Study guides, Class notes & Summaries

5 important points in the definition of insurance - 1. Insurance shifts financial responsibility from one party to another 2. Payment will be made only in event of certain risk or peril 3.Amount restricted to amount required to indemnify insurer 4. Covers accidental and future losses to which object may be exposed 5. Indemnity provided in form of money or repair/replacement Definition of "spread of risk" - Losses shared among many to reduce the financial impact/burden (losses of few s...

risk - is the chance of financial loss peril - is the caise of financial loss for example- fire water and earthquake what is the main purpose of insurance - is to allow the spread of risk indemnity - means restoring the insureds to the sam financial position as they were in immediately prior to the loss. whose option is to of how they want to settle a claim? - the insurer insurance indemnifies - future and accidental losses only, not the planned losse

FUNDAMENTALS OF INSURANCE - LICENSING EXAM 2 2024| ACTUAL EXAM QUESTIONS WITH 100% CORRECT ANSWERS| GRADED A+ 1. To "Bind a Risk" means: a. Having authority from the Insurer to put insurance in force b. Finding a company willing to give a quote on a risk c. Getting underwriting information from a client d. Automatically renewing an existing policy - correct answer a. Having authority from the Insurer to put insurance in force "Subrogation"d means: a. The right of the insurance company to...

1. Your client has made application for "appraisal". The intent of the appraisal process is to settle the dispute between your client and the insurer regarding the a. Amount of the settlement being offered b. Denial of insurance coverage under the policy c. Right of the insured to purchase the salvage after an insured loss d. Premium charged to coverages being provided by the insurer ANS a 2. An indifferent attitude towards losses because of the presence of insurance indicates the pres...

1. Insurance plays an important role in managing financial risk. The main purpose of Insurance is to: A. Enable the consumer to obtain loan or mortgage. B. Provide employment and investment capital. C. Allow spread of risk. D. Reduce losses through loss prevention and loss reduction.: C. Allow spread of risk. 2. When the insurer terminates an insurance policy, ALL of the following conditions apply, EXCEPT one. Pick the exception: A. The insured is entitled to 15 days' written notice of te...

1. Chapter 1 - Intro: 2. List the 5 functions of insurance:: 1) Spread of risk 2) Basis of credit system 3) Eliminate worry and develop entrepreneurship 4) Loss reduction and prevention (road safety, alarms, etc.) 5) Employment opportunity 3. Definition of insurance (3 parts): 1) insurance provides a means of shifting ones financial responsibility from a loss to another party ii) payment will be made only in the event of the happening of a certain risk or peril iii) the amount of the pay...

1. Main purpose of Insurance ANS Allow the spread of risk 2. Definition of Insurance ANS -Payment's made only when a certain peril has dam- aged the insured object -Payment's limited to actual amount of loss, no more and no less -There's no payment for losses that are deliberately caused by an insured. 3. Five important points to the definition of insurance ANS -Spread of Risk -Basis of Credit System -Eliminates Worry/Encourages Entrepreneurship -Loss Prevention and Loss Reduction ...

2. The major function of insurance is to achieve a spread of risk. Explain what is meant by "spread of risk" ANS To share the losses of a few among the many 3. An analysis of the definition of insurance reveals five important points. Identify these five important points ANS - Shifting one's financial responsibility for loss to another party - Payment made only in event of certain risk or peril - Payment restricted to the amount required to indemnify the insured - Insurance covers losses...

1. The major function of insurance is a. To reduce the cost of the losses b. To share the losses of the few among the many c. The safeguard the interest of mortgages d. To serve as a basis of existing credit system ANS b. To share the losses of the few among the many 2. A peril if best defined as a. The chance of a loss b. The occurrence of a loss c. The cause of a loss d. The result of a loss ANS c. The cause of a loss 3. Indemnify means a. Returning the premium of the insure...