Exam (elaborations)
NYS LICENSING EXAM
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Exam of 29 pages for the course NYS . at NYS . (NYS LICENSING EXAM)
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NYS LICENSING EXAMInsurance - Answers-institution or business that transfers risk by the accumulation of
capital from the many to pay for the losses of the few
Property Policies - Answers-covers policyholders property
Real Property - Answers-Buildings, land, and anything attached to the buildings and
land
Personal Property - Answers-everything else...excluding buildings, land, and anything
attached
Named Peril Policy - Answers-only covers perils that are listed on the policy. there will
be a list. if its not on the list...its not covered. **if there is a dispute over whether a peril
is covered it would be the policyholders responsibility to prove the coverage.
Proximate Cause - Answers-first peril in an unbroken chain of events
Special Peril/Open Peril (All Risk) - Answers-cover all perils except for those that are
specifically excluded. If it doesn't state its not covered then it is covered. **if there is a
dispute over whether something is covered it would be the insurance company's job to
prove its not covered.
Loss - Answers-unintentional decline, disappearance, or reduction in the value of
property.
Direct Loss - Answers-physical loss to property resulting from a peril. (ex. fire damage to
a home)
Indirect Loss/Consequential Loss - Answers-economic loss caused by a direct loss. (ex.
hotel room because house burned down)
Risk - Answers-uncertainty concerning loss. The chance of loss.
Speculative Risk - Answers-chance of loss and the chance of gain. (ex. gambling)
*is NOT insurable
Pure Risk - Answers-the chance of loss with no chance of gain. (ex. getting into an
accident) * this IS insurable
Exposure - Answers-condition or situation that presents the possibility of a loss. (ex.
things..6 trucks = 6 exposures)
Hazard - Answers-condition that increases the chance of a loss. (ex. basement filled
with garbage)
,Moral Hazard - Answers-a hazard caused by policyholder's dishonesty. (ex. think about
commiting a crime)
Morale Hazard - Answers-a hazard caused by the policyholder's poor attitude. (doesn't
care)
Specific Property Policies - Answers-only covers property that is listed on the policy.
(ex. jewelry pieces)
Blanket Property Policy - Answers-either covers all insurance property or all property of
a certain type. *Property does not have to be listed
Casualty Policy aka Liability Policy - Answers-cover legal liability. covers the
policyholder if they are legally responsible for creating the damage. (ex. slip and fall)
Monoline Policy - Answers-cover only one line or one type of insurance
*covers only liability or property...not both
Package Policy - Answers-covers more than one line or more than one type of
insurance
(ex. homeowners policy...covers property and liability)
Peril - Answers-a cause of a loss
(ex. fire, wind, rain...)
Physical Hazard - Answers-caused by a material, structural, or operational condition.
(frayed wires)
Offer and Acceptance - Answers-(Agreement) one party must make an offer and the
other party must accept the offer.
Offer - Answers-is the policyholder submitting their application
Acceptance - Answers-the insurance company issues a binder
Binder - Answers-temporary contract for insurance. It can be written or verbal.
Competent Parties - Answers-both parties must be mentally capable of understanding
the contract.
Legal Purpose - Answers-cannot have a binding contract on something illegal (ex. can't
insure a warehouse w/ illegal drugs.)
, Consideration - Answers-each party must provide something to the other party. (ex.
money, services, promises) *the minimum consideration that the policyholder can
provide is the promise to pay premiums.*
Adhesion - Answers-any ambiguity in the language of the contract will be interpreted in
the favor of the policyholders.
Reasonable Expectations - Answers-policy must cover what a reasonable policyholder
would expect it to cover.
Indemnity Contract - Answers-under an insurance contract payment is limited to
financial loss. the policyholder should not gain from insurance...*put policyholder back
into same position they were in before the loss**
Utmost Good Faith - Answers-both parties are expected to act honestly and cooperate
with each other.
Representation - Answers-an affirmative statement that something is true at the time the
statement was made. **true as of right now**
Misrepresentation - Answers-the act of providing false information. can be intentinal or
not.
Concealment - Answers-withholding or hiding information. **very close to
misrepresentation.
Fraud - Answers-deliberate misrepresentation or concealment that does harm.
Claim Payment & Cancellation in regards to Misrepresentation, Concealment, or Fraud -
Answers-If the insurance company can prove that the fraud is material and because of
this they would not have written the policy coverage can be denied. Applies when a
policyholder tries to file a claim.
Warranty - Answers-an affirmative statement that something is true and will be true for
the entire policy (ex. working fire alarm system)
Insurable Interest - Answers-financial stake in property at the time of the loss. (ex. own
home at time of claim)
Waiver - Answers-intentional and voluntary relinquishment of a right caused by actions
taken or not taken.
Estoppel - Answers-prevents a party from asserting a right that they already waived.
Aleatory - Answers-insurance contracts are written on a contingent basis for the loss.
One pary only required to act if something happens. (ex. insurance companies)
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