Chapter 4. Insurance Transactions

Terms you'll need to understand:

  • Insurance application

  • Binder

  • Adverse selection

  • Certificate of insurance

  • Misrepresentation

  • Concealment

  • Fraud

  • Warranty

  • Waiver

  • Estoppel

Concepts you'll need to master:

  • Underwriting

  • Regular consumer report

  • Investigative consumer report

  • Judgment rating

  • Manual or class rating

  • Merit rating

  • Experience rating

  • Policy period

  • Unearned premium

  • Short rate cancellation

  • Pro rata cancellation

  • Flat cancellation

A number of steps must be taken before an insurance transaction can be completed. These include making an application for insurance, underwriting the risk, and including all the steps required for forming a valid contract.

Applications

Before an insurance policy can be issued, the prospective insured must apply to ...

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