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34 Cards in this Set

  • Front
  • Back
What kind of insurance policy would defend an agent from lawsuits for giving incorrect advice or unknowlingly provides incorrect information to a client ?
Errors and Omissions
What is an application ?
A document that states the name of the insured, the premium, and other facts that help the insurer decide whether to accept or reject the app.
What process is not included in the underwriting process ?
Issuing the rate
when dealing with insurannce in connection with sales or loans, violating the legal provisions specified by CA law is considered a
Misdemeanor
True or False - No person involved in the business of financing the purchase of real estate may require the purchase of insurance through a specific agent as part of the requirements in the purchase
True
What is NOT an action a person performs when transacting insurance ?
Calling an insurer for a price quote
What is NOT a source of information an underwriter might use to investigate an application in order to approve or reject it ?
Department of Industrial Relations
In a legal relationship, which authority does a principal (company) give the agent in writing
Express Authority
What is NOT a type of authority givven to agents ?
Customary Authority
What is a responsibility of the insured in an insurable contract ?
Give true statements and information on the application
The punishment for twisting or misrepesentation would be :
Up to $25,000 and up to 1 year in jail
Risk is defined as :
Uncertainty of loss
Insurance is a contract whereby one undertakes to indemnify another against:
Damage
The actual cause of a loss is called a :
Peril
Estoppel
When a right or privelage has been given up, a party cannot re-assert that right or privelage. The process of preventing the party from reasserting that right or privelage is known as Estoppel
Insurance
Insurance Substitution of a small certain loss for a large uncertain loss is :
Exposure
The state of being subject to a loss is considered
The description of when one party intentionally gives the other party false information in order to benefit from the unlawful gain is called :
Fraud
The five risk management strategies are :
Share
Transfer
Avoid
Reduce
Retain
The four types of hazards are :
Moral, Physical, Morale and Legal
Property Loss Exposure
The degree of loss a person/organization faces in regard to property (building, personal items)
Liability Loss Exposure
The degree of loss a person/organization faces in regard to lawsuits brought by a third party
Human Personnel Loss Exposure
The degree of loss an employer faces in regard to lawsuits brought by employees (ie., workers compensation)
Requirements for an ideally insurable risk
The loss must be an accident;create economic hardship, fit within the law of large numbers, predictable, definite and measurable and cannot be catastrophic
Indemnity
the insurer will restore the insured to the condition to the insured was in before the loss occurred
Private insurers include :
Stock Insurance Companies; Mutual Insurance Companies; Reciprocal Insurance Companies
Adverse Selection
When people seek insurance at the last minute
Deductible
The amount of money the insued pays before the insurer (company) pays any part of the claim
Reinsurance
The insurer transfers all or part of the risk to another insurer
Contract
An agreement between two or more parties enforeceable by law
Tort
A civil wrong doing that covers situations where people are epected and obligated (by law) t act or not act in certain ways
Two typs of Torts are
Intentional or Unintentional (referred to as negligence)
The binding force of a contract is
consideration
Misrepresentation
Not a mistake - an intentional false statement of a material fact given to an insurer with intent to defraud