Property and Casualty Chapter 1

A chance of loss is called ___?

Risk

Gambling is an example of ____.

Speculative risk

Insurance will only cover ____ risks.

Pure

The transfer of risk from an individual or business to a professional risk taking company is called ____.

Insurance

Loss is defined as _____ hurt.

Financial

Having your car stolen is an example of a ____ loss, whereas not having the use of your stolen car would be referred to as an _____ or consequential loss.

Direct and Indirect

Insurance that covers your stuff is called ____ insurance.

Property

Insurance that protects you when your stuff gets you in trouble with The Other Guy is called ____ or _____ insurance.

liability or casualty

Property insurance policies are ____ party contracts, whereas liability policies are ____ party contracts.

Two party contracts, Third party contracts

In insurance lingo, if you have a financial interest in a piece of property, you are said to have an _____.

Insurable interest

When an insurance company pays a policy owner on a claim, the company is said to have _____ the insured.

Indemnified

The stated maximum that an insurance company will pay on a claim is called the _____.

Limit of liability

Losses that are specifically NOT covered by an insurance policy are called _____.

Exclusions

Iron rusts. Cheese turns moldy. In insurance lingo, these latent defects are called ____.

Inherent vice.

In proportion, share or ratio is called ____.

Pro rata.

The promise in your P and C policy, which states that modifications that make the contract more generous and put into effect during the policy period will be automatic enhancements to your policy, is found in the _____ clause.

Liberalization

The transfer of ownership of an insurance policy from one individual to another is called _____.

Assignment

The refusal of an insurer to continue insurance coverage beyond the end of the policy period is called ____.

Non-renewal.

The termination of an insurance policy during the policy period by either the insurance company or the insured is called _____.

Cancellation

If the insurance company cancels a policy, then the customer is entitled to a ____ refund of premium

Pro rata

If an insured cancels his/her commercial policy, then they are only entitled to a ____ refund of premium.

Short rate

In addition to the policy, written proof of insurance coverage is provided by a _____.

Certificate of insurance

A written modification or addition to a policy of insurance is called an ______.

Endorsement

In personal lines insurance policies, the individual(s) who have the rights and duties under the policy are called the _____.

Named Insured(s)

In commercial lines the key contact person who represents the Named Insured(s) is called the ______.

First Named Insured

An ____ is a sudden, unforeseen and unintended event that happens at a known place and known time.

Accident

A broader definition of accident that also covers losses that occur over time as the result of continuous and repeated exposure to injurious conditions is called an ______.

Occurrence