Anconditionnornsituationnthatnpresentsnanpossibilitynofnlossnisnan(an):
exposure
Thenpurposenofninsurancenisnto:
transfernrisk
Whichnhazardncannbendescribednasnancarelessnattitudenorngeneralnindifferencenonnth
enpartnofntheninsuredntowardnthenoccurrencenofnloss?
morale
Whichnrisknisninsurable?
pure
Withnregardntoninsurance,nriskncannbendefinednas:
uncertaintynregardingnloss
Treatingnrisknbynpurchasingninsurancenisnannexamplenofnwhatntypenofnrisknmanagement
?
transfer
RobertnandnCarolynnliveninnanbusyncitynandndecidenthatnnotnowningnancarnisnthensolu
tionntonnotnexperiencenhavingnancarnstolen.nWhatnmethodndescribesnthisnphilosoph
y?
avoidance
Dishonestynonnthenpartnofnanninsurednisnannexamplenofnwhat?
anmoral nhazard
Whatnisnannexamplenofnreductionnasnanmethodnofnhandlingnrisk?
Installingnanburglarnalarm
Drivingntoonfastnandnnotnwearingnanseatnbeltnarenexamplesnof?
moralenhazard
Thenrisknthatninvolvesnthenchancenofnbothnlossnandngainnis?
,speculativenrisk
Self-insurancenisnannexamplenofnwhatnkindnofnriskntreatment?
Retention
IfnJohn'snfatherntransfersnownershipnofnanhousentonJohn,ncannJohnnbuyninsurance?
Yesnbecausenhenhasnanninsurableninterest.nF
irenwouldnbenannexamplenofnanwhat?nperil
Whatnisnthenactualncausenofnanloss?
peril
Whatnkindnofnrisknisnthenstocknmarket?
speculativenrisk
An isnanconditionnthatnincreasesnthenchancenofnloss.
hazard
Faultynwiringncausesnanfirenthatndestroysnanbuilding.nThenfaultynwiringnisnconsidere
dntonbena(n):
hazard
Anchance,npossibility,nornuncertaintynofnlossnisnknownnas?
risk
Examplesnofnperilsnare ?
fire,nwindnandnlightning
Indemnityninsurancenwilln
?nre
storesninsuredntonpre-
lossncondition nThentypesnofnhazardsn
are
?nm
oral,nmorale,nandnphysical
isnwhennpeoplenwithnangreaternthannaveragenexposurentonlossnton
purchaseninsurance.
Adversenselection
Methodsnofnhandlingnrisknarenavoidance,nreduction,nretention,ntransfernandn .
,Sharingn(ARRTS)
Elementsnofninsurablenrisknarencalculable,naffordable,nnon-
catastrophic,nhomogenous,naccidentalnandn .
Measurablen(CANHAM)
Myron,nwhonisn16,nsignsnancontractntonleasenancar.nThisnwouldnprobablynnotnben
considerednanvalidncontractnundernthenlaw nbecausen .
Henisnnotncompetentnatn16.
Bennboughtnannautomobilenfournyearsnagonforn$15,000.nTodaynitnisnworthn$6,000.nA
ccordingntonthenprinciplenofnindemnity,nhow nmuchnshouldnBennreceivenifnthencarnisnt
otallyndemolished?
$6,000
HarrynArnenandnhisncousinneachnownn50%nofnan$160,000nduplex.nSupposenHarrynpu
rchasesn$160,000nofninsurancenonnthenhome.nIfnitnburnsntonthenground,nhow nmuchn
wouldnHarryncollect?
$80,000
Undernanunilateralncontract,nwhichnpartiesnarenlegallynboundntonperformnundernthencontr
act?
Insurernonly
Whichnpartnofnanninsurancenpolicyndescribesnthenresponsibilitiesnandnobligationsno
fnbothntheninsurancencompanynandntheninsurednundernthenpolicy?
Conditions
Theninsuringnagreementnsectionnofnanpolicyndescribesnthen
younareninsured
against.
n
perils
Thenelementsnofnanvalidncontractnarenlegalnpurpose,nconsideration,ncompetentn
parties,nandn .
Offernandnacceptance
Bothnpartiesnrelynonnstatementsnmadentoneachnothernwhennwritingnancontract.nThisni
snknownnas?
Utmostngoodnfaith
Thenlimitsnofnliabilitynarenfoundninnwhichnofnthenfollowingnsectionsnofnancasualtynpoli
cy?
, Declarations
Anninsurancencompanynissuednanhomeownersnpolicynthatnincludednambiguousnlan
guagenregardingnhow nanlossnwasnsettled.nTheninsurednsuedntheninsurancencompany
nand nwon.nThenjudgenstated nthatnduento nthenambiguous nlanguage nin nthencontractnthe
ndecision nmustnbenmadenin nfavornofntheninsured.nThenjudge nwasnbasing nthisndecision
non nwhich nofnthenfollowing ntypesnofninsurance ncontract?
Contractnof nadhesion
Anpolicynmaynbenamendednonlynwithna(n):
endorsement
Thenprocedurenfornresolvingnandisagreementnbetweennanninsurednandnann insurance
ncompanynaboutnanlossnisndescribed nin nwhich nofnthenfollowing npartsnofnan ninsurancen
policy?
Conditions
Whondoesnanpersonalncontractnprotect?
Thenindividual nwhonownsnthenproperty.
Whichnonenofnthenfollowingntermsnindicatesnthatnanninsurancencontractncontainsnth
enenforceablenpromisesnofnonlynonenparty?
Unilateral
Thenprinciplenthatnrestoresnsomeonentonthenconditionnhenenjoyednbeforenanlossn
is ?
indemnity
Brycenownsnan$50,000nlakencabinnthatnhenhasninsurednforn$40,000.nHensustainsna
$5,000ncoverednloss.nAccordingntonthenprinciplenofnindemnity,nhow nmuchnwillnhisninsur
ernpay?
$5000
Then
pageninnanninsurancencontractncontainsninformationnaboutnthenrisk,nthen
effectivendatenofncoverage,ndeductible,npremiumnamounts,ncoinsurancenpercenta
ge,nandnlocationnofntheninsurednproperty.
Declarations
Thenattemptntonrestorenanninsuredntonhisnpre-lossnconditionnisnknownnasn .
indemnification
Theninsurednisnlookingnfornthenamountnofncoverageninnanpropertynandncasualtyn
policy.nThisninformationnwouldnbenfoundninnthen .
exposure
Thenpurposenofninsurancenisnto:
transfernrisk
Whichnhazardncannbendescribednasnancarelessnattitudenorngeneralnindifferencenonnth
enpartnofntheninsuredntowardnthenoccurrencenofnloss?
morale
Whichnrisknisninsurable?
pure
Withnregardntoninsurance,nriskncannbendefinednas:
uncertaintynregardingnloss
Treatingnrisknbynpurchasingninsurancenisnannexamplenofnwhatntypenofnrisknmanagement
?
transfer
RobertnandnCarolynnliveninnanbusyncitynandndecidenthatnnotnowningnancarnisnthensolu
tionntonnotnexperiencenhavingnancarnstolen.nWhatnmethodndescribesnthisnphilosoph
y?
avoidance
Dishonestynonnthenpartnofnanninsurednisnannexamplenofnwhat?
anmoral nhazard
Whatnisnannexamplenofnreductionnasnanmethodnofnhandlingnrisk?
Installingnanburglarnalarm
Drivingntoonfastnandnnotnwearingnanseatnbeltnarenexamplesnof?
moralenhazard
Thenrisknthatninvolvesnthenchancenofnbothnlossnandngainnis?
,speculativenrisk
Self-insurancenisnannexamplenofnwhatnkindnofnriskntreatment?
Retention
IfnJohn'snfatherntransfersnownershipnofnanhousentonJohn,ncannJohnnbuyninsurance?
Yesnbecausenhenhasnanninsurableninterest.nF
irenwouldnbenannexamplenofnanwhat?nperil
Whatnisnthenactualncausenofnanloss?
peril
Whatnkindnofnrisknisnthenstocknmarket?
speculativenrisk
An isnanconditionnthatnincreasesnthenchancenofnloss.
hazard
Faultynwiringncausesnanfirenthatndestroysnanbuilding.nThenfaultynwiringnisnconsidere
dntonbena(n):
hazard
Anchance,npossibility,nornuncertaintynofnlossnisnknownnas?
risk
Examplesnofnperilsnare ?
fire,nwindnandnlightning
Indemnityninsurancenwilln
?nre
storesninsuredntonpre-
lossncondition nThentypesnofnhazardsn
are
?nm
oral,nmorale,nandnphysical
isnwhennpeoplenwithnangreaternthannaveragenexposurentonlossnton
purchaseninsurance.
Adversenselection
Methodsnofnhandlingnrisknarenavoidance,nreduction,nretention,ntransfernandn .
,Sharingn(ARRTS)
Elementsnofninsurablenrisknarencalculable,naffordable,nnon-
catastrophic,nhomogenous,naccidentalnandn .
Measurablen(CANHAM)
Myron,nwhonisn16,nsignsnancontractntonleasenancar.nThisnwouldnprobablynnotnben
considerednanvalidncontractnundernthenlaw nbecausen .
Henisnnotncompetentnatn16.
Bennboughtnannautomobilenfournyearsnagonforn$15,000.nTodaynitnisnworthn$6,000.nA
ccordingntonthenprinciplenofnindemnity,nhow nmuchnshouldnBennreceivenifnthencarnisnt
otallyndemolished?
$6,000
HarrynArnenandnhisncousinneachnownn50%nofnan$160,000nduplex.nSupposenHarrynpu
rchasesn$160,000nofninsurancenonnthenhome.nIfnitnburnsntonthenground,nhow nmuchn
wouldnHarryncollect?
$80,000
Undernanunilateralncontract,nwhichnpartiesnarenlegallynboundntonperformnundernthencontr
act?
Insurernonly
Whichnpartnofnanninsurancenpolicyndescribesnthenresponsibilitiesnandnobligationsno
fnbothntheninsurancencompanynandntheninsurednundernthenpolicy?
Conditions
Theninsuringnagreementnsectionnofnanpolicyndescribesnthen
younareninsured
against.
n
perils
Thenelementsnofnanvalidncontractnarenlegalnpurpose,nconsideration,ncompetentn
parties,nandn .
Offernandnacceptance
Bothnpartiesnrelynonnstatementsnmadentoneachnothernwhennwritingnancontract.nThisni
snknownnas?
Utmostngoodnfaith
Thenlimitsnofnliabilitynarenfoundninnwhichnofnthenfollowingnsectionsnofnancasualtynpoli
cy?
, Declarations
Anninsurancencompanynissuednanhomeownersnpolicynthatnincludednambiguousnlan
guagenregardingnhow nanlossnwasnsettled.nTheninsurednsuedntheninsurancencompany
nand nwon.nThenjudgenstated nthatnduento nthenambiguous nlanguage nin nthencontractnthe
ndecision nmustnbenmadenin nfavornofntheninsured.nThenjudge nwasnbasing nthisndecision
non nwhich nofnthenfollowing ntypesnofninsurance ncontract?
Contractnof nadhesion
Anpolicynmaynbenamendednonlynwithna(n):
endorsement
Thenprocedurenfornresolvingnandisagreementnbetweennanninsurednandnann insurance
ncompanynaboutnanlossnisndescribed nin nwhich nofnthenfollowing npartsnofnan ninsurancen
policy?
Conditions
Whondoesnanpersonalncontractnprotect?
Thenindividual nwhonownsnthenproperty.
Whichnonenofnthenfollowingntermsnindicatesnthatnanninsurancencontractncontainsnth
enenforceablenpromisesnofnonlynonenparty?
Unilateral
Thenprinciplenthatnrestoresnsomeonentonthenconditionnhenenjoyednbeforenanlossn
is ?
indemnity
Brycenownsnan$50,000nlakencabinnthatnhenhasninsurednforn$40,000.nHensustainsna
$5,000ncoverednloss.nAccordingntonthenprinciplenofnindemnity,nhow nmuchnwillnhisninsur
ernpay?
$5000
Then
pageninnanninsurancencontractncontainsninformationnaboutnthenrisk,nthen
effectivendatenofncoverage,ndeductible,npremiumnamounts,ncoinsurancenpercenta
ge,nandnlocationnofntheninsurednproperty.
Declarations
Thenattemptntonrestorenanninsuredntonhisnpre-lossnconditionnisnknownnasn .
indemnification
Theninsurednisnlookingnfornthenamountnofncoverageninnanpropertynandncasualtyn
policy.nThisninformationnwouldnbenfoundninnthen .
