General Insurance Flashcards
Risk Management Key Terms:
Increases the chance of risk occurring.
Hazard
Risk Management Key Terms:
The cause of loss, like a fire or hail.
Peril
Risk Management Key Terms:
Is loss or nothing, no chance of gain, only this type of risk is insurable.
Pure Risk
Risk Management Key Terms:
Lying on purpose, like lying on an insurance application.
Moral Hazard
Risk Management Key Terms:
Is a loss, lose or gain - like gambling.
Speculative Risk
Risk Management Key Terms:
The reduction or disappearance of value.
Loss
Risk Management Key Terms:
What are the two types of risks called?
- Pure Risk
- Speculative Risk
Risk Management Key Terms:
Are material and structural things you can see and touch.
Physical Hazard
Risk Management Key Terms:
The unit of measurement to determine rates for an insured based on how risky they are.
Exposure
Risk Management Key Terms:
The uncertainty or chance of loss occurring.
Risk
Risk Management Key Terms:
A sense of carelessness.
Morale Hazard
Methods of Handling Risk:
I am a STARR at ___________ ________.
S - hare
T - ransfer
A - voidance
R - etention
R - eduction
Handling Risk
Methods of Handling Risk:
When a company indemnifies (back or supports another insurance company) another.
Reinsurance
Methods of Handling Risk:
The more data you have to look at - the more predictable the losses will be.
The Law of Large Numbers
Types of Insurers:
Are incorporated associations named and modeled after one the earliest issuers of insurance, Lloyd’s of London, an internal marketplace for specialty insurance coverage.
Lloyd’s Associations
Types of Insurers:
Social organizations that engage in charitable and benevolent activities that provide primarily life insurance to their members. Usually a nonprofit.
Fraternal Insurers
(Fraternal Benefit Societies)
Types of Insurers:
Means the insurer is selling in this state, but they are incorporated in a different state.
Foreign Insurer
Types of Insurers:
Are owned by policyholders, issue participating policies, and dividends are not taxed.
Mutual Company
