Handling Risk
JKL Insurer transfers risk to PQR Insurer. JKL Insurer transfers some other risks to GHI Insurer. When JKL Insurer has a loss on risks transferred to both PQR and GHI Insurers, which insurer(s) pays the claims?
JKL, PQR, and GHI Insurers
Samantha is concerned about driving to work on major highways. She does not purchase insurance, nor avoid the major highways. What method of handling risk is Samantha using?
Retention
Which of the following is a method of handling risk?
Sharing
ABC Insurer transfers risk to DEF Insurer. ABC Insurer decides to transfer some other risks to LMO Insurer. When ABC Insurer needs to submit a claim on risks that were reinsured to DEF Insurer, which insurer(s) pays the claims?
ABC and DEF Insurers
Which of the following best describes reinsurance?
It spreads risk from one insurer to another.
Insurance is which method of handling risk?
Transfer
Which method of handling risk is insurance?
Transfer
All of the following are methods of handling risk except:
Transfer Avoidance Reduction Reinsurance
Beth is required to pay a $400 deductible on her health insurance claim. Which method of handling risk is demonstrated here?
Sharing
Debbie's insurance policy require her to pay a deductible before the insurer begins to pay benefits. This method of handling risk is called:
Sharing
What method of handling risk is used when an insurance policy requires the insured to pay a deductible before the insurance begins to pay benefits?
Sharing
Adverse selection occurs when:
A poorer than average risk seeks insurance
Aaron decides to work from his home to minimize her chances of getting in a collision. What method of handling risk is Aaron using?
Avoidance
Deliberately steering clear of exposure to risk describes which of the following methods of handling risk?
Avoidance
Judith is injured in a car accident. She incurs a covered loss of $50,000. She is required to pay $3,000 before the insurer will cover 80% of the covered loss. Which of the following terms best describes the $3,000 Judith must pay?
Deductible
Flu shots and annual physical exams are examples of what method of handling risk?
Reduction
Which of the following is NOT a method of handling risk?
Reinsurance
A person who does not take steps to transfer, avoid or reduce exposure to risk is engaging in which method of handling risk?
Retention