Insurance

Question 1

What is Pure Risk?

Question 2

What is Speculative Risk?

Question 3

What is Subjective Risk?

Question 4

What is Objective Risk?

Question 5

What is Particular Risk?

Question 5

What is Fundamental Risk?

Question 6

What is Non-Financial Risk?

Question 7

What is Financial Risk?

Question 8

What is the Law of Large Numbers?

Question 9

What is a Peril?

Question 10

What is a Hazard?

Question 11

Insurable Risks are CHAD

Answer 11

not Catastrophic, Homogeneous exposure units, Accidental, and measurable and Determinable

Question 12

Elements of a valid contract

Answer 12

Make an offer - Accept that offer
Legal Competency - Voidable if made with a minor
Legal Consideration - What is being exchanged
Lawful Purpose

Question 13

Legal Contract requires COALL!

Answer 13

Competent parties, Offer and Acceptance, Legal Consideration and Lawful Purpose

Question 14

A Void contract -

Answer 14

was never valid and thus never came into existence

Question 15

A Voidable contract -

Answer 15

a valid contract - but one party could cancel. The other is bound. Example - Contract with Minor.

Question 16

A warranty is:
A Representation is:
Concealment is:

Answer 16

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

Question 17

Characteristics of Insurance Contracts:

Answer 17

Adhesion, Aleatory, Unilateral, Conditional.

Question 18

Estoppel -

Answer 18

A Party is denied assertion of a right to which they are otherwise entitled.

Question 19

Parol Evidence Rule -

Answer 19

No Prior understandings may contradict the written contract.

Question 20

6 Steps of Risk Management:

Answer 20

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