Insurance & Risk Management Flashcards
Risk Management Model
identify hazards, assess and prioritize risks, choose control measures, implement controls, monitor and review results
Enterprise Risk Management/ERM
state goal, identify risks, evaluate risks, treatrisks, monitor and review results, communicate results
Risk Map
a data visualization tool for communicating specific risks an organization faces
Risk Profiling
the quantification of an investor’s overall risk tolerance
Risk Enhancement
a risk response strategy aimed at increasing the probability of a positive risk occurrence
Risk Acceptance
occurs when a business or individual acknowledges that the potential loss from a risk is not great enough to warrant spending money to avoid it
Risk Transference
handing the risk off to a willing third party
Risk Avoidance
seeks to avoid compromising events entirely
Risk Reduction
reduce the frequency or severity of losses
Risk Retention
the method secured for all other types of risks, that is, unforeseen or foreseen but not significant
Pure Risk
risks that are beyond human control and result in a loss or no loss- there is no possibility of financial gain (classified as personal, property, or legal)
Risk Financing
the determination of how an organization will pay for loss events in the most effective and least costly way possible
Risk Management
the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities
Auto Liability Coverage
mandatory in most states; Bodily injury liability may help pay for costs related to another person’s injuries if you cause an accident; Property damage liability may help pay for damage you cause to another person’s property while driving
Uninsured and Underinsured Motorist Coverage
helps pay for costs incurred by another uninsured or underinsured driver; required in some states
(Auto) Collision Coverage
helps cover damages to car or replace car if If you’re involved in an accident with another vehicle, or if you hit an object such as a fence
(Auto) Comprehensive Coverage
helps cover costs or replace car if it is damaged by a covered peril other than collisions (theft, fire, vandalism)
(Auto) Medical Payments Coverage
helps cover costs if If you, your passengers or family members who are driving the insured vehicle are injured in an accident
(Auto) Personal Injury Protection
helps pay for medical and other expenses incurred due to your injury such as childcare expenses or lost income
(Auto) Gap Coverage
helps pay off your auto loan if your car is totaled or stolen)
Renter’s Insurance
covers losses from theft, water backup damage, certain natural disasters, bodily injuries and more in a rented property
Worker’s Compensation
paid by employer who cannot require the employee to contribute to the cost of compensation
Disability Insurance
replaces some of a working person’s income when a disability (illness or injury) prevents them from working; It does not cover medical care or long-term care services
Long-Term Care Insurance
covers long-term care costs generally not covered by health insurance, Medicare, or Medicaid
Co-Payments
a set fee you pay for a doctor visit or a prescription; helps protect against moral hazard
Exclusions
types of damage that are not covered by your insurance
Underwriting
sign and accept liability under an insurance policy, thus guaranteeing payment in case loss or damage occurs
Global Insurance Program
a multinational insurance program with a coverage territory encompassing the entire world, including the country in which the insured is domiciled
EPA/Environmental Protection Agency
responsible for the protection of human health and the environment
NFPA/National Fire Protection Agency
organization devoted to eliminating death, injury, property, and economic loss due to fire, electrical, and related hazards
COBRA/Consolidated Omnibus Budget Reconciliation Act
gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time (18 or 36 months) under certain circumstances (“qualifying acts”)
Insurance Cycle/Underwriting Cycle
starts with many competitors and low premiums and then after a surge in claims and insurance company insolvencies, competition declines, and premiums go up
Hard Market
increased premium costs for insureds, stricter underwriting criteria, less capacity, restricted terms of coverage and less competition among insurance carriers for new business
Soft Market
low premiums, high limits, broader coverages, and a more competitive landscape with high availability of coverage
Insurance Agent
represents one or multiple insurance companies and sells their policies, usually for a commission; licenced professionals
Insurance Broker
an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation; licenced professional
Insurance Agent Vs. Broker
Insurance agents represent the insurance provider that employs them and help sell policies from that single provider. Insurance brokers represent the consumers who use them and can help them shop for policies from multiple providers
Insurance Actuary
uses mathematics, statistics and financial theory to analyze the financial cost of risks
Claims Representative
fulfills the promise to pay the insured or to pay on behalf of the insured by handling a claim when a loss occurs
Loss Control Specialist
inspects businesses on behalf of insurance companies and provides loss prevention recommendations to reduce the frequency and severity of losses; performs inspections and prepares reports for insurance underwriting purposes
Principle of Subrogation
allows your insurer to recover the costs associated with a claim, such as medical bills, repairs costs, and your deductible, from the at-fault party’s
Rider
an addition to an existing life insurance policy that allows you to add specific insurance products to your basic coverage
Presumptive Disability
where a loss is presumed to be total and permanent due to loss of sight, hearing, speech or loss of two limbs
Health Insurance Portability and Accountability Act (HIPAA)
Required the creation of national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge
