CHAPTER 1. Property and Casualty Exam Texas (2022/2023) Rated A+ INSURANCE ✔✔The method of spreading the risk of a financial loss among a large number of people. When spreading the risk reduces the financial impact of an individual loss. INSURANCE COMPANY ✔✔entity that agrees to indemnify (make financially whole again) Insureds against covered losses PROPERTY ✔✔Various types of insurance designed to insure property from financial loss. D.H.C.I.O.C 1.Dwelling 2.Homeowners 3.Commerical Property 4.Inland marine 5.Ocean marine 6.Crime Actuaries ✔✔1.insurance statistician: a statistician who calculates insurance premiums, risks, dividends, and annuity rates CASULTY INSURANCE ✔✔Protects you against liabilty for BODILY INJURY (BI) and PROPERTY DAMAGE (PD) LIABILITY OR CASUALTY COVERAGE ✔✔Will pay for accidental damage you cause to another person or their property. There are three parties to Liability insurance contract. 1.you 2.your insurance company 3.the injured party PERSONAL LINES INSURANCE ✔✔Property and casualty insurance for an individual. Policies include Property and Casualty coverages. COMMERCIAL LINES INSURANCE ✔✔Refers to property and casualty insurance to cover a BUSINESS as opposed to personal lines PURCHASING INSURANCE ✔✔The money you pay in exchange for insurance coverage is known as the CONSIDERATION. It is also the PREMIUM, and the statements you make in the application along with the payment of the initial premium are part of the consideration. DEDUCTIBLE ✔✔Portion of covered loss that is not paid by the insurance company.The company will pay for the remaining portion up to the policy limits. The higher the deductible, the lower premium. BINDER ✔✔An ORAL or WRITTEN agreement that provides TEMPORARY evidence of insurance until a policy can be issued. It does not guarantee that a policy will be issued, but it is temporary until a contract can be underwritten from home or office. Insured on a policy ✔✔Person or entity that is listed first on the declarations page is referred to as the first named insured. The first named insured is the primary and holds the highest rank and has broader rights and obligations under the contract. RISK ✔✔Possibility or Uncertainty of loss. It is not actual loss. It is the possibility (risk) that an accident may occur. SPECULATIVE RISK VS PURE RISK ✔✔SPECULATIVE RISK offers the chance of loss as well as the oppurtunity for gain. PURE RISK offers only the chance of loss no gain. Only PURE RISKS are insurable.
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