Unit1 Introduction To Insurance Principles And Concepts Flashcards
What’s is peril ?
Cause of loss
What is a hazard ?
Increase the chance of loss
What are the three different types of hazards ?
Physical, morale, morale
There are two types of risk what are they? Also which is insurable ?
Pure and speculative ( only pure risk is insurable )
What is risk pooling?
Reduces financial risk or losses among many insureds.
When a individual is place as adverse selections?
Uninsurable purchase insurance and result a great lose to the insurer.
What does indemnity do for people?
Restores an insured to the condition they were held before.
What are the 6 Elements of an ideal insurable event ?
1: it is predictable
2: it is not catastrophic
3: it is due to chance
4: it is definite and measurable
5: there is a large loss exposure
6: the loss exposure is randomly selected
What is insurance ?
Risk transfer
What is a risk management ?
Transfer + Avoidance+ Reduction + Retention = Risk Management
In an insurance policy ?
The insured exchanges a small loss ( payment of loss )
For the insurers promise to cover a potentially large loss for the insured
Reckless driving ?
Morale
What does contract law deal with ?
Formation and enforceable of contracts
4 elements to a contract ?
Agreement
Competent parties
Legal purpose
Consideration
What’s is risk?
Uncertainty of loss
