Study 1 Trivia Time Flashcards
RIsk for 100
A situation that is usually not insurable bc the possibility of either a financial loss or financial gain exists is known as _____
a) personal risk
b) hazard risk
c) pure risk
d) speculative risk
Speculative risk
Risk for 200
What is a liability risk?
a) A characteristic of a risk that makes that chance of loss more likely
b) The chance of loss or profit from a business venture
c) The risk of being found responsible for causing damage to another person and being obligated to pay damages to that person
d) The risk of the individual being required to pay the cost of repairing physical damage to their own property
c)
Liability risk entails loss arising from an individual’s obligation to pay damages based on the individual’s negligent act
Risk 300
Identify the three broad classes of insurance
a) Personal lines, commercial lines, special risks
b) Personal lines, commercial lines, business risks
c) Personal risks, property risks, liability risks
d) Pure risk, speculative risk, insurable risk
a) Personal lines, commercial lines, special risks
Personal, property, and liability risks are grouped into 3 broad classes of insurance: personal lines, commercial lines, and special risks
Risk 400
Joshua sustains an injury from an accident and is unable to work for three weeks. Joshua’s loss of income from being off work is an example of which type of risk?
a) Liability risk
b) Personal risk
c) Speculative risk
d) Moral risk
b) Personal risk
Joshua’s situation is an example of personal risk that is insurable. It involves loss of income as a result of physical disability from an accident.
Perils and Hazards 100
Insurance offers coverage against loss arising from the occurrence of a(n)
a) Insured peril
b) Hazard
c) Speculative risk
d) Excluded peril
a) Insured peril
Insurance is provided against loss arising from the occurrence of an insured peril. Excluded coverages insurance covers loss by additional perils.
Perils and Hazards 200
What is a physical hazards?
a) A condition attributed to the human element of risk that leads to a hazard
b) An event that may prevent a loss
c) A condition that decreases the likelihood of a loss
d) A physical condition or characteristics of the insured object that leads to a hazard
d) A physical condition or characteristics of the insured object that leads to a hazard
Physical hazard is a hazard arising from the physical condition or characteristics of the insured object.
Perils and Hazards 300
Which of the following is an example of a moral hazard?
a) An accountant w/a fraud record
b) A tenant w/excellent rent payment record
c) A business w/a good credit rating
d) A floor manager who implemented a health and safety plan
a) An accountant w/a fraud record
An accountant w/a fraud record is an example of a moral hazard bc it represents an attitude of dishonesty and failure to uphold the principle of good faith
Perils and Hazards 400 Burglary, robbery, and theft are examples of which of the following? a) Hazards b) Liability risks c) Perils d) Spectulative risks
c) Perils
Burglary, robbery, theft, holdup, dishonesty, embezzlement and forgery are perils defined in burglary and fidelity insurance, also known as crime insurance
Proximate cause 100
What is a proximate case of loss?
a) The immediate and effective cause of loss without which the loss would not occur
b) The event that prevents the recovery for the loss
c) A part of the chain of events leading to a loss, but which did not cause the loss
d) The last link in the chain of events leading to a loss, but which did not directly cause the loss
a) The immediate and effective cause of loss without which the loss would not occur
Proximate cause is the immediate and effective cause of loss that leads naturally and directly to the loss
Proximate cause 200
What is a remote cause of a loss?
a) A part of the chain of events leading to a loss, but which did not cause the loss
b) The last link in a chain of events leading to a loss
c) The event that determines the recovery for the loss
d) A direct cause of loss w/out which the loss would not occur
a) A part of the chain of events leading to a loss, but which did not cause the loss
Remote cause is part of the chain of events leading to a loss, but is not the immediate cause. It is not the proximate cause.
Proximate cause 300
What is an immediate cause of a loss?
a) A direct cause of loss w/out which the loss would not occur
b) A part of the chain of events leading to a loss, but which did not cause the loss
c) The last link in a chain of events leading to a loss
d) The event that determines the recovery for the loss
c) The last link in a chain of events leading to a loss
Immediate cause is not the proximate cause of loss but is the last link in a chan of events leading to a loss
Proximate cause 400 A torpedo hits a ship, creating a hole in its hull. As the ship sinks, a bad storm arrives and creates big ocean waves. These waves make the ship take on water, which causes it to sink faster than ti would otherwise. Identify the proximate cause of the ship sinking. a) The ship b) The storm c) The waves d) The torpedo
d) The torpedo
The torpedo is the proximate cause bc it causes the ship to start sinking: w/out the hole in its hull caused by the torpedo, the ship would sink
