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Insurance Exam

Terms in this set (206)

Absolute Liability
A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights
Abandonment
The abdication of insured property into the hands of another, or into the possession of no one in particular
Accident
An unplanned, unforeseen event which occurs suddenly and at a specific place
Actual cash value
The required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation
Additional coverage
A provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium
Additional insureds
Individuals or business that are not named as insured on the dec page, but are protected by the policy, usually in regard to a specific interest.
Adhesion
A contract offered on a "take it or leave it" basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
Admitted insurer
An insurance company authorized and licensed to transact business in a particular state.
Adverse selection
The tendency of risks with higher levels or ability of loss to purchase and maintain insurance more often that the risks who present lower probability
Agent
An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer
Aggregate limit
The maximum limit of coverage available under a liability policy during a policy year regardless of the number of claims that may be made or the number of accidents that may occur
Agreed value
A property policy with a provision agreed upon by e insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written
Aleatory
A contract in which th participating parties agree to exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss
Alien insurer
An insurance company that is incorporated outside of the United States
Apparent authority
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created
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