Public adjusting

The purpose of the principle of indemnity is:

Ex:This means the insurer indemnifies the policyholder or insured, promising to compensate him for any insured loss or damage

• to prevent an insurer from making a profit on a loss.

• to transfer the right to collect a debt from one party to another.

• to transfer the risk of financial loss from one party to another.

• to prevent an insured from making a profit on a loss.

Which of the following best defines premium?

Ex:a sum added to an ordinary price or charge

• A legal agreement providing temporary evidence of insurance until a policy is issued

• The fee paid by the insured in exchange for an insurance policy

• 
  A legally enforceable agreement between parties

• Transfer of risk of financial loss from one party to another

What is a reserve, in insurance terms?

Ex:The regulatory body of the government often checks on the reserve to ensure that policyholders will actually be covered according to the risks that they have insured.

• A group of policyholders who pay into the same pool of premiums

• The amount of revenue that the insurer sets aside to pay employee salaries

• A set of rules governing how the insurance industry should work

• A pool of collected premiums that the insurer sets aside to pay claims

Which of the following refers to being restored to the financial condition you were in before a loss?

• Indemnification

  Definition:an agreement where your insurer helps cover loss, damage or liability incurred from a covered event

• Subrogation

  Definition:Subrogation is the transfer of rights that allows the insurer to recover its losses after it has indemnified a policyholder. Indemnification means being restored to the financial condition you were in before a loss.

• Restoration

  Definition:helps the sum insured of your health insurance policy to be restored up to the maximum limit as soon as it gets exhausted after a claim

• Estoppel

  Definition:when an insurer is prevented from asserting a right or defense that it would normally have under the terms of an insurance policy

Which of the following describes a contract in which only one party makes a promise to perform?

• Utmost Good Faith Contract

  Definition: a minimum standard, legally obliging all parties entering a contract to act honestly and not mislead or withhold critical information from one another

• Personal Contract

  Definition:agreement concerning an insured individual, not the insured's property

• Aleatory Contract

  Definition:a contract where performance of the promise is dependent on the occurrence of a fortuitous event.

• Unilateral Contract

  Definition:the actions undertaken by one individual or group alone

Charlotte’s son just turned 16 and got his driver’s license. She wants him to be covered, so she adds him to her auto insurance policy. Where would this addition be found in Charlotte’s policy?

• Insuring agreement

  Definition:that portion of the insurance policy in which the insurer promises to make payment to or on behalf of the insured.

• Endorsements

  Definition:an amendment to an existing insurance contract that changes the terms of the original policy

• Exclusions

  Definition:provision within an insurance policy that eliminates coverage for certain acts, property, types of damage or locations

• Conditions

  Definition:provisions inserted in the policy that qualify or place limitations on the insurer's promise to pay or perform

Which of the following statements is NOT true about an insurance policy?

• The concept of utmost good faith only applies to the insured.

• An insurance policy actually protects the policyholder’s financial interests in the insured item, not the insured item itself.

• Ambiguities in contracts of adhesion often favor the insured.

• The insurer holds the balance of power in the creation of an insurance policy.

Josephine’s gas station suffered severe damage when one of the fuel tanks caught fire and exploded. After completing his inspection, the adjuster determines that Josephine’s claim is not covered because she did not have automatic shut-offs for the fuel tanks. If this safety measure was in fact required in order for coverage to apply, where might Josephine find it in the policy?

• Declarations

  Definition:

  The declarations page provides a general overview of who the policy covers, whereas the conditions section is where the policy establishes a set of conditions that the insured must meet in order for the policy to be valid.

• Exclusions

• Conditions

• Endorsements

Which of the following best describes a Fraternal Benefit Society? definition.:Fraternal benefit societies are based on religious, national, or ethnic lines.

• A fraternal benefit society uses investors' money to pay claims.

• A fraternal benefit society pays dividends to its stockholders.

• A fraternal benefit society is a social organization based around common interests and beliefs.

• A fraternal benefit society is a for-profit provider of insurance.

A captive insurance company:

Definition:a captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company. Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured

• operates through an attorney-in-fact to provide insurance benefits for its members.

• provides insurance for insurers.

• provides insurance that is designed to meet the needs of the general public.

• exists solely to provide insurance for its parent company