• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

Card Range To Study



Play button


Play button




Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

30 Cards in this Set

  • Front
  • Back

An _______________ "classifies the applicant based upon the underwriting requirements of the insurer.


What is an economic interest in a property that must exist at the time of loss?

Insurable Interest

Insurers also keep track of their "__________," which is the percentage of claims paid in comparison to the total premiums collected during a particular period of time.

Loss Ratios

_________ are set by the insurer at a level sufficient to pay claims and company expenses.


What are the six different types of ratings?

-Judgment Rating

-Manual Rating

-Merit Rating

-Retrospective Rating

-Experience Rating

-Loss Cost Rating

The underwriter determines the individual rate using their intuition and experience instead of a rating manual.

Judgement Rating

The underwriter simply refers to rates as published in the insurer's rating manual, which have been developed by actuaries based on the law of large numbers.

Manual Rating

The underwriter starts with "manual" rate, which is then modified, based on past loss experience or other factors unique to the risk involved. Lower premiums are given to those clients who have fewer prior losses.

Merit Rating

A rating plan, subject to minimum and maximum premiums, where the final premium is not determined until the end of the policy period and is based on the insured's own prior loss experience. Often used in connection with Workers' Comp and Commercial General Liability insurance policies.

Retrospective Rating

Often used to calculate premiums on large group life or health insurance policies, this is a form of merit rating that modifies the manual premium based on the insured's own loss experience.

Experience Rating

Often used by insurers who utilize rating plans developed by the ISO (Insurance Services Office), who publishes rates based only on expected losses, leaving insurers free to add in their own factors relating to expenses and profit.

Loss Cost Rating

Failure to act as a reasonable person


What are the three types of damages?

Special, General, Punitive

What type of damage is not covered by insurance?


What is an Open Peril Policy

Its an all risk policy

Example: HO-3 and HO-5

You will find it on the exclusions page

Named perils or also know as specified peril policies. What page will you find what is covered?

On the inuring agreement page.

A ________ loss is one that happens suddenly due to a covered peril, such as a fire, lightening, wind, hail, etc.


An __________ loss is a loss that occurs as a consequence of the direct loss (also known as a consequential loss).

Indirect loss

Most property policies either provide some indirect coverage automatically or they can be purchased as an optional coverage, such as _______ ________ _______ on a Commercial Package Policy.

Business Income Insurance

___________ __________ insurance provides a single amount of insurance that may apply to different types of property or to different locations.

Blanket Property

Specific property insurance provides a specific amount of insurance for specific types of property at a specific location.

Specific Coverage

Property insurance rates are calculated per $100 of coverage based upon the fire protection class of the area where the property is located and the type of construction.

Basic Type of Construction

Real property may be constructed as frame (wood), masonry (brick) or block. In some areas, frame construction is now commonly steel and concrete, which is known as "_______________"

Fire Resistive

Actual Cash Value (ACV) is determined by finding the replacement cost of the property at today's prices (not counting the land) and subtracting out any depreciation, which is based upon the age of the property.

Loss Valuation Techniques

What is the formula for determining the ACV

Replacement Cost (RC) minus Depreciation = ACV

What all is in the policy structure?



-Insuring Agreement or Clause.

-Additional/Supplementary Coverage.




Where would you find who is covered as an insured on the policy?

On the definitions page

While personal Auto policies usually have a policy of just ______ months.


Most property policies are written for a period of _________ __________?

One year

Under the _____________ clause, the insurer is permitted to change the terms of the contract at any time as long as the change benefits the insured and no additional premium is charged.