Quiz 1 (Chapters 1-3)

Question 1

How to deal with unavoidable risk?

Answer 1

Risk Avoidance

Question 2

Two ways to minimize losses

Answer 2

Avoid the risk; Minimize the risk

Question 3

The devastating event was the catalyst for home insurance

Answer 3

The Great London Fire of 1666

Question 4

Famous for the unusual policies they write

Answer 4

Lloyds of London

Question 5

Premature death, loss of income, property damage, Long-term care needs are examples of

Answer 5

Risks that people face

Question 6

This impacts a large number of people and is not insurable

Answer 6

Fundamental or systemic risk

Question 7

Icy roads, lightning , poor eyesight are examples of these

Answer 7

Perils

Question 8

A character flaw

Answer 8

Moral Hazard

Question 9

A situation to avoid when selling to many polices in a single area is an example of?

Answer 9

Catastrophic loss

Question 10

Legal representatives of the company

Answer 10

Agent

Question 11

This type of insurance needs a gate-keeper

Answer 11

Health Maintenance Organization (HMO)

Question 12

There is no longer a cap on this due to the Affordable Care Act

Answer 12

Benefit Limits

Question 13

This needs to be met first in a health insurance company

Answer 13

deductible

Question 14

This term refers to a cap on the insured expense in a health insurance policy

Answer 14

Maximum out of the pocket

Question 15

Oops I forgot to pay my bill

Answer 15

Grace Period

Question 16

The last step in the Risk Management Process

Answer 16

Monitoring

Question 17

Underwriters try to avoid this

Answer 17

Adverse Selection

Question 18

The type of authority given to agents that can get them in trouble

Answer 18

Apparent Authority

Question 19

The risk of a lawsuit due to negligence

Answer 19

Personal Liability

Question 20

Low Frequency, High Severity

Answer 20

Use risk transfer

Question 21

A large number of exposure units

Answer 21

Law of large numbers

Question 22

This must be reasonable and affordable

Answer 22

Premiums

Question 23

This only needs an insurable interest at the time of policy inception at the time of policy inception

Answer 23

Life Insurance

Question 24

This law eliminated pre-existing conditions for individuals

Answer 24

The Affordable Care Act