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P&C - Property and Casualty Insurance Basics. Top Quizzes with answers, rated A

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P&C - Property and Casualty Insurance Basics. Top Quizzes with answers, rated A Insurable Interest - ✔✔The insured must have an ___ ___ in the person or property covered by an insurance pol... icy. Financial, Blood and Business - ✔✔The 3 Elements of Insurable Risk are: At the time of the loss - ✔✔In property and casualty insurance, insurable interest must exist when? Underwriting - ✔✔The process of reviewing applications for insurance and the information on the application. Risk Selection - ✔✔In other words, underwriting is a ___ ___ process. Evaluating Applications - ✔✔The underwriter's function refers to the operations of an insurance company where an employee (underwriter) is responsible for ___ ___ submitted to the insurer and determining whether a policy should be issued, and if so, the conditions and rates for that policy Insurance Rate - ✔✔The amount charged for a particular amount of coverage. Premium - ✔✔Insurance rate is the actuarially concluded unit of cost that is applied against the rating basis from which a policy ___ is developed. Charge per unit of exposure - ✔✔Another way to describe insurance rate is: Property value - ✔✔Property or fire insurance rates are determined by the insured's: Revenue Receipts - ✔✔Casualty or Liability insurance rates are determined by the insured's: Payroll - ✔✔Worker's Compensation insurance rates are determined by the insured's: Class and Individual - ✔✔What are the two types of rates? Class Rating - ✔✔The practice of computing a price per unit of insurance that applies to all applicants possessing a given set of characteristics. Manual Rating - ✔✔Another term used for class rating is ___ ___. Single Rate - ✔✔The advantage of the class-rating system is that it permits the insure to apply a ___ ___ to a large number of insureds, simplifying the process of determining their premiums. Common - ✔✔Class rating is the most ___ approach in use by the insurance industry and is used in life insurance and most property and casualty fields. Rate Maker - ✔✔In establishing the classes to which class rates apple, the ___ ___ must compromise between a large class, which will include a greater number of exposures and thereby increase the credibility of predictions, and one sufficiently narrow to permit homogeneity. Individual - ✔✔In some areas of risks, the characteristics of the units to be insured vary so widely that it is deemed desirable to depart from the class approach and calculate rates on the basis that attempts to measure more precisely the loss-producing characteristics of the ___. Five - ✔✔The are ___ basic individual rate-making approaches. Judgement - ✔✔___ rating is used when credible statistics are lacking or when the exposure units are so varied that it is impossible to construct a class. A - ✔✔A risk the has been judgement rated may also be referred to as "_" Rated. Schedule - ✔✔In ___ rating, rates are developed by applying a schedule of charges and credits to some base rate to determine the appropriate rate for an individual exposure. Largest - ✔✔Due to the introduction of ISO's class-rating program, schedule rating is used less frequently, leaving on the the ___ and most complex risks to be schedule rated. Experience - ✔✔In ___ rating, the insured's own past lost experience enters into the determination of the final premium. Deviated - ✔✔Experience rating is superimposed on a class-rating system and adjusts the insured's premium either up or down, depending on the extent to which his experience has ___ from the average experience of the class. Retrospective - ✔✔A self-rating plan under which the actual losses during the policy period determine the final premium, subject to a minimum and maximum premium. Auto - ✔✔Merit rating is used most commonly used in personal ___ insurance. Merit - ✔✔In ___ rating, the insured's premium is based not on the actual loss record, but on other factor that indicate the probability that loss will occur. Loss Costs - ✔✔A rating method developed by ISO that provides and insurer with that portion of a rate that does not include provisions of expenses or profit and are based on historical aggregate loss and adjustment expenses projected through development to their ultimate value and through trending to a future point in time. Components - ✔✔Factors that determine rates including loss reserves, loss adjusting expenses, operating expenses and profits. Peril - ✔✔A specific cause of a loss. Named peril - ✔✔A term used in property insurance to describe the breadth of coverage provided under an insurance policy form that lists specific perils. Open peril - ✔✔A term used in property insurance to describe the breadth of coverage provided under an insurance policy form that insures against any risk of loss that is not specifically excluded. All risks - ✔✔Open peril is used instead of the therm "___ ___." Two (Direct and Indirect) - ✔✔There are ___ types of property losses that an individual or business can be exposed to. Direct loss - ✔✔___ ___ means direct, physical damage to buildings and/or personal property. Proximate - ✔✔Direct loss also includes other damage where the insured peril was the ___ cause of loss. Indirect Loss - ✔✔Losses considered a result of direct loss. Consequential - ✔✔Indirect losses are also known as ___. Living - ✔✔The most prevalent type of indirect loss for individual homeowners is the extra ___ expense that may be insured by the insured while the home is being repaired. Negligence - ✔✔The failure to use the care that a reasonable, prudent person would have taken under the same or similar circumstances. Tort - ✔✔A wrongful act or the violation of someone's rights that leads to legal liability. Intentional Tort - ✔✔Any deliberate act that causes harm to another person regardless of whether the offending party intended to injure the aggrieved party. Unintentional Tort - ✔✔The result of acting without proper care. Four - ✔✔There are ___ primary elements considered in establishing negligence, and all of them must be present in order to prove negligence on the part of another party. Legal Duty - ✔✔(Elements of Negligence) It must be shown that the defendant had a legal duty to act or not to act. Standard of Care - ✔✔(Elements of Negligence) The defendant must have used a ___ _ ___ that breached the legal duty. ___ _ ___ implies acting as a reasonable person would act Proximate Cause - ✔✔(Elements of Negligence) An act or event considered and natural and reasonably foreseeable cause of the damage or event that occurs and damages property or injures a plaintiff. Actual Loss or Damage - ✔✔(Elements of Negligence) The mere fact that carelessness existed is not sufficient cause for legal liability. ___ ___ __ ___ must have been suffered by the party seeking recovery. Unbroken Chain - ✔✔In the element of proximate cause, there must have been an ___ ___ of events beginning with the negligence and leading to the injury or damage. Contributory Negligence - ✔✔Under ___ ___, the injured party must be completely free of fault in order to collect. Comparative Negligence - ✔✔Under ___ ___, the fault is shared between the parties involved, and the awards for damages are reduced by the percentage of negligence of each party. Pure Comparative Negligence - ✔✔Allows the plaintiff the recover the damages, as long as he or she is not 100% negligent. Modified Comparative Negligence - ✔✔Also known as the "equal to or greater than rule," the injured party may only recover damages if his or her fault is less than that of the defendant. The Last Clear Chance Rule - ✔✔May be used as a defense by a negligent party sho can show the injured party had the last clear chance to avoid the loss, but did not. Intervening Cause - ✔✔The ___ ___ doctrine bars or reduces recovery to an injured person if an intervening cause interrupted the chain of events and sets in motion a new chain of events. Time Limit - ✔✔By law, some states have set a ___ ___ in which an injured party may bring legal action against another party for certain types of injuries. Bodily Injury and Property Damage - ✔✔A tort may result in two forms of injury to another: ___ ___ and __ __. Property Damage - ✔✔In the case of ___ ___, the extent of the loss is usually easy to determine. Monetary - ✔✔Property damage is measured by the actual ___ loss the injured party suffered, which is measured by the value of the property damaged or destroyed and the loss of the use of that asset. Bodily Damage - ✔✔In the case of ___ ___, it is more difficult to determine the loss monetarily. Special and General - ✔✔The two classes of compensatory damages that may be awarded are ___ and ___ damages. Special Damages - ✔✔Specific out-of-pocket expenses for medical, miscellaneous expenses, and loss of wages. General Damages - ✔✔Compensate the injured person for pain and suffering, mental anguish, disfigurement, and other similar types of losses. Right - ✔✔Determination of the amount of general damages is highly subjective and can amount to whatever a judge or jury feels is "___." Punitive - ✔✔A third form of damages is ___, which is a form of extreme outrageous behavior, gross negligence or willful intent. Absolute Liability - ✔✔___ ___ is imposed on defendants engaged in hazardous activités, such as harboring wild animals, using explosives, et [Show More]

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