Insurance Terms and Related Concepts

The more people with a similar exposure to loss, the more predictable losses will be?

• Adverse Selection

• Law of Large Numbers

• Underwriting

• Proximate Cause

Insurable risk may exist between all of the following EXCEPT:

• Friends

• Spouse

• Business Partners

• Creditor/Debtor

The uncertainty of a loss in the future is known as?

• Pure

• Peril

• Risk

• Speculative

The chance of loss with no potential for gain is known as?

• Adverse Risk

• Pure Risk

• Loss Risk

• Speculative Risk

A property is insured against fire. What is fire considered?

• Risk

• Hazard

• Peril

• Loss

What increases the chance of a loss occurring?

• Peril

• Risk

• Hazard

• Loss

What are the three types of hazards

• Physical

• Pure

• Morale

• Speculative

• Moral

Continuous or repeated exposure to conditions resulting in damage to property is called

• Occurence

• Accident

• Exposure

• Direct Loss

What is a direct loss?

• Covers only losses listed

• Results of Indirect Losses

• Proximate cause of Loss

• Direct Physical Damage

Which of the following is an example of an indirect loss?

• A building burning down

• Water on the walls of a burning building

• Staying at a hotel after a fire

• A neighbor tripping on your sidewalk