P&C Basics

All of the following are risk management techniques, except:

• Enhancement

• Retention

• Transfer

• Avoidance

Under aleatory contracts the exchange of values may be:

• Unequal
• Equal
• Rescinded
• Waived

Loss of income suffered by a storeowner after his/her store is destroyed in a fire is considered a(n):

• Secondary Loss
• Provisional Loss
• Delayed Loss
• Indirect Loss

Which of the following is an example of Special Damages?

• Special Damages are the damages assessed by the court as a penalty for gross negligence

• Compensation to a husband or wife for the loss of companionship of a spouse

• It is compensation to an injured party for actual medical expenses and loss of earnings

• Special Damages are the amount the injured is entitled to over and above medical expenses and pain and suffering disfigurement

When the insurance company and insured cannot agree upon the amount of the loss, the person selected to help the two hired appraisers is called a(n):

• Agent
• Adjuster
• Umpire
• Claim representative

Risks can be classified as pure or speculative. Which of the two, pure or speculative, is always uninsurable?

• Speculative
• Neither
• Speculative and Pure
• Pure

Which hazard is defined as intentionally causing, fabricating, or exaggerating a loss?

• physical
• legal
• moral
• morale

There are four types of hazards that cause a loss. An insured failing to salt and shovel her sidewalk after a snowstorm presents what type of hazard?

• physical
• moral
• morale
• legal

Sara is the owner of a gift shop that was struggling to make enough money to cover its bills. Sara knew there were reports of robberies in the area but continued to leave the doors to the store unlocked after she would leave at night. Sara figured if her store was robbed she could collect the insurance money and pay off some debt. Sara’s carelessness is an example of what type of hazard?

• legal
• physical
• moral
• morale

A second negligent act that interferes with the chain of events leading to a loss is known as a(n):

• Foreseeable consequence
• Loss of consortium
• Tort
• Intervening cause