Arizona- Property and Casualty
Insurance is a contract by which one seeks to protect another from correct
answersLoss Insurance will protect a person, business, or entity from loss.
Insurance is the transfer of correct answersRisk
Insurance is the transfer of financial responsibility associated with a
potential of a loss (risk) to an insurance company.
Events or conditions that increase the chances of an insured loss occurring
are referred to as correct answersHazards
Conditions such as lifestyle and existing health, or activities such as scuba
diving are hazards and may increase the chance of a loss occuring.
Which of the following is a unit of measurement an underwriter uses when
determining the premium rates for insurance? correct answersExposure
Exposure is a unit of measurement used to determine rates charged for
insurance
coverage.
What do individuals use to transfer their risk of loss to a larger
group? correct answersInsurance
Insurance is the mechanism whereby an insured is protected against loss by
a specified feature contingency or peril in return for the present payment of
premium. Because
many other individuals with the same or similar risk of lost are paying
premiums, funds are available to indemnify those who actually suffer that
loss.
The risk of loss may be classified as correct answersPure risk and speculative
risk. Pure risks involve the probability or possibility of loss with no chance
for gain. Pure risks are generally insurable. Speculative risks involve
uncertainty as to whether the final outcome will be gain or loss. Speculative
risks are generally uninsurable.
A situation in which a person can only lose or have no change
represents correct answersPure risk
Pure risk refers to situations that can only result in a loss or no change. Pure
risk is the only type insurance companies are willing to accept.
A person who does not lock the doors or does not repair leaks shows an
indifferent attitude. This person presents what type of hazard? correct
answersMorale
A morale hazard is someone who has an indifferent attitude towards an
insurance
company. He is careless or irresponsible because he knows his loss will be
covered by insurance.
, The insurer may suspect that a moral hazard exists if the policyholder
correct answersIs not honest about his health on an application for insurance.
Moral hazards refer to those applicants that may lie on an application for
insurance, or in the past, have submitted fraudulent claims against an
insurer.
A hazard is best defined as: correct answersSomething that increases the
risk of loss
For the purpose of insurance, risk is defined as correct answersthe
uncertainty or chance of loss
The causes of loss insured against in an insurance policy are known
as correct answersPerils
Perils are the causes of loss insured against in an insurance policy.
A tornado that destroys property would be an example of which of the
following correct answersA peril
All of the following are examples of risk retention EXCEPT
A. Deductibles
B. Co-payments
C. Self- Insurance
D. Premiums correct answersD. Premiums
Retention is a planned assumption of risk, or acceptance of responsibility for
the loss by an insured through the use of deductibles, co-payments, or self-
insurance
Which of the following is the basis for a claim against an insurance
policy? correct answersLoss
Claims result from losses by a peril insured against an insurance policy
Which of the following is NOT a goal of risk retention?
E. To reduce expenses and improve cash flow
F. To increase control of claim reserving and claims settlements
G. To fund losses that cannot be insured
H.To minimize the insured's level of liability in the event of loss correct
answersD. To minimize the insured's level of liability in the event of loss
Retention usually results from three basic desires of the insured to: reduce
expenses and improve cash flow, to increase control of claim reserving
and claims settlements, and to fund losses that cannot be insured.
Following a career change, an insured is no longer required to perform
many physical activities, so he has implemented a program where he
walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with
risk does this scenario describe? correct answersReduction
Insurance is a contract by which one seeks to protect another from correct
answersLoss Insurance will protect a person, business, or entity from loss.
Insurance is the transfer of correct answersRisk
Insurance is the transfer of financial responsibility associated with a
potential of a loss (risk) to an insurance company.
Events or conditions that increase the chances of an insured loss occurring
are referred to as correct answersHazards
Conditions such as lifestyle and existing health, or activities such as scuba
diving are hazards and may increase the chance of a loss occuring.
Which of the following is a unit of measurement an underwriter uses when
determining the premium rates for insurance? correct answersExposure
Exposure is a unit of measurement used to determine rates charged for
insurance
coverage.
What do individuals use to transfer their risk of loss to a larger
group? correct answersInsurance
Insurance is the mechanism whereby an insured is protected against loss by
a specified feature contingency or peril in return for the present payment of
premium. Because
many other individuals with the same or similar risk of lost are paying
premiums, funds are available to indemnify those who actually suffer that
loss.
The risk of loss may be classified as correct answersPure risk and speculative
risk. Pure risks involve the probability or possibility of loss with no chance
for gain. Pure risks are generally insurable. Speculative risks involve
uncertainty as to whether the final outcome will be gain or loss. Speculative
risks are generally uninsurable.
A situation in which a person can only lose or have no change
represents correct answersPure risk
Pure risk refers to situations that can only result in a loss or no change. Pure
risk is the only type insurance companies are willing to accept.
A person who does not lock the doors or does not repair leaks shows an
indifferent attitude. This person presents what type of hazard? correct
answersMorale
A morale hazard is someone who has an indifferent attitude towards an
insurance
company. He is careless or irresponsible because he knows his loss will be
covered by insurance.
, The insurer may suspect that a moral hazard exists if the policyholder
correct answersIs not honest about his health on an application for insurance.
Moral hazards refer to those applicants that may lie on an application for
insurance, or in the past, have submitted fraudulent claims against an
insurer.
A hazard is best defined as: correct answersSomething that increases the
risk of loss
For the purpose of insurance, risk is defined as correct answersthe
uncertainty or chance of loss
The causes of loss insured against in an insurance policy are known
as correct answersPerils
Perils are the causes of loss insured against in an insurance policy.
A tornado that destroys property would be an example of which of the
following correct answersA peril
All of the following are examples of risk retention EXCEPT
A. Deductibles
B. Co-payments
C. Self- Insurance
D. Premiums correct answersD. Premiums
Retention is a planned assumption of risk, or acceptance of responsibility for
the loss by an insured through the use of deductibles, co-payments, or self-
insurance
Which of the following is the basis for a claim against an insurance
policy? correct answersLoss
Claims result from losses by a peril insured against an insurance policy
Which of the following is NOT a goal of risk retention?
E. To reduce expenses and improve cash flow
F. To increase control of claim reserving and claims settlements
G. To fund losses that cannot be insured
H.To minimize the insured's level of liability in the event of loss correct
answersD. To minimize the insured's level of liability in the event of loss
Retention usually results from three basic desires of the insured to: reduce
expenses and improve cash flow, to increase control of claim reserving
and claims settlements, and to fund losses that cannot be insured.
Following a career change, an insured is no longer required to perform
many physical activities, so he has implemented a program where he
walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with
risk does this scenario describe? correct answersReduction
