Chapter 1 property Exam FX Questions with
Verified Correct Answers
Insurance
Is a transfer of risk of loss from an individual or business entity to an insurance company
Law of Large Numbers
States that the larger the number of people with a similar exposure to loss, the more
predictable actual losses will be.
Insurable Interest
In property insurance, this means the insured would occur financial loss if the insured
property was damaged.
Risk
The uncertainty or chance of a loss occurring.
Pure Risk
situations that can only result in a loss or no change
Speculative Loss
Involves the opportunity for either loss or gain
perils
are the causes of loss insured against in an insurance policy.
Hazards
Conditions or situations that increase the probability of an insured loss occurring.
, indemnity
Is a provision in an insurance policy that states that in the event of a loss, an insured or
beneficiary is permitted to collect only to the extent of financial loss
Subrogation
the right for an insurer to pursue a third party that caused an insurance loss to the insured
Accident
is a sudden, unplanned and unexpected event, not under the control of the insured, resulting
in injury or damage that is neither expected nor intended.
occurrence
losses caused by continuous or repeated exposure to conditions resulting in injury to persons
or damage to property that is neither intended nor expected.
Direct Loss
includes damage where the insured peril was the proximate cause of loss
Indirect Loss
Consequential loss as the result from a direct loss
Named Peril
the breadth of coverage provided under an insurance policy form that lists specific covered
perils
Open Peril
The breadth of coverage provided under an insurance policy form that insures against any
risk of loss that is not specifically excluded.
Verified Correct Answers
Insurance
Is a transfer of risk of loss from an individual or business entity to an insurance company
Law of Large Numbers
States that the larger the number of people with a similar exposure to loss, the more
predictable actual losses will be.
Insurable Interest
In property insurance, this means the insured would occur financial loss if the insured
property was damaged.
Risk
The uncertainty or chance of a loss occurring.
Pure Risk
situations that can only result in a loss or no change
Speculative Loss
Involves the opportunity for either loss or gain
perils
are the causes of loss insured against in an insurance policy.
Hazards
Conditions or situations that increase the probability of an insured loss occurring.
, indemnity
Is a provision in an insurance policy that states that in the event of a loss, an insured or
beneficiary is permitted to collect only to the extent of financial loss
Subrogation
the right for an insurer to pursue a third party that caused an insurance loss to the insured
Accident
is a sudden, unplanned and unexpected event, not under the control of the insured, resulting
in injury or damage that is neither expected nor intended.
occurrence
losses caused by continuous or repeated exposure to conditions resulting in injury to persons
or damage to property that is neither intended nor expected.
Direct Loss
includes damage where the insured peril was the proximate cause of loss
Indirect Loss
Consequential loss as the result from a direct loss
Named Peril
the breadth of coverage provided under an insurance policy form that lists specific covered
perils
Open Peril
The breadth of coverage provided under an insurance policy form that insures against any
risk of loss that is not specifically excluded.
