Insurance company
Business that issues policies of insurance.
Insurance interest
Any interest in life or property that would result in a financial loss.
Risk management
An organized strategy for protecting assists to help reduce financial loss.
Pure risk
There is always a chance of loss if certain events(perils) occur with this.
Risk assumption
You self-insure or pay for losses personally.
Risk reduction
You take measures to lessen the frequency or severity of losses that may occur.
Policy
A written insurance contract.
Risk
The possibility of loss.
Premium
The fee or ____ is paid by the policy holder.
Indemnification
Putting the policyholder back in the same financial condition as before a loss.
Probability
The mathematics of chance or the likelihood of an event occurring.
Property risk
The possibilities of loss or harm to real property.
Personal Risk
Potential losses involving income and standard of living.
Liability Risk
Both income and assets are protected from____arising out of errors or negligence.
Speculative Risk
There may be either a gain or loss.
Risk avoidance
Occurs when you avoid situations that involve substantial risk.
Exclusion
Specific losses that an insurance policy doesn't cover.
False
Most people have little need for any type of insurance.
True
Insurance companies collect premiums with the expectation that only a few policyholders will experience financial loss.
True
insurance companies added premiums based on statistical probability.
False
The higher the probability of an event occurring, the lower the premium for insuring against it
True
Exclusions are circumstances or losses not covered by the terms of an insurance policy.
False
An unearned premium is not refunded to the policyholder.
False
Risk management is a plan for buying insurance for every type of peril that could occur.
False
All risks have the same priority because they result in the same financial losses.
True
To shift or transfer risk, you buy insurance.
True
Increasing deductibles will reduce insurance premiums
Actuary
One who calculates premiums and dividends.
Beneficiary
The person who receives proceeds of a policy.
Claim
A request for payment for a loss.
Hazard
Defective wiring in a house is an example of a
Peril
The cause of possible loss.
Deductible
Specified amount subtracted from covered losses.
Perils
Fires, storms, explosions, and accidents are examples of
Personal
Potential losses involving your income and standard of living are called_____risk.
Speculative
Risk that may involve a gain or loss.
Risk reduction
Taking measures to lessen the frequency of severity of losses.