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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 ?
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Errors and Omissions
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What is an application ?
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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.
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What process is not included in the underwriting process ?
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Issuing the rate
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when dealing with insurannce in connection with sales or loans, violating the legal provisions specified by CA law is considered a
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Misdemeanor
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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
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True
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What is NOT an action a person performs when transacting insurance ?
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Calling an insurer for a price quote
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What is NOT a source of information an underwriter might use to investigate an application in order to approve or reject it ?
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Department of Industrial Relations
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In a legal relationship, which authority does a principal (company) give the agent in writing
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Express Authority
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What is NOT a type of authority givven to agents ?
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Customary Authority
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What is a responsibility of the insured in an insurable contract ?
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Give true statements and information on the application
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The punishment for twisting or misrepesentation would be :
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Up to $25,000 and up to 1 year in jail
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Risk is defined as :
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Uncertainty of loss
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Insurance is a contract whereby one undertakes to indemnify another against:
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Damage
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The actual cause of a loss is called a :
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Peril
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Estoppel
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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
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Insurance
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Insurance Substitution of a small certain loss for a large uncertain loss is :
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Exposure
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The state of being subject to a loss is considered
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The description of when one party intentionally gives the other party false information in order to benefit from the unlawful gain is called :
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Fraud
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The five risk management strategies are :
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Share
Transfer Avoid Reduce Retain |
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The four types of hazards are :
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Moral, Physical, Morale and Legal
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Property Loss Exposure
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The degree of loss a person/organization faces in regard to property (building, personal items)
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Liability Loss Exposure
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The degree of loss a person/organization faces in regard to lawsuits brought by a third party
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Human Personnel Loss Exposure
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The degree of loss an employer faces in regard to lawsuits brought by employees (ie., workers compensation)
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Requirements for an ideally insurable risk
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The loss must be an accident;create economic hardship, fit within the law of large numbers, predictable, definite and measurable and cannot be catastrophic
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Indemnity
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the insurer will restore the insured to the condition to the insured was in before the loss occurred
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Private insurers include :
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Stock Insurance Companies; Mutual Insurance Companies; Reciprocal Insurance Companies
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Adverse Selection
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When people seek insurance at the last minute
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Deductible
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The amount of money the insued pays before the insurer (company) pays any part of the claim
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Reinsurance
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The insurer transfers all or part of the risk to another insurer
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Contract
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An agreement between two or more parties enforeceable by law
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Tort
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A civil wrong doing that covers situations where people are epected and obligated (by law) t act or not act in certain ways
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Two typs of Torts are
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Intentional or Unintentional (referred to as negligence)
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The binding force of a contract is
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consideration
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Misrepresentation
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Not a mistake - an intentional false statement of a material fact given to an insurer with intent to defraud
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