MISSISSIPPI PROPERTY AND CASUALTY INSURANCE TEST COMPLETE QUESTIONS & ANSWERS (GRADED A).BUY Quality Materials!
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MISSISSIPPI INSURANCE
MISSISSIPPI PROPERTY AND CASUALTY INSURANCE TEST COMPLETE QUESTIONS & ANSWERS (GRADED A).BUY Quality Materials!
Risk
uncertain, possibility of loss.
Speculative risk
chance of loss or gain
Pure risk
chance of loss only
What type of risk is insurable?
Pure risk
peril
the cause of loss
...
mississippi property and casualty insurance test c
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MISSISSIPPI PROPERTY AND CASUALTY INSURANCE TEST COMPLETE QUESTIONS
& ANSWERS (GRADED A).BUY Quality Materials!
Risk
uncertain, possibility of loss.
Speculative risk
chance of loss or gain
Pure risk
chance of loss only
What type of risk is insurable?
Pure risk
peril
the cause of loss
If a house burns down what is the peril?
Fire
loss
the unintended, unforeseen damage to property, injury, or amount paid.
direct loss
physical loss to property with no intervening cause.
Indirect loss
consequential loss as the result from direct loss.
hazard
anything that increases the chance that a loss will occur
physical hazard
the hazard can be seen
moral hazard
dishonesty; lacks moral standards that cause them to be more likely to have a loss
morale hazard
carelessness
Sharing
two or more individuals or businesses agree to pay a portion of any loss incurred by any
member of the group.
transfer
one party transfers the risk to another party. this is how insurance works. the insured
transfers the risk to the insurer. this cost is much less than what the cost of a loss would
be.
avoidance
eliminating a risk by not engaging in a certain activity. Someone who doesn't drive
avoids the risk of injuring someone in an automobile
retention
a risk management strategy that involves a party assuming the responsibility for a
certain level of risk or losses. A deductible would be an example of this
reduction
lessens the chance that a loss will occur
,An individual applied for auto insurance and obtained coverage. Who is the first
party in the contract
the insured
Wearing a seat belt in a car is an example of which method of managing risk?
Reduce
Tiffany leaves car unlocked because it is insured. This is an example of what kind
of hazard?
Morale
A flood is an example of a
peril
law of large numbers
The larger the group, the more accurate losses can be predicted. principle that makes
insurance possible
Elements of insurable risks: affordable
the premium for transferring the risk should be affordable for the average consumer
Elements of insurable risks: Accidental
the loss must have been caused due to chance. Intentional losses caused by insured
are not covered by insurance.
Elements of insurable risks: measurable
proof of loss must be established with numbers and dollar amounts, not just casual
references.
Elements of insurable risks: Non-Catastrophic
National or are disaster, such as floods, riots, wars, and earthquakes, will often have
coverage limitations in insurance policies. If the insurer were to cover these types of
risks, the risk could be detrimental to the insurer.
adverse selection
the tendency for higher-risk individuals to get and keep insurance as compared to
individuals that represent an average level risk.
reinsurance
like insurance for insurers.
stock insurer/ non-participating company
a business formed as a corporation and owned by its stock holders. Dividends would go
to stockholders not insureds. Dividends are never guaranteed because profits can never
be guaranteed.
certificate of authority
state license for an insurance company. When company is licensed it is called admitted
or authorized.
An insurance company incorporated in Minnesota conducting business in other
states is what?
Foreign company
What do insurance companies use to help predict how many losses will occur in
a group or class of individuals?
law of large numbers
CANHAM
Calculable
Affordable
, Non-Catastrophic
Homogeneous
Accidental
Measurable
Independent insurance agents
Individuals that sell insurance products of several companies and are independent
contractors, not employees of the insurer. They own the renewals of the policies they
sell.
Captive (exclusive) agents
Individuals that represent only one company. Captive agents are independent
contractors, not employees of the insurer. The insurance company owns the renewals
of the policies sold on their behalf.
General agents (GAs) or managing general agents (MGAs)
Individuals that hire, train, and supervise other agents within a specific geographical
area. Earn overriding commissions on the business produced by the agents they
manage.
Direct writing companies
Companies whose products are sold by employees, not independent contractors. This
type of producer may be compensated by a salary, commission, or both. The insurance
company owns the renewals of the policies sold on their behalf.
Fiduciary
Person with financial trust
Commingling
The illegal act of mixing personal funds with the insureds or insurers funds. Insureds
premiums must be kept separate from agents personal funds.
Express authority
Written in agent contract
Implied authority
Not written in agent contract but tasks agent must perform; implied that agent has this
authority. Example: handing out business cards.
Apparent Authority
Tasks the agent does that a reasonable person would assume as authority, based on
the agents actions and statements.
Agency is a relationship in which one person is authorized to represent and act
for another person or corporation. In insurance, the agent acts on behalf of
The principal
Which of the following types of advertising does not involve an agent and is
conducted through the mail, by advertisements in newspapers and magazines, on
tv and radio, or through the internet? Example: Jake from State Farm, Flo from
progressive
Direct response
Which of the following individuals represent only one insurance company?
A captive agent
Elements of a Legal Contract
CLOAC
CLOAC
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