South Carolina P&C Insurance Exam
Study Guide with 100% correct answers
2024
Abandonment - CORRECT ANSWER-the abdication of insured property into the
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of another, or into the possession of no one in particular
Absolute Liability - CORRECT ANSWER-Liability that arises from an extremely
dangerous situation. Often found in cases involving explosives. Also known as "strict"
liability. For example, you are absolutely liable if you keep a wild animal as a pet.
Accident - CORRECT ANSWER-an unplanned, unforseen event which occurs suddenly
and at a specific place
Actual Cash Value - CORRECT ANSWER-the required amount to pay damages for
property loss, which is calculated based on the property's current replacement value
minus depreciation
Additional Coverage - CORRECT ANSWER-a provision in an insurance policy that
allows for more coverage for a specific loss expense without an increase in premium
Additional Insureds - CORRECT ANSWER-individuals or business that are not named
as insured on the decleration page, butr are protected by the policy, usually in regard to
a specific interest
Adhesion - CORRECT ANSWER-A contract offered on a "take-it-or-leave-it" basis by an
insurer, in which the insured's only option is to accept or reject the contract. Any
ambiguities in the contract will be settled in favor of the insured.
Admitted Insurer - CORRECT ANSWER-An insurer to which a state insurance
department has granted a license to do business within that state.
Adverse Selection - CORRECT ANSWER-In general, the tendency for people with the
greatest probability of loss to be the ones most likely to purchase insurance.
Agent - CORRECT ANSWER-an individual who is licensed to sell, negotiate, or effect
insurance contracts on behalf of an insurer
Aggregate Limit - CORRECT ANSWER-the maximum amount an insurer will pay for all
covered losses during the covered policy period
Agreed Value - CORRECT ANSWER-A property policy with a provision agreed upon by
the insurer and insured as to the amount of insurance that represents a fair valuation for
the property at the time the insurance is written.
Aleatory - CORRECT ANSWER-A contract in which participating parties exchange
unequal amounts. the amount the insured will pay in premiums is unequal to the amount
the insurer will pay in the event of a loss.
Alien Insurer - CORRECT ANSWER-an insurance company that is incorporated outside
the U.S.
Apparent Authority - CORRECT ANSWER-The appearance or the assumption of
authority based on the actions, words, or deeds of the principal or because of
circumstances the principal created.
Appraisal - CORRECT ANSWER-an assesment of property to determine either the
correct amount of insurance to be written or the amount of loss to be paid
Arbitration - CORRECT ANSWER-A process, agreed to by parties to a dispute in lieu of
going to court, by which a neutral person or body makes a binding decision
Assignment - CORRECT ANSWER-the transfer of legal right or interest in an insurance
policy, in P&C ususally only valid with prior written consent of the insurer
Authorized Insurer - CORRECT ANSWER-An insurance company that has qualified and
received a Certificate of Authority from the Department of Insurance to transact
insurance in the state.
Auto - CORRECT ANSWER-a land motor vehicle, trailer or semi-trailer designed for use
on public roads
Avoidance - CORRECT ANSWER-A method of dealing with risk by deliberately keeping
away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane
crash, he/she might choose never to fly in a plane).
Bailee - CORRECT ANSWER-One who holds the personal property of another for a
specific purpose.
Beneficiary - CORRECT ANSWER-the one who recieves the proceeds from an
insurance policy
Binder - CORRECT ANSWER-A temporary insurance contract [Show Less]