Risk and Insurance Flashcards
1
Q
Which features must be present for a risk to be insured
A
Event insured must be fortuitous
must be insurable interest
must be homogeneous exposures
insuring risk must not be against public policy
2
Q
what is insurable interest?
A
legally recognised relationship between the insured and the financial loss which the insured suffers on the happening of an insured event
3
Q
which types of risk cannot be insured?
A
non financial
speculative
fundamental risks
4
Q
3 main components of risk
A
uncertainty
level of risk
peril and hazard
5
Q
define peril
A
a peril is that which gives rise to a loss
6
Q
define hazard
A
a hazard is that which influences the operation of the peril
7
Q
Primary function of insurance
A
act as a risk transfer mechanism
8
Q
concept of self insurance
A
carries risk itself
