Fundamentals of Insurance - Chapter 1- 2 Practice Questions And Answers!

Fundamentals of Insurance - ChapterThree Main Categories Of Risk - ANSWER 1) Personal Risk 2)Property Risk 3)Liability Risk What is "Spread of Risk"? - ANSWER Insurance provides a mechanism in which the losses of few are shared among many Property and Casualty Insurance includes...(3 types of insurance) - ANSWER 1) Automobile Insurance 2) Property Insurance 3) Liability Insurance What are the 4 common options for dealing with risk? - ANSWER 1) Avoidance of Risk 2) Controlling of Risk 3) Retention of Risk 4) Transfer of Risk What is "Avoidance of Risk"? - ANSWER All chances of financial loss has been eliminated. *Note*- not practical method of dealing with risk What is "Controlling of Risk"? - ANSWER Loss control measures taken to reduce or mitigrate risk. (eg. Burglar/Fire alarms - not a total solution in eliminating risk but will reduce the potential for loss) What is "Retention of Risk"? - ANSWER Large corporations and government often assume financial responsibility for their own losses; Self- Insurance. this is generally less expensive than other option available to them. What is "Transfer of Risk"? - ANSWER When someone is unable to withstand the financial consequences of a potential loss, they may choose to transfer risk to an 1- 2 Practice Questions And Answers!