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RMI 3011: Exam 1 RMI 3011 Florida State University -Questions with complete solution $13.49   Add to cart
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RMI 3011: Exam 1 RMI 3011 Florida State University -Questions with complete solution

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RMI 3011: Exam 1 RMI 3011 Florida State University -Questions with complete solution Insurance - correct answer -Device for the transfer and pooling of risks -A known small loss (premium payment) replaces a possible unknown large loss Risk - correct answer possibility of loss Peril - c...

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  • November 30, 2024
  • 13
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • rmi 3011 exam 1
  • rmi 3011 exam 1 questions with complete solution
  • rmi 3011 exam 1 rmi 3011 florida state university

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RMI 3011: Exam 1 Questions with
complete solution
Insurance - correct answer ✔-Device for the transfer and pooling of risks
-A known small loss (premium payment) replaces a possible unknown large
loss


Risk - correct answer ✔possibility of loss


Peril - correct answer ✔-Cause of loss


Ex: Death, Disability, Collision, Fire, Legal liability


Hazard - correct answer ✔- condition that increases the likelihood of loss or
increases the size of the loss if a peril occurs


Physical Hazard - correct answer ✔-physical condition, such as ice on
sidewalks


Moral Hazard - correct answer ✔-A dishonest tendency on the part of the
person exposed to loss


Morale Hazard - correct answer ✔-indifference on the part of the person
exposed to loss as to whether a loss occurs and/or the size of the loss


Ex: Sloppy housekeeping, speeding

, Chain of Events - correct answer ✔Hazard->Peril->Loss


Pothole->Collision->Damage to car


Skydiving->Defective equipment->Lost income


Law of Large Numbers - correct answer ✔-The more units exposed to loss,
the greater will be the predictability of future loss results


For insurance to work well, the insurer needs a large number of similar
(homogenous) exposure units


Adverse Selection - correct answer ✔The tendency of poorer-than-average
risks or less-than-desirable entities to seek insurance to a greater extent than
do better risks


-Selection against the insurance company


Ex: People with poor health seek life insurance


Insurable risk or loss exposure (characteristics) - correct answer ✔-Large
number of individuals or exposure units subject to loss
-Losses definite and measurable
-Probable loss frequency and severity calculable
-No incalculable catastrophe potential

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