Moral hazard - Study guides, Class notes & Summaries

If a company cancels an auto policy mid term, the refund will be made on a. pro rata basis b. short rate basis c. retroactive basis d. coinsurance basis Pro Rata Basis What is the term used to describe terminating the insurance relationship at the end of the policy period ? a. cancellation b. nonrenewal c. separation d. exclusion Nonrenewal Which is the best example of an indirect loss ? a. sequential loss b. liability loss c. employee theft d. loss of use Loss o...

WebCE Property & Casualty Prep Exam Questions and Answers 2023 Risk Chance of loss 5 Risk or Loss Factors 1. Risk 2. Loss 3. Exposure 4. Peril 5. Hazard Insurance allows: Individual or group to transfer over to insurance company the risk of financial loss from a destructive event Fundamental purpose of insurance is: To indemnify policyholder against covered losses or restore policyholder back to same financial position they were in before Insurance companies may ...

RMIN 4000 UGA Test 1. Chapters 1-3 Questions and Answers Already Passed 1) Traditionally, risk has been defined as A) any situation in which the probability of loss is one. B) any situation in which the probability of loss is zero. C) uncertainty concerning the occurrence of loss. D) the probability of a loss occurring. C 2) Objective risk is defined as A) the probability of loss. B) the relative variation of actual loss from expected loss. C) uncertainty based on a person's menta...

CA Life and Health Exam Questions and Answers Already Passed What is insurance? Insurance is the legal contract where two parties agree that if something will happen, a value will be exchanged. What's the difference between pure risk and speculative risk? Pure risk is when you'll lose it all or there will be no change. Speculative risk you can either win or lose. What is peril? peril is the causes of loss insured against in an insurance policy What is hazard? conditions that increase the pr...

CALIFORNIA Life, Accident and Health Final Exam Questions and Answers 100% VerifiedCALIFORNIA Life, Accident and Health Final Exam Questions and Answers 100% VerifiedCALIFORNIA Life, Accident and Health Final Exam Questions and Answers 100% Verified A moral hazard - ANSWER-is a dishonest person (lacking in morals) A morale hazard - ANSWER-a careless person. A peril - ANSWER-is a cause of loss Pure risk - ANSWER-is insurable & includes only a chance of loss.

NC Health Insurance Exam Pearson Vue Latest Graded A+ Pure Risk chance of loss or no loss but not gain insurable Speculative Risk there is possibility of loss but of gain no insurablility exposure unit subject to loss peril cause of loss life insurance death Health insurance accident and sickness hazard increases the likelihood or severity of loss Three types of hazard physical, moral, morale physical hazard arise from the inherent characteristi...

RMIN 4000 Exam 1 Brown Latest Update Graded A+ Textbook definition of RISK Uncertainty concerning the occurrence of a loss Better definition of RISK A calculated possibility of a negative outcome Calculated Possibility 0 = Impossible event (NO RISK) 0.5 = Highest Risk (Most Uncertainty) 1 = 100% Certain Event (NO RISK Negative Outcome Loss Losses must be __________? Quantifiable Pure Risk States Loss or No Loss Examples of Pure Risks Fire, Cancer, Dog bites a ...

Risk - Answer-chance of loss Peril - Answer-cause of loss (fire, wind, theft, etc) Direct Loss - Answer-the immediate result of an event caused by a covered peril Indirect Damage Loss - Answer-loss resulting from a direct loss to property (income loss expense resulting from the inability to use damaged property) Exposure - Answer-the state of being subject to risk Hazard - Answer-a condition that increased the likely occurrence of a peril or the likely severity of a loss (moral, m...

RMIN 4000- Exam 1 Latest Update 100% Solved things of value (assets) that could be lost Exposures Examples of exposures when driving car: Car health life money future income contents (stuff) freedom license things that could happen to these assets Perils Examples of perils when driving car: Car accident license revoked act of god breakdown vandalism maintenance theft lawsuit what you do to protect these assets and/ or prevent/ reduce losses risk management...

From the insured's perspective, not owning or riding in an automobile is an example of which type of risk mitigation? Avoidance. Hazard risk. Retention. Loss prevention. Transfer. Combination. Pure risk. Avoidance Purposely leaving your old bicycle unlocked for thieves in order to collect insurance money for a new bicycle is a ________, while accidentally running into a bus while you were setting up a playlist on your mobile phone is a ___________. moral hazard, morale hazard. ...