Chapter 1|insurance terms and related concepts|Texas All lines adjuster license

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Law of Large Numbers Correct Answer: the more examples used to develop any statistic, the more reliable the statistic will be Underwriting Correct Answer: The process and insurance company uses to d... ecide whether to except or reject an application for a policy insurance. underwriters evaluate the risk and exposure of a potential policyholders they decide how much coverage the policyholder should receive how much they should pay for it or whether even to except the risk and insure them. underwriting involves measuring risk exposure and determining the premium that needs to be charged to ensure that risk. peril Correct Answer: A cause of property losses I.E, fire, lightning, explosion, windstorm, hurricane, collapse of building, vandalism, accidental discharge, theft. hazard Correct Answer: Is a situation that poses a level of threat to life, Heath, property, or environment. Direct loss Correct Answer: Direct physical loss to property Indirect loss Correct Answer: A loss that arises as a result of damage to property, other than the direct loss to the property. If you own a taxi and someone totals out your taxi, you can't make money because you can't drive your taxi for fares. Principle of indemnity Correct Answer: Insurance will not pay more than the cost of the incident Property insurance Correct Answer: Covers the loss of real and personal property from perils such as fire, theft, windstorm Insuring Agreement Correct Answer: Summarizes the major promises of the insurer in exchange for premium payments by their customer. Deductible Correct Answer: Amount you must pay before you begin receiving any benefits from your insurance company Cancellation Correct Answer: Termination of an insurance policy by insurance company or insurer before the renewal date. All notices must be done in writing. Limit of Liability Correct Answer: The maximum amount for which an insurer is liable. The policy of declarations specifies limits. Loss settlement Correct Answer: The process used to determine the amount of the loss. [Show More]

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