STATE FARM INSURANCE EXAM WITH ACCURATE
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DETAILED SOLUTIONS ||
What transfers the risk of loss from an individual or business entity to an insurance
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company - ✔✔Insurance || ||
The uncertainty of a risk or loss occurring - ✔✔risk
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A risk that can only result in a loss or no change with no opportunity for financial gain -
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✔✔pure risk ||
A risk that allows an opportunity for loss or gain (such as gambling) - ✔✔speculative risk
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CONDITIONS or SITUATIONS that increase the chance of a loss occurring (such as
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lifestyle, health conditions, scuba diving, sky diving) - ✔✔hazards
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The CAUSES of loss...(like fire, explosion, windstorm, flood, theft, collision) - ✔✔perils
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insurance for an untimely death (died from heart attack) - ✔✔life insurance
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insurance for sickness or accidental injury (got cancer or broken bones) - ✔✔health
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insurance
insurance for the loss of physical property (wind storm damaged the house) - ✔✔property
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insurance
, insurance for the loss or damage of property and resulting liabilities (guy fell off the ladder
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while working on the roof) - ✔✔casualty insurance
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the reduction, decrease or disappearance of value from the person or property insured. -
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✔✔loss
a method used to transfer the loss from the person or property to the insurance company -
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✔✔insurance
A unit of measurement used for determining rates charged for certain coverages
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(insurances) - ✔✔exposure || ||
you decide not to fly in an airplane because it's too dangerous so you AVOID it. This is
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called risk - ✔✔avoidance || || ||
to reduce expenses and cash flow, increase control of claim settlements, and to fund losses
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that can't be insured are called risk - ✔✔retention
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dealing with risk for a group of individuals that have the same type of exposure to loss is
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called risk - ✔✔sharing || || ||
installing smoke detectors, having annual physicals, and lifestyle changes all reduce the
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chance of loss. This is called risk - ✔✔reduction
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The most effective way to handle risk so a loss becomes the responsibility of the insurance
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company is called (pass the responsibility to someone else) - ✔✔transfer
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Losses due to chance, that are definite and measurable, that are predictable, and that are
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not catastrophic are called ELEMENTS OF INSURABLE - ✔✔risks
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DETAILED SOLUTIONS ||
What transfers the risk of loss from an individual or business entity to an insurance
|| || || || || || || || || || || || || || ||
company - ✔✔Insurance || ||
The uncertainty of a risk or loss occurring - ✔✔risk
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A risk that can only result in a loss or no change with no opportunity for financial gain -
|| || || || || || || || || || || || || || || || || || ||
✔✔pure risk ||
A risk that allows an opportunity for loss or gain (such as gambling) - ✔✔speculative risk
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CONDITIONS or SITUATIONS that increase the chance of a loss occurring (such as
|| || || || || || || || || || || || ||
lifestyle, health conditions, scuba diving, sky diving) - ✔✔hazards
|| || || || || || || ||
The CAUSES of loss...(like fire, explosion, windstorm, flood, theft, collision) - ✔✔perils
|| || || || || || || || || || ||
insurance for an untimely death (died from heart attack) - ✔✔life insurance
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insurance for sickness or accidental injury (got cancer or broken bones) - ✔✔health
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insurance
insurance for the loss of physical property (wind storm damaged the house) - ✔✔property
|| || || || || || || || || || || || || ||
insurance
, insurance for the loss or damage of property and resulting liabilities (guy fell off the ladder
|| || || || || || || || || || || || || || || ||
while working on the roof) - ✔✔casualty insurance
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the reduction, decrease or disappearance of value from the person or property insured. -
|| || || || || || || || || || || || || ||
✔✔loss
a method used to transfer the loss from the person or property to the insurance company -
|| || || || || || || || || || || || || || || || ||
✔✔insurance
A unit of measurement used for determining rates charged for certain coverages
|| || || || || || || || || || || ||
(insurances) - ✔✔exposure || ||
you decide not to fly in an airplane because it's too dangerous so you AVOID it. This is
|| || || || || || || || || || || || || || || || || ||
called risk - ✔✔avoidance || || ||
to reduce expenses and cash flow, increase control of claim settlements, and to fund losses
|| || || || || || || || || || || || || || ||
that can't be insured are called risk - ✔✔retention
|| || || || || || || ||
dealing with risk for a group of individuals that have the same type of exposure to loss is
|| || || || || || || || || || || || || || || || || ||
called risk - ✔✔sharing || || ||
installing smoke detectors, having annual physicals, and lifestyle changes all reduce the
|| || || || || || || || || || || ||
chance of loss. This is called risk - ✔✔reduction
|| || || || || || || ||
The most effective way to handle risk so a loss becomes the responsibility of the insurance
|| || || || || || || || || || || || || || || ||
company is called (pass the responsibility to someone else) - ✔✔transfer
|| || || || || || || || || ||
Losses due to chance, that are definite and measurable, that are predictable, and that are
|| || || || || || || || || || || || || || ||
not catastrophic are called ELEMENTS OF INSURABLE - ✔✔risks
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