Texas Adjusters License (With complete solution)

Horatio is a business owner who is part of a business owners group that are buying old commercial buildings in their small city and refurbishing them. Horatio has bought a beautiful historical building made mostly of wood. He installs a sprinkler system right away to prevent a fire. What risk management strategy is Horatio using? correct answers Risk Reduction A church has had the woodwork in the building refinished and new stain and varnish has been applied. The workers placed the rags and brushes that were used to apply the varnish in a small closet and closed the door, creating the possibility of spontaneous combustion. Which of the following terms best describes this condition? correct answers Hazard Which of the following is most likely to be uninsurable? correct answers The purchaser of a new home wants to protect herself from a possible drop in housing prices Adverse selection occurs when: correct answers Applicants are accepted by the insurer with little or no attention given to underwriting A risk where both profit and loss are possible is a ____________ risk. correct answers Speculative When a person purchases several insurance policies to provide more coverage on a risk than the value of the possible loss, it is known as: correct answers Over insurance 100-year flood is an example of which of the following types of risk? correct answers Static Risk Which of the following phrases best describes a "hazard?" correct answers A condition that increases the chances of a loss.. Willie's Widgets has been earning a large portion of their market share for 10 years. During Willie's 11th year in business, Wynonna's Widgets opens and her superior marketing practices leaves Willie unable to continue in business. Which of the following types of risk caused Willie's loss? correct answers Dynamic Risk Which of the following is NOT a common risk management technique? correct answers Multiply the risk by engaging in hazardous activities. Which of the following describes a "peril"? correct answers Lightning that stikes a house and destroys electronic equipment inside. Joe enters into a contract with Martha to set fire to her house so she can collect on her insurance policy. Martha will pay Joe a portion of the insurance proceeds for his trouble. Which of the following parts of a valid contract is missing in this situation? correct answers Legal Purpose Daniel has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Daniel's home suffered damage. In this situation, both