RMIN 4000 Test 1 Brown UGA Questions and Answers | Latest Update | 2024/2025 | 100% Pass
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Course
RMIN 4000
Institution
RMIN 4000
RMIN 4000 Test 1 Brown UGA Questions
and Answers | Latest Update | 2024/2025
| 100% Pass
What is the definition of risk?
Risk is the uncertainty regarding the outcome of a future event, particularly regarding the
possibility of financial loss.
What does risk management involve?
Ris...
RMIN 4000 Test 1 Brown UGA Questions
and Answers | Latest Update | 2024/2025
| 100% Pass
What is the definition of risk?
✔✔ Risk is the uncertainty regarding the outcome of a future event, particularly regarding the
possibility of financial loss.
What does risk management involve?
✔✔ Risk management involves identifying, assessing, and taking steps to minimize or control
the impact of risks.
What is the purpose of insurance?
✔✔ Insurance is a financial product that transfers risk from an individual or business to an
insurer in exchange for premium payments.
What does premium refer to in insurance?
✔✔ A premium is the amount paid by the policyholder to an insurance company for coverage
over a specified period.
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,What is the concept of moral hazard?
✔✔ Moral hazard refers to the tendency for individuals to take on more risk when they are
protected from the consequences, often due to insurance coverage.
What is adverse selection in insurance?
✔✔ Adverse selection occurs when individuals with higher risks are more likely to purchase
insurance, leading to a higher-than-expected claims ratio for the insurer.
What is underwriting in the context of insurance?
✔✔ Underwriting is the process used by insurers to evaluate and assess the risks of insuring a
particular individual or asset, determining the terms and cost of coverage.
What is a deductible?
✔✔ A deductible is the amount the insured must pay out of pocket before the insurance company
will cover any losses.
What does indemnity mean in insurance?
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, ✔✔ Indemnity refers to the principle that insurance should restore the insured to the same
financial position they were in before a loss, without allowing for a profit.
What is the purpose of reinsurance?
✔✔ Reinsurance is a practice where an insurance company transfers part of its risk to another
insurer to reduce its liability in the event of a large loss.
What is self-insurance?
✔✔ Self-insurance is when a company or individual sets aside funds to cover potential losses
instead of purchasing insurance from an external provider.
What is the role of an insurance broker?
✔✔ An insurance broker acts as an intermediary between the client and the insurance company,
helping the client find suitable coverage and negotiating terms.
What is liability insurance?
✔✔ Liability insurance provides coverage for legal claims resulting from injuries or damages
caused to others by the policyholder.
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