General Insurance #2 Flashcards
uncertainty or chance of a loss occurring
Risk
what are the two types of risk?
pure and speculative risk
situations that can only result in loss or no change
Pure Risk
the opportunity for either loss or gain, ie gambling
Speculative Risk
conditions or situations that increase the probability of an insured loss occurring
Hazard
What are the 3 types of hazards?
Physical, Moral and Morale
causes of loss
Peril
the reduction, decrease or disappearance of value of the person or property insured in a policy, caused by a named peril
Loss
a unit of measurement used to determine rates
Exposure
eliminating exposure to a loss is what kind of risk?
Avoidance
the planned assumption of a risk by an insured through the use of deductibles, co-payments, or self insurance
Retention
the method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss. A reciprocal insurance exchange.
Sharing
To lessen the possibility or severity of a loss
Reduction
The most effective way to handle risk, ie insurance
Transfer