USAA Licensing Exam Verified Questions And Answers

USAA Licensing Exam Verified Questions And Answers

Insurance - ANS-Transfer of risk from one person or organization to an insurance
company
Indemnity - ANS-The principle to restore the insured to the pre-loss economic or
financial condition.
Law of Large numbers - ANS-Mathematical principle used by insurers to predict losses
to charge the appropriate premiums
Insurable Interest - ANS-Proof that someone stands to lose financially if a loss occurs;
must exist at the time of the loss in property and casualty insurance
Binder - ANS-Temporary insurance contract; commits the company to act as if a policy
has been issued
Peril - ANS-Cause of loss
Direct Loss - ANS-Immediate actual physical damage to tangible property
Indirect loss - ANS-Inability to use property as a result of a direct loss
Risk - ANS-Chance of loss; uncertainty of loss
What are the two types of risk? - ANS-Speculative and Pure
Speculative Risk - ANS-Involves the simultaneous chance of gain or loss: is not
insurable
Pure Risk - ANS-a risk that presents the chance of loss but no opportunity for gain
(insurable)
What are two examples of speculative risk? - ANS-Gambling
Investing
What is an example of your risk? - ANS-Car accident
Physical hazards include - ANS-Visible condition that increases the chance of loss
Morale Hazard - ANS-Attitude of carelessness or indifference to loss
Insurer - ANS-The insurance company (a.k.a. second party to the contract)
Named Insured - ANS-A party named on the declarations who is purchasing the
insurance policy (a.k.a. first party to the contract)
Insured - ANS-Who the insurer promises to protect in addition to the named insured
Limit of Liability - ANS-The maximum amount that can be paid for a covered loss
Consideration - ANS-An exchange of value between parties to a contract
Waiver - ANS-The voluntary relinquishment of a known right
What is Estopple? - ANS-When an agent tells an insured/makes the statement there is
coverage for a loss when there is no such coverage, then the insurer is prevented from
denying the claim as a result of what precedent?
Concealment - ANS-Insured or prospect deliberately withholding material information
from the insurer, this voids coverage
Material Misrepresentation - ANS-Insured or prospect giving incorrect material
information to the insurer, this voids coverage
Warranty - ANS-A written condition in the policy that must be true at the time of the loss
Texas Department of Insurance - ANS-In Texas, the insurance industry is regulated by
the
Commissioner - ANS-The (_______) is appointed by the governor and heads the Texas
Department of Insurance
Adjuster - ANS-According to the Texas Insurance Code, any person who investigates or
adjusts losses, or any person who supervises the handling of claims must be licensed
as an (_______________)
A Staff Adjuster - ANS-A (_____) is on the payroll of an insurance company and is paid
a salary or by the hour
Independent Adjuster - ANS-A (___) handles claims for one or more insurance
companies and receives a fee based on time and expense.
Public Adjuster - ANS-A (__) works on behalf of the insured in negotiating a claim
settlement. In Texas a (______) requires another separate license called a "public
adjusters license".
Insurance Agent - ANS-Persons marketing (Selling) insurance products are called (___)
Alien Insurer - ANS-An insurer organized and domiciled outside the United States is
called an (_____)

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