Chapter 1

property damage is usually what kind of damage
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Terms in this set (35)
property damage is usually what kind of damage
fire
what word describes casualty insurance
miscellaneous
insurance company
insurer
policy holder
insured
agent
producer
agent/producer
a legal representative of an insurance company
broker
represents the insured
risk
the chance of loss or uncertainty of loss
two types of risk
pure and speculative
speculative risk
a chance of loss with the hope/possibility of gain
example of speculative riskgamblingpure riskchance of loss with out the chance of gainrisk management techniquesrisk avoidance, risk reduction, risk shifting, risk retention, buying insurancerisk avoidancenot doing the risky taskrisk reductiondoing the risky task with precautionsrisk retention"going bare" willing to pay the pricedefinition of insurance.contract where and insurer agrees to protect an insured against injury, damage, or liability arising from some future event.definition of insurance..is the transfer of risk..definition of insurancesocial device which individuals, by paying a premium fee, transfer a defined and limited portion of the risk to an insurance companyPrinciple of insuranceclient agrees to small immediate loss to avoid larger future lossIndemnificationconcept that an insurance policy is meant to make the insured whole (break even)Law of Large Numberseasier to predict losses based on a history if we have a higher numbertypes of insurersstock, mutual, reciprocal, fraternal, governmentstock companiescompanies owned by stockholders, non-participating, board of directors (elected by shareholder) appoints officers to manage the companymutual companiescompanies owned by the policy holders, participating, board of directors (elected by policy holders) mange the companyreciprocal companies.cooperative companies.reciprocal/cooperative companiesgroup of affiliated policy holders who agree on indemnificationattorney-in-factperson who manages reciprocal companiesfraternal benefit societiesformed to sell insurance to policyholders with common ethnic/religious beliefsfederal government gives insurance to what group of peopleveteransfederal government deals withflood, crop, workers comp, and saving insuranceinsurance is regulated bystate governmentswho writes the statues or bigger laws for insurancestateNational Association of Insurance Commissioners (NAIC)group of people who know the ins and outs of insurance and help the commissioner of the state amended the lawsinsurance coverspure but not speculative risk