Exam FX (PA Property and Casualty - Ch. 1 General Insurance) Questions With Complete Solutions

Insurance Transactions include what 4 tactics correct answer: Solicitation Negotiation Sale Advising 2 types of Risk correct answer: 1. Pure 2. Speculative Pure Risk Definition correct answer: A risk that can only can result in loss or no change Speculative Risk Definition correct answer: A risk that can result in either loss or gain What is the only type of risk insurance companies are willing to accept? correct answer: Pure Risk Exposure Definition correct answer: A unit of measurement that insurance companies use to determine rates charged for insurance coverage. homogeneous correct answer: A large number of units having the same or similar exposure to loss. What is the basis of insurance? correct answer: Sharing risk between a large homogeneous group with similar exposure to risk. Hazards Definition correct answer: Conditions or situations that increase the probability of a loss occurring. 3 Types of Hazards correct answer: Moral, Morale, and Physical