Test 1 Flashcards
When the probabilities of future outcomes cannot be estimated reliably, the outcomes are described as?
Uncertainty
If, over time, the chance for a loss occurring is increasing significantly what type of risk is this and what will happen to insurance
Dynamic, and the price of insurance will become less available and more expensive.
Applies to a limited number of exposures.
Particular Risk
Comprised of Mental Anguish that is not easily measurable and quantifiable.
Subjective Risk
Private insurance companies generally won’t be offer insurance when risks are?
Fundamental and Uncertain
Insurance Companies prefer risks that are?
Particular, static, objective, and pure.
The last action of events that causes a loss?
Peril
Hazards are defined as?
Adverbs and Adjectives
A Hazard in which a person intentionally wishes to purposely cause a loss because of dishonesty or some other character defect.
Moral Hazard
Moral Hazard Examples
Arson, Padding Insurance Claims, Faking Whiplash etc.
What happened in the 1950s to change risk managers from insurance buyers to actual risk managers?
An expanding array of statistical and quantitative tools available for making better decisions about risk were developed.
What are the four basic risk management techniques?
Avoidance, Loss Control (Prevention, Reduction), Retention, Transfer.
Generally, if risks are to be totally retained,
Losses must not be catastrophic and no other methods of risk management are available.
Loss control actives occur
Before, After, and During a Peril.
Insurance is a subset of?
Transfer
Insurance is most widely used when?
Frequency is Low and Severity is high.
A Private violation of another’s rights?
Tort
People who have a legitimate purpose on someone else’s property but are not specifically invited are called
Licensees
If both parties are negligent and neither can collect this is an example of
Contributory Negligence
A person who signs a hold harmless agreement prior to bungee jumping provides the bungee operator with which defense if the jumper is injured?
Assumption of Risk
Through a contract, it’s possible to assume the negligence of another. What is the name for this assumed liability?
Vicarious Liability
Jewelry, CD’s, Animals, Machinery and Inventory are all examples of
Personal Property
Which of the following definitions of pre-mature death is most widely used by financial planners?
Death that leaves unfulfilled business and family obligations?
1/2 of the deaths in the united states are attributed to?
Heart Disease/Cancer
