Exam Fx-Property and Casualty Exam
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Terms in this set (117)
Law of Large Numbers The larger the number of people with a similar
exposure to loss, the more predictable actual
losses will be.
Insurance Transfers the risk of loss from an individual or
business entity to an insurance company
The three elements of insurable risk 1) Financial 2) Blood (relative) 3) Business
are
Risk The uncertainty or chance of a loss occurring
Types of risks are 1) Pure risk 2) Speculative risk
What type of risk does insurance Pure risk
cover?
What is pure risk? It can only result in a loss or no change
What type of risk is not insurable? speculative risk
, What is speculative risk? Opportunity for loss or gain. For example,
gambling.
What is a peril? a specific cause of loss
What is a hazard? conditions or situations that increase the
probability of a loss occurring
What is a loss? reduction, decrease or disappearance of value of
the person or property insured.
What is indemnity? provision in an insurance policy that states that in
the event of loss, an insured can only collect to
the extent of the financial loss. The insured is not
allowed to gain financially.
Subrogation insurer's legal right to seek damages from third
parties after it has reimbursed the insured.
Accident The sudden, unplanned and unexpected event
not under the control of the insured. Neither
expected or intended.
Occurrence losses caused by continuous or repeated
exposure to conditions neither intended or
expected.
Direct loss direct, physical damage to buildings and/or
personal property
Indirect Loss (consequential) results of a direct loss
What is the most prevalent indirect Extra living expense that may be incurred by the
loss for homeowners? insured while the home is being repaired.
Questions & Answers | 100% Verified solutions
|Questions with Correct Answers 2026 latest
update!!
Save
Terms in this set (117)
Law of Large Numbers The larger the number of people with a similar
exposure to loss, the more predictable actual
losses will be.
Insurance Transfers the risk of loss from an individual or
business entity to an insurance company
The three elements of insurable risk 1) Financial 2) Blood (relative) 3) Business
are
Risk The uncertainty or chance of a loss occurring
Types of risks are 1) Pure risk 2) Speculative risk
What type of risk does insurance Pure risk
cover?
What is pure risk? It can only result in a loss or no change
What type of risk is not insurable? speculative risk
, What is speculative risk? Opportunity for loss or gain. For example,
gambling.
What is a peril? a specific cause of loss
What is a hazard? conditions or situations that increase the
probability of a loss occurring
What is a loss? reduction, decrease or disappearance of value of
the person or property insured.
What is indemnity? provision in an insurance policy that states that in
the event of loss, an insured can only collect to
the extent of the financial loss. The insured is not
allowed to gain financially.
Subrogation insurer's legal right to seek damages from third
parties after it has reimbursed the insured.
Accident The sudden, unplanned and unexpected event
not under the control of the insured. Neither
expected or intended.
Occurrence losses caused by continuous or repeated
exposure to conditions neither intended or
expected.
Direct loss direct, physical damage to buildings and/or
personal property
Indirect Loss (consequential) results of a direct loss
What is the most prevalent indirect Extra living expense that may be incurred by the
loss for homeowners? insured while the home is being repaired.
