FIRE 309 test 2 2024 with 100% correct answers

The requirement that losses should be accidental and unintentional in order to be insurable results in which of the following? I. Decrease in moral hazard II. More accurate prediction of future losses correct answersboth I and II Which of the following types of risks is normally uninsurable by private insurers? correct answersPolitical risk The tendency for unhealthy people to seek life or health insurance at standard rates is an example of correct answersadverse selection Which of the following statements regarding private insurance and government insurance is (are) true? I. Private insurance programs include life and health insurance and property and liability insurance. II. Social insurance programs are government insurance programs that are voluntary and financed entirely by contributions from covered employers. correct answersI only BBB Auto Club provides emergency road service and other services to its members. BBB Auto Club charges a higher membership fee to new members than it charges to members who are renewing their membership. When asked to explain this pricing policy, the auto club president noted, "New members often sign-up prior to taking a long road trip, so we have to charge more as first-year members have higher service utilization rates." A similar phenomenon observed in insurance markets is called correct answersAdverse selection Brad owns a building valued at $50,000. Expected value of the loss caused by fire is $5,000. Objective risk(standard deviation) of the loss caused by fire is $15,000. If he pools his risk of loss with 99 other building owners who own identical buildings as he owns, what is his expected value of the loss caused by fire now? correct answers$5,000