basic insurance concepts and principles

Which of the following is the correct formula for computing a loss ratio?

(incurred losses + loss adjusting expense) / earned premium

The Loss ratio compares

Earned premium to losses

what is an example of insurable risk?

Hail damagw to the roof of a car

The protection of the insurer from adverse selection is provided in part by

Profitable distribution of exposures

a situation in which a person can only lose or have no change represents

Pure risk

Insurance is the transfer of

Risk

What type of insurance guarantees or indemnifies owners of real or personal property or the holders of liens or other interested parties against loss or damage suffered to said property?

Title insurance

The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rates is known as

Underwriting

With respect to the business of insurance, a hazard is

any condition or exposure that increases the possibility of loss

Events or conditions that increase the chances of an insured loss occurring are referred to as

hazards

A set of legal or regulatory conditions that affect an insurers ability to collect premiums commensurate with the level of risk incurred would be considered a

legal hazard