Insurance Flashcards
(Review) (21 cards)
What is Pure Risk?
What is Speculative Risk?
What is Subjective Risk?
What is Objective Risk?
What is Particular Risk?
What is Fundamental Risk?
What is Non-Financial Risk?
What is Financial Risk?
What is the Law of Large Numbers?
What is a Peril?
What is a Hazard?
Insurable Risks are CHAD
not Catastrophic, Homogeneous exposure units, Accidental, and measurable and Determinable
Elements of a valid contract
Make an offer - Accept that offer
Legal Competency - Voidable if made with a minor
Legal Consideration - What is being exchanged
Lawful Purpose
Legal Contract requires COALL!
Competent parties, Offer and Acceptance, Legal Consideration and Lawful Purpose
A Void contract -
was never valid and thus never came into existence
A Voidable contract -
a valid contract - but one party could cancel. The other is bound. Example - Contract with Minor.
A warranty is:
A Representation is:
Concealment is:
Warranty: Promise made by the insurED to the insurER
Representation: Statements made by the insurED to insurER during application process.
Concealment: InsurED is silent about a fact
Characteristics of Insurance Contracts:
Adhesion, Aleatory, Unilateral, Conditional.
Estoppel -
A Party is denied assertion of a right to which they are otherwise entitled.
Parol Evidence Rule -
No Prior understandings may contradict the written contract.
6 Steps of Risk Management:
DieDie -
1. Determine the objectives
Identify the Risks
Evaluate the Identified Risks as to probability of occurrence
Determine Alternatives for managing risks (Select Most Appropriate)
Implement the Program
Evaluate, Monitor and Review
