Oklahoma Property and Casualty Insurance Exam With Answers
1. Risk: The chance or uncertainty of loss.
2. Methods of Managing Risk: 1. Avoid risk
2. Control risk
3. Retain a risk
4. Transfer a risk
3. Avoid Risk: Never get into a car.
4. Control Risk: Training workers in the safe use of welding tools, or installing a
sprinkler system in a factory.
5. Retain a Risk: If any loss occurs, people will pay for it themselves.
6. Transfer a Risk: Use a Hold Harmless Agreement.
7. Hold Harmless Agreement (HHA): A contractual agreement where one party
assumes the liability of a situation and relieves the other party of responsibility.
8. Law of Large Numbers: States that the more examples used to develop any
statistic, the more reliable the statistic will be.
9. Speculative Risk: Risks in which there exists both the possibility of gain and the
possibility of loss. (i.e. poker game).
Insurance companies cannot be used to handle these risks.
10. Pure Risk: Risks that involve only the possibility of loss.
Insurance companies can only handle these risks.
11. Insurable Interest: Before you can benefit from insurance, you must have a
chance of financial loss or a financial interest in the property.
12. Other Elements of Insurable Risks: 1. Risk of loss must be definite as to time
and place and difficult to counterfeit or falsify.
2. Risk must be unexpected.
3. Risk must be large enough to create a financial hardship for the individual involved.
4. The loss must be calculable.
5. The cost of the insurance must be affordable to the insured.
6. There must be a large number of persons with a similar potential loss available for
the insurance so that overall, losses become predictable (Law of Large Numbers).
7. The loss must not happen to a large number of insureds at the same time.
13. Peril: The cause of loss.
14. Hazard: Anything that increases the chance of loss.
15. 3 Types of Hazards: 1. Physical
2. Morale
3. Moral
16. Physical Hazard: A hazard that arises form the condition, occupancy, or use of
the property itself (i.e. skateboard left on the porch steps).
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1. Risk: The chance or uncertainty of loss.
2. Methods of Managing Risk: 1. Avoid risk
2. Control risk
3. Retain a risk
4. Transfer a risk
3. Avoid Risk: Never get into a car.
4. Control Risk: Training workers in the safe use of welding tools, or installing a
sprinkler system in a factory.
5. Retain a Risk: If any loss occurs, people will pay for it themselves.
6. Transfer a Risk: Use a Hold Harmless Agreement.
7. Hold Harmless Agreement (HHA): A contractual agreement where one party
assumes the liability of a situation and relieves the other party of responsibility.
8. Law of Large Numbers: States that the more examples used to develop any
statistic, the more reliable the statistic will be.
9. Speculative Risk: Risks in which there exists both the possibility of gain and the
possibility of loss. (i.e. poker game).
Insurance companies cannot be used to handle these risks.
10. Pure Risk: Risks that involve only the possibility of loss.
Insurance companies can only handle these risks.
11. Insurable Interest: Before you can benefit from insurance, you must have a
chance of financial loss or a financial interest in the property.
12. Other Elements of Insurable Risks: 1. Risk of loss must be definite as to time
and place and difficult to counterfeit or falsify.
2. Risk must be unexpected.
3. Risk must be large enough to create a financial hardship for the individual involved.
4. The loss must be calculable.
5. The cost of the insurance must be affordable to the insured.
6. There must be a large number of persons with a similar potential loss available for
the insurance so that overall, losses become predictable (Law of Large Numbers).
7. The loss must not happen to a large number of insureds at the same time.
13. Peril: The cause of loss.
14. Hazard: Anything that increases the chance of loss.
15. 3 Types of Hazards: 1. Physical
2. Morale
3. Moral
16. Physical Hazard: A hazard that arises form the condition, occupancy, or use of
the property itself (i.e. skateboard left on the porch steps).
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