Download State Farm Insurance 2024 Exam Review: Mastering Insurance Concepts and more Exams Credit and Risk Management in PDF only on Docsity!
STATE FARM INSURANCE 2024
Exam Review Questions and
Answers 100% Pass
What transfers the risk of loss from an individual or business entity to an insurance company - Answer>> Insurance The uncertainty of a risk or loss occurring - Answer>> risk A risk that can only result in a loss or no change with no opportunity for financial gain - Answer>> pure risk A risk that allows an opportunity for loss or gain (such as gambling) - Answer>> speculative risk CONDITIONS or SITUATIONS that increase the chance of a loss occurring (such as lifestyle, health conditions, scuba diving, sky diving) - Answer>> hazards The CAUSES of loss...(like fire, explosion, windstorm, flood, theft, collision) - Answer>> perils insurance for an untimely death (died from heart attack) - Answer>> life insurance insurance for sickness or accidental injury (got cancer or broken bones) - Answer>> health insurance insurance for the loss of physical property (wind storm damaged the house) - Answer>> property insurance
insurance for the loss or damage of property and resulting liabilities (guy fell off the ladder while working on the roof) - Answer>> casualty insurance the reduction, decrease or disappearance of value from the person or property insured. - Answer>> loss a method used to transfer the loss from the person or property to the insurance company - Answer>> insurance A unit of measurement used for determining rates charged for certain coverages (insurances) - Answer>> exposure you decide not to fly in an airplane because it's too dangerous so you AVOID it. This is called risk - Answer>> avoidance to reduce expenses and cash flow, increase control of claim settlements, and to fund losses that can't be insured are called risk - Answer>> retention dealing with risk for a group of individuals that have the same type of exposure to loss is called risk - Answer>> sharing installing smoke detectors, having annual physicals, and lifestyle changes all reduce the chance of loss. This is called risk - Answer>> reduction The most effective way to handle risk so a loss becomes the responsibility of the insurance company is called (pass the responsibility to someone else) - Answer>> transfer Losses due to chance, that are definite and measurable, that are predictable, and that are not catastrophic are called ELEMENTS OF INSURABLE - Answer>> risks
Insurers that are incorporated in the USA states are called - Answer>> domestic Insurers that are incorporated in the USA but in different TERRITORIES are called - Answer>> foreign Insurers that are incorporated OUTSIDE the USA are called - Answer>> alien AM Best, Fitch, Standard and Poor's, Moody's, and Weiss are considered Independent Rating Services. They evaluate an insurance companies - Answer>> financial status Independent agencies, exclusive agencies, general, managerial, and direct response, are all types of - Answer>> marketing distributions systems Insurance for Insurers is called - Answer>> reinsurance An individual that is licensed to sell or solicit insurance contracts for the insurance company are called - Answer>> producers The authority a principal(owner) of an insurance company gives to an agent that is written in a contract is called - Answer>> express The authority a principal(owner) of an insurance company gives to an agent that is ASSUMED is called - Answer>> implied The assumption of authority is called - Answer>> apparent Someone in the position of holding the ultimate trust for someone else is called a - Answer>> fiduciary
Insurance CODE OF ETHICS (professionalism) is also called - Answer>> Market Conduct An agreement between two or more parties enforceable by law is called a - Answer>> contract When an offer is made to someone (to buy a car) and the offer is accepted by the purchaser, it is called - Answer>> offer and acceptance Monies, services, personal items used as payment in a contract are called - Answer>> consideration People engaging in contracts that are of legal age, not mentally impaired, not under the influence of substances, or other people are considered - Answer>> competent A contract must be used for (not illegal) - Answer>> legal purposes In insurance, when an offer is made and is accepted it is called a - Answer>> contract of adhesion The premium paid monthly by the insured, is less than the amount that will be paid by the insurance company if a loss occurs. This is called (Aleaha's Story) ex: john pays 100 a month for life insurance, but dies suddenly and collects $50,000. - Answer>> aleatory contract Most insurance contracts are done between persons and the company. This is considered a personal - Answer>> contract
A legal process that can STOP a party from re-asserting a right or a privalege that has been waived, is called - Answer>> estoppel
