Washington State Property Casualty Insurance Exam.pdf file:///C:/Users/HP/Desktop/New%20folder%20(2)/Washington%20
Washington State Property Casualty
Insurance Exam
1. Apparent: is the appearance or assumption of authority based on the actions,
words, or deeds of the principal or because of circumstances the principal created.
2. Mutual Company: Owned by the policyowner and issue participating policies.
Policy owners are entitled to dividends, which are a return of excess premiums and
are therefore non-taxable. Dividends are not guaranteed.
3. Sharing: A method of dealing with risk for a group of individual persons or
businesses with the same or similar exposure to loss to share the losses that occur
within that group. A RECIPROCAL insurance exchange is a form of risk-sharing
arrangement.
4. Retention: Is the planned assumption of risk by the insured through the use of
deductibles, co-payments, or self-insurance. It is also known as self-insurance whenthe
insured accepts the responsibility for the loss before the insurance company pays.
5. Express Authority: Is the AUTHORITY a principal intends to grant to an agentby
means of the agent's contract. It is the authority that is written in the contract.
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,Washington State Property Casualty Insurance Exam.pdf file:///C:/Users/HP/Desktop/New%20folder%20(2)/Washington%20
6. Insurable Risk: In order to be characterized as a pure risk, the loss must be dueto
chance, definite, measurable, and predictable, but not catastrophic.
7. Insurance Policy Conditions: Section of an insurance policy that indicates the
general rules or procedures that the insurer and insured agree to follow under the
terms of the policy. Examples: Inspection may be made as needed/ Changes to the
policy must be made by insurer and be in writing/ Liberalization clause/ Return of
premiums, which dictates methods used.
8. Loss Costs Rating: Type of rating: Method developed by the insurance services
office Inc. (ISO) that provides an insurer with that portion of a rate that does not
include provisions of expenses or profit and are based on historical aggregate lossand
loss adjustment expenses projected through development to their ultimate valueand
through trending to a future point in time.
9. Strict Liability: Is commonly applied in product liability cases. The business is
then liable for defective products, regardless of fault or negligence.
10. Insuring Agreement: The part of the policy structure that describes the insured
perils and the method of indemnification.
11. Conditions: States the legal obligations and duties of the parties to the contract.
12. Valued Policy: Provides for payment of the full policy amount in the event of a
total loss WITHOUT regard to actual value or depreciation.
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13. Contributory Negligence: In states that have this, the defendant must have been
100% at fault for an accident and the claimant free of fault if the claimant is tobe
successful in collecting damages.
14. Agreed Value: A property policy with provisions agreed upon by the insurer
and insured as to the amounts of insurance that represents a fair valuation for the
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