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NEW YORK ADJUSTER EXAM NEWEST (3
LATEST VERSIONS) COMPLETE 300
QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |AL READY
GRADED A
Insurance
Correct answer: A method of handling pure risk, by spreading it
over a large number of similar individuals.
Law of Large Numbers
Correct answer: Insurers can calculate their probable losses and
establish premium rates that are accurate enough to cover claims, pay operating expenses, and make a profit.
Principle of Indemnity
Correct answer: An insured who suffered a loss, should only be
restored to the approximate financial condition that existed prior to the loss, no better and no worse.
Insurance Interest
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Correct answer: A person must have a lawful, substantial, and
economic interest in the life, health, property, or object being covered under the insurance contract.
Risk
Correct answer: The possibility that a loss might occur and is the
reason that people buy insurance.
Pure Risk
Correct answer: A situation where there is only the possibility of
a loss, there is never the possibility of a profit or financial gain.
Speculative Risk
Correct answer: A situation where either a profit or loss is
possible.
Peril
Correct answer: Actual cause of a loss, for example, fire,
windstorm or hail.
Hazard
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Correct answer: A condition that increases the possibility, of
severity of a loss.
Moral Hazard
Correct answer: A condition that increases the probability that a
person will intentionally cause, create, or inflate a loss.
Morale Hazard
Correct answer: A condition of inattention to, or disregard for
one's own life, health, property, or behavior, that increases the frequency or severity of a loss.
Risk Avoidance
Correct answer: Avoiding the hazard.
Transfer of Risk
Correct answer: A person can transfer their risk to an insurance
company, in exchange for paying a premium.
Contract
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Correct answer: An agreement between two or more parties that
is enforceable by law.
C.L.O.C.
Correct answer: Competent Parties/Capacity to Contract; Legal
Purpose; Offer and Acceptance; Consideration
D.I.C.E.
Correct answer: Declarations; Insuring Agreement; Conditions;
Exclusions
Representation
Correct answer: Statements made on an application for
insurance that are true to the applicant's best knowledge and belief.
Misrepresentation
Correct answer: Untrue statements made by the insured or
insurer, usually at the time when an application is made.
Fraud
