Wisconsin Insurance EXAM 2025
All-in-One Exam Prep File | Practice Papers, A+ Model Answers, and Key Topic
Summaries
Risk - Not Knowing what will happen in the future and the possibility the outcome will be
negative
Defined As:
Chance of Loss
Possibility of Loss
Uncertainty of Loss
Types of Loss - 1. Financial
-Loss of house to loss of life
2. Non-Financial
-Loss of Friendship
Speculative Risk - I win or I lose
Pure Risk - I lose or I do not lose
Peril - The actual cause of a loss
Natural, Human, Economical, etc
, Hazard - Situations or factors that may increase the possibility of a loss
Common Types:
Physical - Bad Breaks, ice on sidewalk
Moral - Dishonest Tendencies
Morale - Having a careless attitude because of coverage
Legal - Federal and/or state regulations must be followed
The process of risk management - 1. Identify the Objectives
2. Identify the Risks
3. Evaluate the Risks
How to deal with risk - Avoid (Don;t fly, hang glide, mountain climb etc)
Retain (Self insure)
Transfer (Social vehicle for insurance)
Share (incorporate or add a partner)
Reduce (install fire alarms, stop smoking, etc)
Rules of Risk Management - 1. Don't Risk more than you can afford to lose
2. Consider the odds
3. Don't risk a lot for a little
4. Priority for purchasing insurance
Pooling - Spread of risk
Law of Large numbers - Allows for predictability of risk
All-in-One Exam Prep File | Practice Papers, A+ Model Answers, and Key Topic
Summaries
Risk - Not Knowing what will happen in the future and the possibility the outcome will be
negative
Defined As:
Chance of Loss
Possibility of Loss
Uncertainty of Loss
Types of Loss - 1. Financial
-Loss of house to loss of life
2. Non-Financial
-Loss of Friendship
Speculative Risk - I win or I lose
Pure Risk - I lose or I do not lose
Peril - The actual cause of a loss
Natural, Human, Economical, etc
, Hazard - Situations or factors that may increase the possibility of a loss
Common Types:
Physical - Bad Breaks, ice on sidewalk
Moral - Dishonest Tendencies
Morale - Having a careless attitude because of coverage
Legal - Federal and/or state regulations must be followed
The process of risk management - 1. Identify the Objectives
2. Identify the Risks
3. Evaluate the Risks
How to deal with risk - Avoid (Don;t fly, hang glide, mountain climb etc)
Retain (Self insure)
Transfer (Social vehicle for insurance)
Share (incorporate or add a partner)
Reduce (install fire alarms, stop smoking, etc)
Rules of Risk Management - 1. Don't Risk more than you can afford to lose
2. Consider the odds
3. Don't risk a lot for a little
4. Priority for purchasing insurance
Pooling - Spread of risk
Law of Large numbers - Allows for predictability of risk
