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RMIN 4000 Test 1 Brown UGA Exam
Questions and Answers 100% Solved
Exposures - ✔✔things of value (assets) that could be lost
Perils - ✔✔things that cause injury or loss
risk - ✔✔a calculated possibility of a negative outcome
Frequency - ✔✔the number of losses (such as fire or theft) that occur
within a specified time period. aka the probability of a loss
Severity - ✔✔the dollar amount of a loss for a specific peril (fire, theft,
collision) aka How much does it cost when the loss does occur?
Hazard - ✔✔a condition that creates or increases the frequency or severity
of loss but does NOT cause the loss.
Physical Hazard - ✔✔a physical condition that increases the frequency or
severity of loss
Moral Hazard - ✔✔the presence of insurance changes the behavior of the
insured. ex: making hail damage to get a check
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Morale hazard (attitudinal hazard) - ✔✔A condition of carelessness or
indifference that increases the frequency or severity of loss.
Legal Hazard - ✔✔characteristics of the legal system or regulatory
environment that increase the frequency or severity of losses
Georgia's Diminution in value is an example of a - ✔✔legal hazard because
it increases the severity on property losses
Pure Risk - ✔✔A chance of loss or no loss, but no chance of gain.
Insurance can be bought for this
Speculative Risk - ✔✔A chance of loss, no loss, or gain.
Diversifiable risk - ✔✔a risk that affects only individuals or small groups
and not the entire economy. It can be eliminated/ reduced through
diversification. the risks are not correlated
Developing cancer or your house being caught on fire are two examples of
what kind of risk? - ✔✔Pure Risk
diversifiable risk - ✔✔A risk that affects only some individuals, businesses,
or small groups. they can be reduced/eliminated through diversification. the
risks are not correlated
RMIN 4000 Test 1 Brown UGA Exam
Questions and Answers 100% Solved
Exposures - ✔✔things of value (assets) that could be lost
Perils - ✔✔things that cause injury or loss
risk - ✔✔a calculated possibility of a negative outcome
Frequency - ✔✔the number of losses (such as fire or theft) that occur
within a specified time period. aka the probability of a loss
Severity - ✔✔the dollar amount of a loss for a specific peril (fire, theft,
collision) aka How much does it cost when the loss does occur?
Hazard - ✔✔a condition that creates or increases the frequency or severity
of loss but does NOT cause the loss.
Physical Hazard - ✔✔a physical condition that increases the frequency or
severity of loss
Moral Hazard - ✔✔the presence of insurance changes the behavior of the
insured. ex: making hail damage to get a check
, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Morale hazard (attitudinal hazard) - ✔✔A condition of carelessness or
indifference that increases the frequency or severity of loss.
Legal Hazard - ✔✔characteristics of the legal system or regulatory
environment that increase the frequency or severity of losses
Georgia's Diminution in value is an example of a - ✔✔legal hazard because
it increases the severity on property losses
Pure Risk - ✔✔A chance of loss or no loss, but no chance of gain.
Insurance can be bought for this
Speculative Risk - ✔✔A chance of loss, no loss, or gain.
Diversifiable risk - ✔✔a risk that affects only individuals or small groups
and not the entire economy. It can be eliminated/ reduced through
diversification. the risks are not correlated
Developing cancer or your house being caught on fire are two examples of
what kind of risk? - ✔✔Pure Risk
diversifiable risk - ✔✔A risk that affects only some individuals, businesses,
or small groups. they can be reduced/eliminated through diversification. the
risks are not correlated
