NJ Property State Exam 2023 with 100% correct answers

Risk the chance or uncertainty of loss Risk used within the insurance industry to refer to the subject of the insurance policy Possibility of loss the concept of risk involves ___________________ Insurance a formal social device used to accomplish the transfer of risk from an insured to the insurer Insurance policy a legal contract in which the premium paid represents a small certain cost exchanged so that the insurer will cover the possibility of a large financial loss pure risks risks which involve the possibility of loss only pure risks can legally be the subject of an insurance policy speculative risks risks which involve the chance of loss as well as the chance of gain speculative risks cannot legally be the subject of an insurance policy Perils causes of loss proximate cause the event, which, in a natural and continuous sequence, produced the loss proximate cause by definition the ___________________ of a loss would include a chain reaction vandals/vandalism a local business is forced to close for repairs after vandals smash the front window. the loss is caused by the peril of _______________________. out of control truck/collision a car is damaged in an accident by a truck which ran out of control on the icy road proximate cause the original event which set the chain reaction in motion of the ultimate loss hazards situations that increase the chance of loss physical hazard, morale hazard and moral hazard sub-classifications of hazards physical hazard a tangible hazard physical hazard a condition inherent to the property itself physical hazard a ___________________________ can be visibly seen, and in most instances, corrected. morale hazard this increased chance of loss manifests itself in the attitude of the insured morale hazard exists when an insured demonstrates attitude of carelessness or indifference to the possibility of loss moral hazard marked by situations in which an insured intentionally causes a loss, perhaps with the idea the he/she could possibly profit from the insurance policy