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RMIN 4000 Brown UGA Test 1 Exam Questions and Answers 100% Solved

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RMIN 4000 Brown UGA Test 1 Exam Questions and Answers 100% Solved Frequency - How often does a loss occur? The number of losses (such as fire, theft, collision) that occur within a specified time period probability of a loss severity - How much does it cost when a loss does occur? The dollar...

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  • September 27, 2024
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RMIN 4000 Brown UGA Test 1 Exam

Questions and Answers 100% Solved


Frequency - ✔✔How often does a loss occur?

The number of losses (such as fire, theft, collision) that occur within a

specified time period

probability of a loss

severity - ✔✔How much does it cost when a loss does occur?

The dollar amount of loss for a specific peril (fire, theft, collision)

Peril - ✔✔cause of a loss



Ex. fire, tornado, collision, burglary

hazard - ✔✔condition that creates or increases the frequency and/or

severity of a loss

physical hazard - ✔✔a physical condition that increases the frequency

and/or severity of a loss

moral hazard - ✔✔dishonesty or character defects in an individual that

increase the frequency and/or severity of a loss

,presence of insurance changes the behavior of the insured



Ex. using a hammer to create "hail" damage to a roof

morale hazard - ✔✔carelessness or indifference to a loss, which increases

the frequency and/or severity of a loss



ex. leaving keys in an unlocked car

personal risk - ✔✔directly affects an individual or family; involve the

possibility of loss of income, extra expenses, depletion of financial assets



ex. death, unemployment, disability/injury/ poor health, inadequate

retirement income

direct loss - ✔✔cost to repair or replace property damaged by a peril

indirect loss - ✔✔financial loss resulting as a consequence of a direct loss



ex. fire damages your home, you have to live somewhere else while its

repaired

, risk management - ✔✔process that identifies loss exposures faced by an

organization and selects the most appropriate techniques for treating such

exposures

loss exposure - ✔✔any situation or circumstance in which a loss is

possible, regardless of whether a loss actually occurs

maximum possible loss - ✔✔worst loss that could happen to a firm during

its lifetime

probable maximum loss - ✔✔the worst loss that is likely to happen

risk control - ✔✔techniques that reduce the frequency or severity of losses

avoidance - ✔✔a certain loss exposure is never acquired or an existing

loss exposure is abandoned

frequency reduced to zero

disadvantages:

may not be possible

usually has an opportunity cost

avoiding one loss exposure may create another

loss prevention - ✔✔measures that reduce the frequency of a particular

loss

does not completely eliminate risk

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