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