state farm Exam Questions and Verified Answers 100% Solved
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Course
State Farm
Institution
State Farm
which of the following refers to being restored to the financial condition you were in before a loss? - ANSWER-indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$ from his insurance company and 4000$ from the other driver. by receiving a profit from the loss, ...
state farm Exam Questions and Verified
Answers 100% Solved
which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWER-indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$ from his
insurance company and 4000$ from the other driver. by receiving a profit from the loss,
Mark is in violation of.. - ANSWER-principle of indemnity
the transfer of risk from one party to another is called - ANSWER-insurance
the principle of indemnity is designed to prevent - ANSWER-keeps the insured from
making a profit from an insured loss.
the fee paid by the insured in exchange for an insurance policy is called a - ANSWER-
premium
insurance - ANSWER-transfers risk of financial losses from one party to another
insured - ANSWER-individual or organization that pays premiums in exchange for
protection
insurer - ANSWER-company group or government agency offering financial protection
insurance policy - ANSWER-a legally binding contract in which the insurer agrees to
take on specified risks in exchange for the insured's premiums
principle of indemnity - ANSWER-restoration to previous financial condition; no more,
no less.
what are the four qualifications of a contract - ANSWER-agreement, consideration,
competent parties, and legal purpose. must be 18 years of age
what is not a requirement for a legally binding contract - ANSWER-notarization
when an insurer issues an insurance policy, the actual item, person or organization that
is being insured is called the - ANSWER-the risk
what is a reserve, in insurance terms - ANSWER-a pool of collected premiums that the
insurer sets aside to pay claims
,aleatory - ANSWER-of or pertaining to accidental causes; of luck or chance;
unpredictable
unilateral - ANSWER-one-sided
utmost good faith - ANSWER-both parties must act honestly and openly in order for the
contract to be valid
adhesion - ANSWER-one party sets the terms of the contract; the other may simply
agree or not agree
unilateral - ANSWER-only the insurer makes a promise to act; the insured can void
contract at any time
personal - ANSWER-the insured person is protected from losses, not the covered
property.
conditional - ANSWER-the insurer must only honor the contract if the insured meets
certain conditions.
aleatory - ANSWER-the exectution of the contract depends on an unknown future
event.
an insurance applicat revealing his convictions for drunk driving to an insurer is an
example of - ANSWER-utmost good faith.
tom purchases a new car from his local car dealer. he also decides to get insurance
coverage that will pay to repair the car if he were to get into an accident. this is because
tom wants to protect - ANSWER-his own financial interest in the car.
tom decides to purchase an insurance policy to protect his home. according to the
definition of a personal contract, which of the following most accurately describes what
tomes insurance actually protects - ANSWER-toms financial interest in thee home
what is not true about an aleatory contract - ANSWER-in an aleatory contract, the
amount of benefit to the insured and insurer is equal.
what does D.I.C.E stand for? - ANSWER-declarations page (and definitions), insuring
agreement, conditions and exclusions (and endorsements)
'we will provide the insurance described in this policy in return for the premium and
compliance with all applicable provisions of this policy.' in which section of the insurance
policy might this statement be found? - ANSWER-insuring agreement
in which section of the policy might you find the following statement ? 'damage to
insured property must be reported within 15 days of the damaging occurrence.' -
ANSWER-conditions
, which of these causes of loss is least likely to be covered by a typical insurance policy?
- ANSWER-nuclear hazard
edna loses some of her property in a hailstorm. when an adjuster comes to investigate
the loss, he gives an estimate that edna thinks is far too lowl. as negotiations continue,
neither edna nor the adjuster will budge. where in Ednas policy would you find the
procedure to follow in this situation? - ANSWER-conditions
conditions - ANSWER-lists requirements that the insured must meet for coverage to
apply
declarations - ANSWER-information that makes the policy unique to a specific insured.
exclusions - ANSWER-causes of loss or items of property that are not covered by the
policy
endorsements - ANSWER-add, reduce, or change the coverage of the policy in some
way
definitions - ANSWER-explains exactly what specific words mean in the context of the
policy
insuring agreement - ANSWER-the essence of the contract. often only a single
sentence
Xavier owns a small insurance company. recently the company won a bid to insure a
new housing development in Omaha, NE. his company can hangle any claims that
arise, but if a series of tornados were to tear through the area, destroying the entire
development, Xaviers company would be hit extremely hard financially. which type of
insurer could help Xaviers company protect itself the most from this potential loss? -
ANSWER-a re-insurer
what type of insurance provider operates on a for-profit basis? - ANSWER-mutual
insurance companies
what type of insurer sells shares to the public and is owned by its shareholders -
ANSWER-a stock insurance company
publicly traded acme insurance is listed on the new York stock exchange, and would
therefore be considered - ANSWER-a non-participating insurance company.
stock insurance companies - ANSWER-always for profit, publicly traded, 'non-
participating' insurers: no dividends go to policy holders
mutual insurance company - ANSWER-owned by policy holders (no shareholders),
elect board directors, participate in dividends
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