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NJ Casualty Insurance Chapter II Questions and Answers 100% Solved
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NJ Casualty Insurance Chapter II
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NJ Casualty Insurance Chapter IIInsurance – answer transfers the risk loss from an individual or business entity to an
insurance company
insurable interest - answer any interest an insured may have in property that is the
subject of insurance, so that damage or destruction of that property would cause the
insured financial loss
In property and casualty insurance, insurable interest must exist.... - answer at the time
of the loss
risk - answer the chance of loss
pure risk - answer situations that can only result in a loss or no change. there is no
opportunity for financial gain. The only type of insurance companies are willing to
accept. Uncontrollable circumstances.
speculative risk - answerAn uncertainty or chance of a loss occurring in a situation that
involved the opportunity for either loss or gain. Ex: wagering or gambling. these types of
risks are noninsurable
Perils - answersomething that can cause a loss. Ex: falling, crashing your car, fire, hail,
rain, choking
hazards - answereither causes or increases the likelihood of a loss
physical hazard - answerphysical condition that increases the possibility of a loss. Thus,
smoking is a physical hazard that increases the likelihood of a house fire and illness.
moral hazard - answerlie on the application or fraudulent claims
morale - answerit increases the possibility of a loss that results from the insured
worrying less about losses.
Indemnity - answerrefers to reimbursement, insured or beneficiary is permitted to collect
only to the extent of the financial loss, and is not allowed to gain financially because of
the existence of an insurance contract. Meant to restore but not to benefit
subrogation - answerthe insurers right to seek damages from third parties
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