8/29/24, 2:35 PM 2024/2025 ARKANSAS PROPERTY AND CASUALTY INSURANCE EXAMQUESTIONS AND VERIFIED ANSWERS NEWES…
2024/2025 ARKANSAS PROPERTY AND
CASUALTY INSURANCE EXAMQUESTIONS AND
VERIFIED ANSWERS NEWEST UPDATE
Terms in this set (178)
What is insurance? Transfer of Risk
What is a risk? the uncertainty or chance of loss occuring.
What are the three types Moral, Morale, and Physical
of hazards?
Perils are causes of loss insured against in an insurance
What is a peril?
policy.
What does indemnify (Reimbursement) an insured is permitted to collect
mean? only the extent of the financial loss, no financial gain.
the insurer's legal right to seek damages from third
What is subrogation?
parties, after it has reimbursed the insured for the loss.
Accident is a sudden, unplanned event that is not
What is the difference under the control of the insured.
between accident and Occurrence is losses caused by continuous or
occurence? repeated exposure resulting in injury or damage that is
neither intended or expected.
Direct losses can cause indirect losses.
How are direct and Ex. A house fire that burns a living room = Direct loss
indirect losses related? The water damage to the kitchen from the fire fighters
putting out the fire = indirect loss
Vacancy means that a property has no contents,
What is the difference
furnishings, or occupants.
between vacancy and
Unoccupancy means a property that has contents or
unoccupancy?
furnishings, but it is not being used or lived in.
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What type of insurance Blanket insurance
provides coverage for
multiple classes of
property at one location?
Explain the actual cash It recognizes the reduction of value of property as it
value method. ages.
When absolute liability is No, the injured party does not need to prove
involved, does the injured negligence.
party need to prove
negligence?
If a product is unsafe, what Strict Liability
kind of liability applies to
the manufacturer?
an act or an event considered a natural and reasonably
What is proximate cause? foreseeable cause of damage to property or injuries to
a plaintiff.
What is certificate of Written evidence showing that an insurance policy has
insurance? been issued.
What are the four elements Agreement - offer and acceptance, consideration,
of an insurance contract? competent parties, and legal purpose.
Representation is statements believed to be true to the
What does representation
best of ones knowledge.
mean and how does it
Warranty is an absolute true statement upon which the
differ from warranty?
validity of the insurance policy depends.
Temporary oral or written agreement issued by an
What is a binder? agent or insurer that provides temporary coverage
until a policy becomes effective.
What information is Basic underwriting information - insured's name,
included in a policys address, amount of coverage and premiums, and
declarations? descriptions of insured locations.
Additional coverage portion of a policy that provides
What are additional or
an additional amount of coverage for a specific loss
supplementary payments?
expense, at no additional premium.
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