General Insurance #2

Question 1

uncertainty or chance of a loss occurring

Answer 1

Risk

Question 2

what are the two types of risk?

Answer 2

pure and speculative risk

Question 3

situations that can only result in loss or no change

Answer 3

Pure Risk

Question 4

the opportunity for either loss or gain, ie gambling

Answer 4

Speculative Risk

Question 5

conditions or situations that increase the probability of an insured loss occurring

Answer 5

Hazard

Question 6

What are the 3 types of hazards?

Answer 6

Physical, Moral and Morale

Question 7

causes of loss

Answer 7

Peril

Question 8

the reduction, decrease or disappearance of value of the person or property insured in a policy, caused by a named peril

Answer 8

Loss

Question 9

a unit of measurement used to determine rates

Answer 9

Exposure

Question 10

eliminating exposure to a loss is what kind of risk?

Answer 10

Avoidance

Question 11

the planned assumption of a risk by an insured through the use of deductibles, co-payments, or self insurance

Answer 11

Retention

Question 12

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.

Answer 12

Sharing

Question 13

To lessen the possibility or severity of a loss

Answer 13

Reduction

Question 14

The most effective way to handle risk, ie insurance

Answer 14

Transfer