PERSONAL LINES INSURANCE GLOSSARY DEFINITIONS

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PERSONAL LINES INSURANCE GLOSSARY DEFINITIONS

EXAM QUESTIONS

Qs and Ans - Expert- Explanation - ing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Broker

Answer:

Individual who represents the prospect, instead of the insurance company, in the insurance transaction.

Question 2: Best's

Answer:

Organization that rates the financial stability of insurance companies doing business in the US.

Question 3: A.M. Best Company

Answer:

Organization that rates the financial stability of insurance companies doing business in the United States.Question 4: Additional Coverages (Coverage Extensions, Other Coverages, Extended Coverages)

Answer:

Supplemental insurance that coverages that apply only in certain circumstances, have reduced or separate limits of liability, or require the insured to meet certain requirements before they are applicable.

Question 5: Certificate of Insurance

Answer:

Written form that verifies a policy has been written; provides a summary of the coverage provided under the policy.

Question 6: Blanket Insurance

Answer:

Type of insurance policy that covers more than one item of a property at a single location or one or more items of property at multiple locations.

Question 7: Duties Following Loss

Answer:

Condition found in property-casualty policies that explains the insured's responsibilities after a loss occurs.

Question 8: Comprehensive Coverage (Other Than Collision)

Answer:

In auto insurance, a broad physical damage coverage that covers all property losses except collision and those perils or property that are specifically excluded

Question 9: Coinsurance

Answer:

Policy condition that requires an insured to pay part of a loss if the amount of insurance carried on property is less than a specified percentage of the value of the property at the time of loss.

Question 10: Disability Insurance

Answer:

Line of insurance that protects the insured against loss of income resulting from injury or sickness.

Question 11: Application

Answer:

Questionnaire filled out by an agent and the prospect who is seeking insurance; the form contains information used to underwire and rate the policy.

Question 12: Fair Access to Insurance Requirements (FAIR) Plan

Answer:

Program established by law that makes property insurance available to insured who might otherwise be uninsurable in the standard market

Question 13: Binder

Answer:

Oral or written statement that provides immediate insurance protection for a specified period; designed to provide temporary coverage until a policy is issued or denied.

Question 14: Fair Credit Reporting Act (FCRA)

Answer:

Federal law that allows consumers who are denied insurance because of information contained in a credit report to be notified and allowed to obtain the information used in the report from the reporting agency.

Question 15: File and Use

Answer:

Method of rate and form ratification used by some state insurance departments that allows a company to begin using forms or rates as soon as they are filed by the department; the department eventually reviews the filing and officially accepts or rejects it.

Question 16: Damages

Answer:

Monetary compensation awarded by a court to an injured party

Question 17: Competent Parties

Answer:

One of the requirements of a legal contract; states that for a contract to be valid, it must be made between parties who are considered competent under the law.

Question 18: Comparative Negligence

Answer:

Law that allows an injured party to collect from another party for a loss, even when the injured party contributed to her own loss. Damages are reduced to the extent of the injured party's negligence.

Question 19: Endorsement

Answer:

Document attached to an insurance policy that changes the policy in some way

Question 20: Authorized Insurer (Admitted/Approved)

Answer:

Company that meets a state insurance department's standards and is authorized to do business in that state.

Question 21: Deductible

Answer:

Dollar amount the insured must pay on each loss to which the deductible applies; the insurance company pays the remainder of each covered loss, up to the policy limits.

Question 22: Claim Adjuster

Answer:

Person employed by or acting on behalf of an insurance company to evaluate and settle insurance claims; the adjuster must determine the cause of loss, whether the loss is covered by the policy, the value of the loss, and the amount of loss payable by the policy

Question 23: Farm Coverage

Answer:

Part of the commercial package policy that provides property and liability insurance to farmers for both their personal and business exposures

Question 24: Direct Loss

Answer:

Financial loss resulting directly from a loss to property

Question 25: Consultant

Answer:

Insurance professional who, for a fee, offers advice on the benefits, advantages, and disadvantages of various insurance policies; sells advice, not insurance