General Concepts
This is the transfer of risk from an individual to an insurance company.
What is insurance?
This section of a policy lists the insured, coverage amounts, and term.
What is the declarations page?
This type of loss occurs when property is completely destroyed.
What is a total loss?
This type of liability arises from intentional wrongful acts.
What is tort liability?
This state agency regulates insurance companies and producers in Arizona.
What is the Arizona Department of Insurance and Financial Institutions (DIFI)?
Daily Double. This principle states that the insured should not profit from a loss.
What is indemnity?
This part outlines what is covered and under what conditions.
What are insuring agreements?
This valuation method pays the cost to replace property without depreciation.
What is replacement cost?
Liability imposed regardless of fault is called this.
What is strict liability?
This must be completed before an insurance producer can sell insurance.
What is licensing?
This describes an uncertain event that may cause loss.
What is risk?
These eliminate or limit coverage under a policy.
What are exclusions?
This policy covers only the perils specifically listed.
What is a named peril policy?
This covers liability arising from business operations or premises.
What is general liability insurance?
In Arizona, this is required to keep a license active after issuance.
What is continuing education(CE)?
This term refers to factors that increase the chance of loss.
What are hazards?
These are specific requirements the insured must follow to keep coverage valid.
What are conditions?
This type of policy covers all risks except those specifically excluded.
What is an open peril (all-risk) policy?
This provides additional liability limits above underlying policies.
What is umbrella insurance?
Daily Double. Misrepresenting policy terms to induce a sale is considered this unfair practice.
What is misrepresentation?
This concept spreads risk across a large group to reduce financial impact.
What is risk pooling?
These modify the original terms of the insurance contract.
What are endorsements?
This clause requires the insured to carry a certain percentage of insurance relative to value.
What is the coinsurance clause?
This term refers to the insurer’s right to pursue recovery from a third party after paying a claim.
What is subrogation?
This involves offering something of value not stated in the contract as an inducement to buy insurance.
What is rebating?