Basic Insurance concepts and principles

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called

Avoidance

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

Legal hazard

A person who does not lock the doors or doesn't repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

Which of the following is Not a goal of risk retention

To minimize the insureds level of liability in the event of loss

Adverse selection is a concept best described as

Risk with a higher probability of a loss is seeking insurance more often then other risk

Hazard is best defined as

Something that increases the risk of loss

Events that a person has both the chance of winning or losing are classified as

Speculative risk

Peril is most easily defined as

The cause of loss insured against

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss

Which of the following insurance options would be considered a risk sharing arrangement?

Reciprocal