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