Chapter 25&26

Question 1

its a method for spreading individual risk among a large group of people to make losses more affordable for all -

Answer 1

insurance

Question 2

its the uncertainty as to as fiancial loss, increased by perils and hazards -

Answer 2

risk

Question 3

under the policy, the insurer agrees to assume an indentified risk for a fee, called the ….

Answer 3

premium

Question 4

premiums are usually paid at regular intervals by the ………… of the policy (……)

Answer 4

owner

policyholder

Question 5

in insurer collects ……… from policyholders under the assumption that only a few policyholders will have financial losses at any given time -

Answer 5

insurance premiums

Question 6

3 insurable risks -

Answer 6

personal
property
liability

Question 7

personal risks have to do w/ …..

Answer 7

life, health, disability

Question 8

property risks have to deal w/ …….

Answer 8

fire, theft, wind, rain, accident, natural disaster

Question 9

liability risks have to deal w/ ……

Answer 9

car accidents, personal injuries, business mistakes

Question 10

its an insurable risk where you are responsible; can be sued

Answer 10

liability risk

Question 11

risk management process - 3 steps -

Answer 11

identify risks of loss
assess seriousness of risks
handle risks

Question 12

pure risk- insurable (……) -

Answer 12

accidental

Question 13

speculaative risk - not insurable (…..) -

Answer 13

stocks

Question 14

3 ways to handle risks -

Answer 14

risk avoidance
risk reduction
risk assumption

Question 15

5steps in making a risk-management plan -

Answer 15

increase deductibles
purchase group insurance
consider payment options
look for discount opportunities
comparison shop

Question 16

if property is damaged, insurance will pay -

Answer 16

property risk

Question 17

it means you can be sued

-you are at the risk of being sued -

Answer 17

liability risk

Question 18

homeowners insurance covers ….

Answer 18

physical damage coveragge
theft and vandalism coverage
liability coverage

Question 19

2 automobile insurance -

Answer 19

cost of automobile insurance

types of automobile insurance coverage

Question 20

cost of automobile insurance (6) -

Answer 20

model, style, age of car
driver classification
location
distance driven
purpose ofdriving
age/sec of other drivers oof the car

Question 21

7 types of automobile insurance coverage -

Answer 21

liability
collison
comprehensive
personal injury protection (pip)
uninsure/underinsured motorist
no-fault insurance
assigned-risk policies

Question 22

collision coverage -

Answer 22

something you run into

Question 23

it covers things that are not covered by collision -

Answer 23

comprehensive

Question 24

when you get in an accident & the people dont have inurance, your insurance will kick in -

Answer 24

uninsured/ underinsured motorist coverage

Question 25

2 umbrella liabilty insurance -

Answer 25

personal catastrophe policy | supplements ur basic auto&propert liability coverage

Question 26

what to do after auto accident -

Answer 26

``` be prepared -alert traffic -hv a pen and card immediately after accident -stay calm -check forinjuries move car to safe place -turn hazards on -call police -notify insurance ```

Question 27

It doesn't matter who's at fault, each person will pay their own losses -

Answer 27

No fault insurance

Question 28

T or F Do not sign documents unless it's for the police or your insurance agent

Answer 28

True

Question 29

Make immediate .... about the accident

Answer 29

Notes

Question 30

Be......, don't be mean or screaming

Answer 30

Polite

Question 31

State only the .....

Answer 31

Facts

Question 32

If possible, don't ..... the accident

Answer 32

Leave

Question 33

A method for spreading individual risk among a large group of people to make losses more affordable for all

Answer 33

Insurance

Question 34

A risk that may result in either a gain or loss

Answer 34

Speculative risk

Question 35

Putting the policyholder back in the same financial condition he or she was in before a loss occurred

Answer 35

Indemnification

Question 36

The chances of loss or harm to personal or real property

Answer 36

Property risk

Question 37

A chance of loss with no chance for gain

Answer 37

Pure risk

Question 38

A financial Interest in life or property

Answer 38

Insurable interest

Question 39

The chances of loss that may occur when your errors or actions result in injuries to others or damage to their property

Answer 39

Liability risk

Question 40

A risk that may result in gain or loss because of changing economics conditions

Answer 40

Economic risk

Question 41

What is the purpose of insurance

Answer 41

Can reduce negative consequences of a pure risk by purchasing insurance - method for spreading individual risk

Question 42

Its a risk that lot of people face

Answer 42

Insurable risk

Question 43

Its an event whose occurrence can cause a loss

Answer 43

Peril

Question 44

Its. Condition that creates or increases tthe likelihood of some loss

Answer 44

Hazard

Question 45

Lowering your chance of loss by not doing high-risk activities

Answer 45

Risk avoidance

Question 46

Transferring risk by buying insurance to cover potential losses

Answer 46

Risk shifting

Question 47

An organized strategy for controlling financial loss from pure risks and insurable risks

Answer 47

Risk management

Question 48

Taking measures to lessen the frequency of severity of losses that might occur

Answer 48

Risk reduction

Question 49

The specified amount of a loss that you will have to pay

Answer 49

Deductible

Question 50

Understanding the types of risk you will face and their potential consequences

Answer 50

Risk assessment

Question 51

Accepting the consequences of risk by self-insuring to absorb the loss

Answer 51

Risk assumption

Question 52

This is an ex of.... Instead of having a party at your house and risking damage, rent out a hall.

Answer 52

Risk of avoidance

Question 53

This is an ex of.... You may put studded snow tires on your car, wear a seat belt

Answer 53

Risk of reduction

Question 54

This is an ex of.. You own a car and buy auto insurance

Answer 54

Risk assumption

Question 55

This is an ex of... Buying insurance to cover fire, theft,injury, or death

Answer 55

Risk shifting

Question 56

Changing your deductible reduces your insurance premium by .....

Answer 56

If u accept a higher deductible

Question 57

How can u reduce your overall automobile insurance premium costs-

Answer 57

Set a higher deductible | Park in garage