Unit 3 checkpoint exam

Which are the factors that determine premium rates?

Loss Reserves, cost of handling claims, operating expenses, and profits

What is it called if insurance companies insure different amounts of the same policy but contribute the same amount towards paying a claim

Contribution by equal shares

The amount o money that the insurance company makes by providing insurance for a designated period is called

The earned premium

The penalty for early cancellation of an insurance policy by the insured is applied on

A short-rated basis

A car speeds through the red light at an intersection and strikes the insured’s car. The insured’s car is totaled. After his insurer paid for the total loss of his car, his insurance company brings suit against the negligent party to recover the amount paid for the loss. This is known as …

subrogation

Ther person listed on the declarations page when there are multiple people insured in a policy, and may have higher level duties or rights in the policy, is known as

The first-named insured

Which of the following is NOT part of the underwriting process

A. Accepting or rejecting applications

B. evaluating premium expense loads

C. Assessing risks and exposures

D. Determining premium and coverage amounts

B

The declarations section of a policy contains all of the following information except:

A. current address

B. covered perils

C. Policy Deductibles

D. Name of the insured

B - perils are under the insuring agreement

Randall has an insurance policy that states his policy began at 10AM on January 17th of the current year and ends at 12:01 AM on January 17th of the following year. These details are known as

the policy period

What part of the policy states the rules of conduct, duties, and obligations that are required for coverage

the conditions section

All of the following are included in the duties after loss provision EXXCEPT

A. provide detailed proof of loss

B. notify insurer or agent of loss

C. salvage damaged property

D. make property available for inspection

C

A promise to pay and perils covered is described in

the insuring agreement

Glenn’s insurance policy was cancelled by the insurer on the effective date. This is callled

Flat cancellation

What is true regarding deductible and premium

The lower the deductible, the higher the premium

Casualty Insurance

Protects an insured from legal liability arising from injury or damage to the property of others

Which condition states that a policy may not be transferred to anyone else without the written consent of the insurer

The assignment condition

Brady and his wife Julie had an insurance policy that was cancelled by the insurer before the expiration date. They will receive a portion of their premium back on a

Prorated basis

An existing auto insurance customer calls your office and says she has bought a car and needs immediate coverage. What can you give the customer to provide immediate coverage in this situation?

A binder

The provision that states where a loss must occur for it to be covered is known as the

the policy territory provision

When does the insured have the power to cancel their policy

At any time, but they will not receive the entire unearned premium back

Natalie has an insurance policy that specifically does not cover flood damage. This information can be found in which section of the policy

Exclusions

Do you have an insurable interest in a piece of property you sold

No, you only have insurable interest in items you currently have a financial stake in

According to the Gramm-Leach Bliley Act, anyone who has an ongoing relationship with a financial institution is considered to be

A customer