Insurance Flashcards
(Review)
What is Pure Risk?
What is Speculative Risk?
What is Subjective Risk?
What is Objective Risk?
What is Particular Risk?
What is Fundamental Risk?
What is Non-Financial Risk?
What is Financial Risk?
What is the Law of Large Numbers?
What is a Peril?
What is a Hazard?
Insurable Risks are CHAD
not Catastrophic, Homogeneous exposure units, Accidental, and measurable and Determinable
Elements of a valid contract
Make an offer - Accept that offer
Legal Competency - Voidable if made with a minor
Legal Consideration - What is being exchanged
Lawful Purpose
Legal Contract requires COALL!
Competent parties, Offer and Acceptance, Legal Consideration and Lawful Purpose
A Void contract -
was never valid and thus never came into existence
A Voidable contract -
a valid contract - but one party could cancel. The other is bound. Example - Contract with Minor.
A warranty is:
A Representation is:
Concealment is:
Warranty: Promise made by the insurED to the insurER
Representation: Statements made by the insurED to insurER during application process.
Concealment: InsurED is silent about a fact
Characteristics of Insurance Contracts:
Adhesion, Aleatory, Unilateral, Conditional.
Estoppel -
A Party is denied assertion of a right to which they are otherwise entitled.
Parol Evidence Rule -
No Prior understandings may contradict the written contract.
6 Steps of Risk Management:
DieDie -
1. Determine the objectives
Identify the Risks
Evaluate the Identified Risks as to probability of occurrence
Determine Alternatives for managing risks (Select Most Appropriate)
Implement the Program
Evaluate, Monitor and Review
