the amount of loss to be paid Arbitration - ✔✔A process, agreed to by parties to a dispute in lieu of going to court, by which a neutral person or body makes a binding decision Assignment - ✔✔the transfer of legal right or interest in an insurance policy, in P&C ususally only valid with prior written consent of the insurer Authorized Insurer - ✔✔An insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to transact insurance in the state. Auto - ✔✔a land motor vehicle, trailer or semi-trailer designed for use on public roads Avoidance - ✔✔A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane). Bailee - ✔✔One who holds the personal property of another for a specific purpose. Beneficiary - ✔✔the one who recieves the proceeds from an insurance policy Binder - ✔✔A temporary insurance contract that forms an oral or wirtten agreement between the insurance company and the customer. Blanket Bond - ✔✔a type of bond that covers losses caused by dishonest employees Blanket Insurance - ✔✔A single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple locations. Bodily Injury Liability - ✔✔Insurance that protects a driver from claims resulting from injuries or deaths for which the insured is at fault Boycott - ✔✔An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions. Builder's Risk Coverage Form - ✔✔This coverage form provides coverage for buildings that are under construction. Can also be used to cover a building while additions and alterations are being made to the structure. Building and Personal Property Coverage Form - ✔✔A commercial property form that covers buildings, and/or their contents. Burglary - ✔✔entering a building unlawfully with intent to commit a felony or to steal valuable property Cancellation - ✔✔the termination of an in-force insurance policy by either the insurer or the insured prior to the expiration date shown on the policy Casualty Insurance - ✔✔A type of insurance that is primarily concerned with the legal liability for losses caused by injury to persons or damage to the property of others. Cease and Desist Order - ✔✔A demand of a person to stop committing an action that is in violation of a provision. Certificate of Authority - ✔✔A document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate. Certificate of Insurance - ✔✔A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided. Claim - ✔✔a demand made by an insured to cover a loss protected by the insurance policy Class Rating - ✔✔The practice of computing a price per unit of insurance that applies to all applicants possessing a given set of characteristics. Coercion - ✔✔An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance. Coinsurance - ✔✔A cost-sharing provision requires the insured to assume a portion of the cost of covered services. Combined Single - ✔✔This coverage type is a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence. Commercial Lines - ✔✔insurance coverages for businesses, commercial institutions, and professional organizations. Commissioner - ✔✔The chief executive and administrative officer of a state insurance department. Common Law - ✔✔Decisions and opinions of courts that are based on local customs and habits of an area within a particular country or state Complaint - ✔✔a written statement of a liability claim given by the claimant; a reason for a law suit Components - ✔✔factors that determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits Comprehensive Coverage - ✔✔The portion of an insurance policy that protects an individual against automobile damages or losses other than collisions. It includes damages and losses due to fire, vandalism, or theft. Concealment - ✔✔the withholding of known facts, which if material, can void a contract Conditional Contract - ✔✔A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable. Conditions - ✔✔the section of the policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy Consideration - ✔✔Anything of value given to induce entering into a contract; it may be money, personal services, payment of premiums, for return of coverage Consultant - ✔✔An individual who provides professional advice or services for a fee, regarding the benefits, advantages or disadvantages promised under a policy of insurance Consumer Reports - ✔✔Written and /or oral statements regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources. Contract - ✔✔A binding agreement between two or more persons that is enforceable by law Controlled Business - ✔✔An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees. Concurrent Causation - ✔✔multiple events leading to one loss Death Benefit - ✔✔The amount payable upon the death of the person whose life is insured. Declarations - ✔✔The who, what, where, when, how of the policy. Also includes premiums Deductible - ✔✔A set amount that the holder of an insurance policy must pay for each loss before the insurance company pays out. Defamation - ✔✔An unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation. Deposit Premium Audit - ✔✔A condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure. Depreciation - ✔✔Any decrease or loss in value caused by age, wear, or market conditions Direct Losses - ✔✔Physical damage to buildings and/or personal property as a result of direct consequence of a particular peril. Director - ✔✔the head of the state department of insurance Disability - ✔✔A mental or physical impairment that substantially limits one or more major life activities. Disclosure - ✔✔An act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation. Domestic Insurer - ✔✔An insurance company that conducts business in the state of incorporation. Domicile of Insurer - ✔✔Insurer's location of incorporation and the legal ability to write business in a state. Economic Loss - ✔✔the estimated total cost of and accident, both insured and unisured Endorsement - ✔✔A document, agreed to by both parites, that is attached to the policy and modifies or chages the original policy in some way. Estoppel - ✔✔a legal impediment to denying a fact or restoring a right that has been previously waived Excess Policy - ✔✔a policy that only pays for loss after the primary policy has paid its limit Exclusions - ✔✔Causes of loss, exposures, conditions, etc. listed in the policy for which the benefits will not be paid. Exclusive or Captive Agent - ✔✔an agent who only represents one company and is compensated by commisions [Show More]

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