Risk Management Flashcards
1
Q
Risk Aviodance
A
Insurers’ practice of denying insurance applications that they believe would involve an inordinate amount of risk.
2
Q
Risk Management
A
Measures taken by an insurance company to ensure that their exposure is not too high and to control the effect of a loss; for example, an insurer might charge higher premiums to drivers who have received speeding tickets.
3
Q
Risk Reduction
A
An insurer practices risk reduction when it takes precautions in order to reduce its exposure; for example, requiring that all homes insured by homeowners policy have fire alarms installed.
4
Q
Risk Retention
A
An insurer practices risk retention when it chooses to insure a risk instead of denying coverage.
