Why should we measure loss severity? - ✔✔risk classification
determination of transfer (insurance) amount
Which of the following is a common pre-loss objective? - ✔✔economy
Insurance is a mechanism for managing - ✔✔pu
...
Why should we measure loss severity? - ✔✔risk classification
determination of transfer (insurance) amount
Which of the following is a common pre-loss objective? - ✔✔economy
Insurance is a mechanism for managing - ✔✔pure risk
Risk at the individual level can best be defined as - ✔✔Uncertainty regarding loss
Hazards may be categorized by which of the following groups? - ✔✔Tangible (Physical)
and intangible
Donna has a home that is insured to its maximum value. She often leaves the door
unlocked in case she forgets her keys. She knows that her insurance policy will pay for
any losses if her home is robbed. Which of the following best applies to Donna? -
✔✔moral/morale hazard
The ranking of risks by severity is important because:
I. An idea of severity can help classify risks faced by an organization
II. Severity can help determine the amount of insurance needed
III. Severity can establish how often a risk faced by a company will occur - ✔✔I and II
Which of the following is the last step in the risk management process (but often done
first)? - ✔✔Review and Evaluate
When considering the risk involved in a specific activity, - ✔✔Danger and Risk are not
always correlated
The scientific approach to dealing with risk is called - ✔✔Risk Management
Risk prevention methods are best applied to? - ✔✔high frequency losses
Karen won't allow any of the neighborhood children into her yard because she has a
large swimming pool and doesn't want anyone to fall in, resulting in her being
responsible for the harm of a child. What type of risk is Karen trying to avoid? -
✔✔liability
Which of the following is not a category of risk retention?
[Show More]
