Fundamentals of Insurance Chapter 2 (BC Canada) Final Exam Questions and All Correct Answers Updated.

Identify three major categories of insurance needs. - Answer Personal Risk Property Risk Liability Risk Identify four options an insured may use in dealing with risk. - Answer Avoidance of risk Controlling of risk Retention of risk Transfer of risk What what option of dealing with risk is the least practical? - Answer Avoidance of risk There are two types of risk. Identify them and provide a brief description for each. - Answer Speculative Risk Involves the possibility of either financial loss or gain. The interests of society would not be served two people were able to profit from their failure. For this reason insurers will not provide Insurance on risk which are speculative in nature. Essentially, you cannot ensure losses that have a possibility of being Profits. Pure Risk Pure risk involves the chance of a financial loss with no chance of a financial gain. Essentially, losses can only be insured if there is no possibility of a person to profit from that loss. Define Contract - Answer A contract is an agreement between two or more parties which is enforceable at law.