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Exam (elaborations)

Missouri Property and Casualty Insurance Exam Questions and Answers
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  • Module
  • Missouri Property and Casualty Insurance
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  • Missouri Property And Casualty Insurance

Risk - ANSWER-The chance or uncertainty of loss. Exposure - ANSWER-A condition or situation that presents a possibility of loss. Ways to manage risk - ANSWER-Avoid Risk control risk retain a risk transfer a risk control risk - ANSWER-techniques that limit loss severity come under the he...

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  • May 18, 2024
  • 23
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

Subjects

  • missouri property and casualty insurance exam ques
  • missouri property and casualty insurance stuvia
  • risk answer the chance or uncertainty of loss

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  • Missouri Property and Casualty Insurance
  • Missouri Property and Casualty Insurance

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Missouri Property and Casualty
Insurance Exam Questions and Answers


Risk - ANSWER-The chance or uncertainty of loss.



Exposure - ANSWER-A condition or situation that presents a possibility of loss.



Ways to manage risk - ANSWER-Avoid Risk

control risk

retain a risk

transfer a risk



control risk - ANSWER-techniques that limit loss severity come under the heading of
risk reduction



retain a risk - ANSWER-if any loss occurs, they will pay for it themselves

can be intentional or unintentional



Transfer a risk - ANSWER-Insurance

hold harmless agreement



hold harmless agreement - ANSWER-a contractual arrangement where one party
assumes the liability of a situation and relieves the other party of responsibility.



Purpose of Insurance - ANSWER-to transfer risk



insurance - ANSWER-a contract or device for transferring risk from a person, business,
or organization to an insurance company that agrees, in exchange for a premium, to
pay for losses through an accumulation of premiums

,Elements of Insurability - ANSWER-Pure Risk

Insurable Interest

Definite

Unexpected

Financial Hardship

Calculable

Affordable

Losses are Predictable

Adequate Spread of Risk



Speculative risks - ANSWER-risks in which there exists both the possibility of gain and
the possibility of loss



pure risks - ANSWER-involve only the possibility of loss



insurable interest - ANSWER-before you can benefit from insurance, you must have a
chance of financial loss or a financial interest in the property



Definite - ANSWER-Risk of loss must be defined as to time and loss and be difficult to
counterfeit or falsify



Unexpected - ANSWER-If results are expected then it doesn't qualify as a risk.



Financial Hardship - ANSWER-Risk must be large enough for financial hardship for the
individual involved.



Calculable - ANSWER-Must be able to be assigned a financial value.



Affordable - ANSWER-The cost of the insurance must be affordable to the consumer
and be able to cover an unexpected loss.

, Losses are Predictable - ANSWER-There must be a large number of persons with
similar potential loss available for the losses to become predictable.



Adequate spread of risk - ANSWER-Must not happen to a large number of the insured
at the same time. Not insuring every person that would be effected by the same risk.



Peril - ANSWER-the cause of loss



Hazard - ANSWER-anything that increases the chance of loss



physical hazard - ANSWER-a hazard that arises from the condition, occupancy, or use
of the property itself



morale hazard - ANSWER-an individual, through carelessness or by irresponsible
actions, can increase the possibility for a loss



moral hazard - ANSWER-a person might create a loss situation on purpose just to
collect from the insurance company



contract - ANSWER-legal agreement between two competent parties that promises a
certain performance in exchange for a certain consideration



Elements of a Valid Contract - ANSWER-Competent parties

Legal purpose

Offer and acceptance (agreement)

consideration



Competent Parties - ANSWER-a person who is a minor, insane, or under the influence
of alcohol or drugs is considered incompetent.

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