Exam (elaborations)
C12 Property - Ch 1_2 (1)
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C12 Property - Ch 1_2 (1)
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CIP C11 - CHAPTER 01 (PART 1) INTRO TORISK & INSURANCE
What is insurance? - CORRECT ANSWER-A contract between two parties
whereby one party (the insurer) agrees to reimburse the 2nd party (the insured),
upon a monetary consideration, on a defined subject, for losses or liabilities on
losses, occurred due to specified perils
Differentiate between speculative & pure risk - CORRECT ANSWER-Speculative
risk implies either a chance of financial loss or a chance of gain, whereas in pure
risk, there is only the possibility of loss or no loss, but no financial gain at all
What is risk? - CORRECT ANSWER-A chance of loss or gain, involves doubt,
uncertainty
List the 3 types of insurable risk & give examples of each - CORRECT
ANSWER-Personal - the person's own bodily injury or death, physical disability,
loss of wage or unemployment
Property - damage or destruction of items owned by the person, like DIRECT
LOSS (vehicle damaged in collision, house burnt in fire, jewelry stolen) or
INDIRECT LOSS (loss of use of a rental vehicle due to downtime, loss of income
due to closure while in repairs)
Liability - the person's legal obligation to pay damage due to bodily injury, death
of another or damage to another person's property. (Arises from negligence or
legal liability)
What are the classes of General insurance? - CORRECT ANSWER-P&C -
Property & Casualty
What is casualty insurance and what is excluded from casualty insurance? -
CORRECT ANSWER-A blanket term that encompasses subjects other than fire,
automobile and life
Give the types of general insurance sold in Canada - CORRECT
ANSWER-Property, Commercial and Special risks
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