Claims Adjuster Exam __ Q’s & A’s
Insurance Correct Ans - -an economic device used to protect against
extreme unforeseen loss
- the transfer of risk from one party to another
Premium Correct Ans - -the fee paid by the insured in exchange for
insurance
Principle of Indemnity Correct Ans - -the insurer should be restored to
where they were before the incident
-no profit can be made
Idemnification Correct Ans - -to compensate for loss or damage; to
provide security for financial reimbursement to an individual in case of a
specified loss incurred by the person
4 Elements of a Legal Contract Correct Ans - -Agreement- signature or
handshake
-Consideration- money exchange
-Competent Parties-18 yrs. old, sober, sane
-Legal Purpose-no contracts for money laundering
Insured Correct Ans - individual who pays premiums in exchange for
protection
-can be a person, person's or an organization
- "You," "Your," or "Your's"
(if the insured is a group it is important to list the "first named insured,"-
because that is the only one that can authorize changes to the policy)
Insurer Correct Ans - -company or group offering insurance
-can be a government organization
-terms- "We," "Us," and "Our
6 Characteristics of a Contract:
Personal Correct Ans - -protects the person (insured) from loss
-does not protect property from becoming damaged
,-coverage follows the person not the property
6 Characteristics of a Contract:
Adhesion Correct Ans - -one party dictates terms
-the insured has no power to write the contract
-courses will favor the insured in a case of ambiguity
6 Characteristics of a Contract:
Utmost Good Faith Correct Ans - -applicants are expected not to
withhold any information or the contract can be voided
6 Characteristics of a Contract:
Aleatory Correct Ans - -depending on a unknown future event
-Insurer only has to pay in and when covered losses occur
6 Characteristics of a Contract:
Unilateral Correct Ans - -only the insurer make an obligation to pay
for covered losses
6 Characteristics of a Contract:
Conditional Correct Ans - -the insurer only has to perform if certain
conditions are met
Policy Sections
Declarations Page Correct Ans - -makes contract specific to the policy
holder
Includes:
-Name of both parties
-Policy Number
-Location & Description of Item
-Value of Insured Item
-Value of item dates
, - Amount & Limit of Coverage
-Deductible
-Premium
Policy Sections
Definitions Correct Ans - -it is not technically essential
-need to know info. or language used in the contract
Policy Sections
Insuring Agreement Correct Ans - summarizes:
-what is covered
-which losses are covered
-maximum limit of policy
-the core of the contract
-often one sentence
Policy Sections
Conditions Correct Ans - -the insurer specifies any limits or
qualifications the policy holder must meet
-will explain what procedure to follow in the event of a dispute
Policy Sections
Exclusions Correct Ans - - what is not covered (excluded) under the
contract
Policy Sections
Endorsements Correct Ans - -any additions to the policy
-can be added at anytime (could increase or decrease the price)
-aka: ryder, addendum, attachments
Types of Insurance
Government Insurance Correct Ans - -mandatory participation
-benefits prescribed by law
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