Property & Casualty Nevada License

By redistributing the financial consequences of individual losses to all persons insured

Is the transfer of risk or loss from an individual or business entity to an insurance company.

The "law of large numbers"is the principle states that the larger the number of people with similar exposure to loss, the more predictable the actual losses will be.

Must have an insurable interest and must exist at the time of the loss

Is the uncertainty or chance of a loss occurring

PURE refers to situations that can only result in a loss or no change, this is the only type accepted by insurance companiesSPECULATIVE involves the opportunity for either loss or gain, this type of risk is not insurable

Are conditions of situations that increase the probability of loss

PHYSICAL, are those arising from the material, structural or operational features of the risk, apart from the person owning or managing itMORAL refer to those applicants who lie on an insurance application or in the past have submitted fraudulent claims against an insurerMORALE refers to the increase in the hazard arising from the insured's indifference to loss (because of the existence of insurance)

Is an specific cause of loss. Peril insured against in property policies may include, fire, wind, hail and explotions

NAMED PERIL is used to describe the breadth of coverage provided under an insurance policy form that list specific covered PerilsOPEN PERIL is used to describe the breadth of coverage that insures against any risk of loss that is not specifically excluded

Is DIRECT, however INDIRECT losses that are related to the direct loss, and Insurance coverage to protect against these indirect losses may be added to the property insurance policies.

DIRECT means direct, physical damage to buildings and /or personal property, also includes damage where the insured peril was the proximate cause of loss. INDIRECT or consequential losses, are the ones considered as a result of direct loss. For example, the time it take to repair or replace damaged property, etc

Current replacement cost - depreciation = ACVthis method reinforces the principle of indemnity because it recognizes the reduction of value of property as it ages and become subject to wear, tear and obsolescence

The cost to replace damaged property with like kind and quality at today prices. This may provide the insured with a settlement in excess of the property's actual cash value

Is the method of valuing a loss upon the amount a willing buyer would pay to a willing seller for a property before the loss (it takes in consideration the value of the land and location )