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RISK MANAGEMENT & INSURANCE FINAL EXAM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024 $15.99   Add to cart

Exam (elaborations)

RISK MANAGEMENT & INSURANCE FINAL EXAM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024

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RISK MANAGEMENT & INSURANCE FINAL EXAM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024

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  • August 3, 2024
  • 11
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • AWMA
  • AWMA
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RISK MANAGEMENT & INSURANCE
FINAL EXAM QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
Objective risk - ANSWER Objective Risks are measurable and can be improved by Loss Prevention & Loss
Control



Subjective risk - ANSWER Subjective Risk - A state of mind/worry. Improvement by discussion and
understanding



What are the principles of when you must show insurable interest for property and life insurance? -
ANSWER Property - At the time of Loss

Life - At the time of Purchase



Define pure and speculative risk - ANSWER Pure - Only Negative Results

Speculative - Positive or Negative Results



What are the reasons for internal policy Sub Limits? - ANSWER To provide limited coverage, and require
scheduling of higher limits or insuring elsewhere



What impact does an increased amount of exposure units have on the Expected Loss Value? - ANSWER
The larger the number of units, the closer the expected value will be to actual results, and a Lower
Variance and Standard deviation



Define a Peril, A Hazard, and an Exposure - ANSWER A Peril is what causes damage - Wind, Fire, collision,
hail

A Hazard is a physical condition that increases the chance of an accident/event - Icy roads, poor
maintenance, dying tree near your house

Exposure - The item subject to possible damage - House, car, people



What are the key elements to make risk insurable? - ANSWER Must be identifiable

Must be measurable

, Have a calculable chance of loss

Must be a large number of similar exposures

Losses must be Fortuitous - Unexpected and accidental

Not Catastrophic in nature

Have economically feasible premiums



Understand the difference between Maximum Possible and Maximum Probable Loss - ANSWER Max
Possible - Worst case possible - total of all assets destroyed - Not reduced by Loss Cont.

Max Probable - Most likely max loss considering loss control measures



Why are there Deductibles in policies - ANSWER Provide incentive for insured to manage
exposures/claims

Reduce insurance premiums

To eliminate small and expensive losses to adjust/settle



Understand Objective, Subjective, Systemic Risks - ANSWER Objective Measurable & manageable

Subjective - State of mind - Talk it out

Systemic - Failure of an entire system _ Economic system - Housing Market Crash



Explain the Scope of Enterprise Risk Management - ANSWER Enterprise Risk management assess all
Risks, Objective, Subjective, Systemic, Financial, Strategic etc.



Define Misrepresentations and Concealments & their implications in insurance claims - ANSWER
Misrepresentation is a statement written or oral that is not the truth and you know better - May void
policy & coverage

Concealment - Holding back information you know is important/material



What is Real Property? - ANSWER Buildings

Machinery

Carports

Detached Garages

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