RIBO: ENTRY LEVEL 1 LATEST UPDATE GRADED A

RIBO: ENTRY LEVEL 1 LATEST UPDATE GRADED A Risk Chance of a loss Which type of risk is insured and why? Pure risk, because speculative risk is comparable to gambling. 3 Ways risk (management) is dealt with? REDUCE: preventative measures ASSUME/RETAIN: Self-insure TRANSFER: purchase insurance Which of the following is not a risk? A) Assume or retain risk B) Reduce the risk C) Doing nothing / avoiding the risk D) Transfer the risk C) Doing nothing / avoiding the risk Insurer Insurance company Stock Insurance company Owned by shareholders Mutual insurance company Owned by policyholders - Usually smaller, for Ex., One big claim can flux the premium. Once these companies become big they are titled stockholders. Co-operative associations Not looking to consume profits, these policies are expected to be cheaper. Lloyd's of London Not an insurance company but rather an insurance market. Ex. Syndicates are investors for things such as athletes legs, voices etc. High risk Vs. High reward. Insured Who is covered. Named insured = policy holder (owner) What is not included in the general types of insurance? Life and Health Application of insurance includes: Bonds, Liability, Accident / sickness, Valued items, personal articles coverage/floater Declaration Signed approving information provided is the upmost truth Statutory conditions Provincial laws protecting both parties being the insured and the insurer Which of the following is the truest regarding effective and expiry date? A) 12:00AM, Western time at location of insured. B) 12:00PM, Standard time at location of insured. C) 12:01AM, Eastern time at location of insured. D) 12:01AM, Standard time at location of insured. D) 12:01AM, Standard time at location of insured. Agent VS Broker Agent: Works solely for ONE insurance company. Broker: Independent of any insurance company but sells insurance for them. Fiduciary, key word? Money. Binding Authority Power given to a broker by a insurance company to sell a policy. (Company tells you what you can and cannot sell). Street light Ex. Green = insured fits Yellow = insured has some flaws but they may be over seen Red = Do not ask and do not sell Binder Put insurance in force (Ex. Pink slips), Written or oral confirmation that an insurance policy is in force. Contract, Any LEGAL contract must include to make it valid? Offer and acceptance Consideration Legal capacity Meeting of