Ar Insurance Exam Property And Casualty

Front 1

Insurance

Back 1

Sharing, spreading, or transferring risk through the accumulation of funds of large numbers of individuals. Giving up a known certain loss in order to avoid a larger potential loss. A contract where one party agrees to indemnify another for a certain stated contingencies

Front 2

Risk

Back 2

Chance of a loss

Front 3

Avoidance

Back 3

Not doing the thing that puts the client at risk. This is often not possible. ex: most adults must drive a car

Front 4

Reduction

Back 4

Reducing the things that make a loss more likely. ex: Correcting conditions on a property that might cause a fire

Front 5

Retention

Back 5

Keeping the risk and not trying to transfer it. ex: Deductible

Front 6

Transfer

Back 6

Risk can be transferred to someone else through contracts

Front 7

Peril

Back 7

The direct cause of a loss

Front 8

Hazard

Back 8

Something that increases the chance of loss

Front 9

Physical Hazards (environmental)

Back 9

Conditions in property (such as faulty wiring) that increase the chance of peril (cause of loss)

Front 10

Morale Hazards

Back 10

An attitude of "not caring" about the property. This attitude makes it more likely for loss to occur

Front 11

Moral Hazards

Back 11

A situation in which someone might illegally try to destroy their own property for financial gain. ex: arson

Front 12

Legal Hazards

Back 12

A court ruling that causes an unexpected liability and the general increased tendency of people to sue. ex: teachers being sued because a child doesn't learn to read

Front 13

Insurable Interest

Back 13

A legitimate financial interest in the life or property being insured for which there is a chance of loss