1D-1F Flashcards
The potential for financial loss; being exposed or open to damage. An insured item. These are both definitions of what?
Risk
A _________ risk is one undertaken without any certainty of gain or certainty of loss-it could go
either way.
Speculative
____ risk can be insured. It is a condition in which where there is a chance of either loss or no
loss, but no chance of gain for the insured.
Pure
What is exposure?
Exposure is openness to loss or damage.
A _______ is any circumstance that increases the chance of loss. They can be physical, moral,
or morale.
Hazard
The actual cause of loss is what?
Peril
- Reduction in value of an insured item
- Financial loss due to an occurrence or accident
- for insurers: the amount paid out in a claim settlement
These are three examples of what?
Loss
Adequate premiums, definable risk, unexpected losses, substantial losses, exclusions, law of large numbers are the six qualifications of what?
Insurable Risk
The larger number of units statistically reduces the potential for a significant variation from the
normal rate of claims defines what?
The Law of Large Numbers
_______ ________ refers to when someone
decides to buy insurance based on his own knowledge of his likelihood to file a claim, typically
because of information about the risk that the insurer is unaware of or unable to discriminate
against.
Adverse Selection
Having a plan for how to deal with possible future losses is called?
Risk Management
What are the four risk management techniques?
- Risk Avoidance
- Risk Reduction
3 Risk Transference
4 Risk Retention
Define Insurer
The company or organization offering financial protection
Define Insured
The person or organization that pays premiums for financial protection.
Define First Named Insured
The first person or organization listed on the declarations page.
The dates during which the policy period is in effect is know as?
Policy Period
A ______ is a statement providing immediate insurance coverage for a short period.
Binder
What does the term Blanket Insurance refer to?
Blanket Insurance refers to a single policy that provides more than one kind of coverage, or covers
multiple types of property at multiple locations.
_________, found on the conditions page, are guarantees that certain conditions in the contract
will be met.
Warranties
What is the difference between Concealment and Misrepresentation?
Concealment - is deliberately withholding information.
Misrepresentation - is statin a falsehood
A Waiver is a voluntary surrender
of a right, claim, or privilege. What are two types of waivers?
Express and Implied
__________ is a legal principle which prevents a party from contradicting what had been established
as the truth.
Estoppel
A policy can be reformed for what?
Mutual mistake of fact and/or fraud
