State Farm|Test Solutions 100% Verified

State Farm Pure risk ANSWER- Financial loss is the only possible outcome, no chance for financial gain (ex: accidents, sickness, fire, disabilities) Speculative Risk ANSWER- Where there is an outcome for either financial gain or none (ex: gambling, stock market, real estate) Morale Hazards ANSWER- Refer to the insureds state of mind, usually lapses in judgement are occurring so remember lots of E's in carelessness, indifference, and imprudence (ex: speeding to get home to watch a TV show) Moral Hazards ANSWER- When an insured is dishonest and has little regard toward future responsibilities (ex: lying, fraudulent claims, smoking, drug addiction) Peril's? ANSWER- The cost of lost listed within a policy for which the insurer will provide protection against. (Ex: life and health insurance protects against medical expense, death, loss of income while homeowners insurance will protect against FIRE, WIND, HAIL Where can Peril's on your test be found? ANSWER- They can be found in the Insurance clause also known as the Insurance agreement. Let's talk about LOSS when it comes to insurance? ANSWER- An insurer will pay out a claim only if it results in a loss to the insured. Such as rain may create hazardous road conditions but there was no loss to the insured. Fire is a peril listed in the policy, however if there was no damage to anything, no loss, no claim to be paid.