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Cards In This Set
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Insurance is a contract whereby one undertakes to indemnify another against?
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Damage
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According
to the California Code of Insurance, insurance is a contract whereby one
undertakes to indemnify another against loss, damage, or liability arising from
a contingent or unknown event.
True or False |
True
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Risk is?
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The uncertainty or chance of a loss occurring.
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Risk
is a certainty or chance of a loss occurring.True or False
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False, Risk is a uncertainty or chance of a loss occurring.
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What are the main types of risks?
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The
two main types of risk are pure risk and speculative risk.
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The two main types of risk are pure risk and speculative risk.True or False
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True, the two main types of risk are pure risk or speculative risk.
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A peril is?
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A
peril is the actual cause of the loss. Examples of common perils include fire,
wind, hail, collision with another car, and theft.
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A hazard is best defined as:
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A
hazard is anything that increases the chance of loss or the severity of loss
due to a peril
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A hazard that deals
with attitudes, behavior, and habits is an example of:
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Moral
hazards deal with attitudes, behavior, and habits. Examples of moral hazards
are drug abuse, dishonest claims, alcoholism, smoking, and driving over the
speed limit.
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The
law of large numbers basically says; the larger the amount of information
gathered to make statistics, the more reliable that information will be.True or False
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True,the larger the amount of information gathered to
make statistics, the more reliable the information will be.
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The
term ideally insurable risk means the risk is financially beyond reason and is unreasonable to insure.
True or False |
False, the term ideally insurable risk means the risk is financially within reason and is
reasonable to insure.
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For insurable interest to exist:
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Insurable
interest means the insured must establish he actually own something before it
can be insured. This means the insured has a possibility of suffering financial
loss.
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What is the term that describes balancing preferred
risks with poor risks, and average risks in the middle?
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Balancing
preferred risks with poor risks and average risks in the middle creates a
profitable distribution of exposures.
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For
a contract to be enforced by the law it must contain these four elements: offer
and acceptance, consideration, competent parties, and legal purpose True or False
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True, it must contain these four elements: offer and acceptance, consideration, competent parties, and legal purpose for it to be enforceable
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What are the four
major elements of a contract?
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1.An agreement 2.Competent parties3.Legal purpose4.Consideration
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