Term
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Definition
| Uncertainty with respect to possible losses. Inability to determine the actual number and value of claims |
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Term
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Definition
Risk-uncertainty concerning loss
Peril- cause of loss
Hazard-condition that increases the probibility that a peril will occur-tend to increase loss |
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Term
| Physical, Moral, Morale Hazard |
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Definition
Physical-condition such as wires
Moral-Dishonesty
Morale-Carelessness,indefference |
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Term
Pure Risk
Spectulative Risk |
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Definition
Pure Risk-will or will not happen
Spectulative-loss, no loss, or gain
Most important is Pure Risk--personal risk with benefit plans |
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Term
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Definition
Avoidance (Is mutually exclisive of others)
Control
Retention
Transfer
Insurance |
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Term
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Definition
Insurance is pure risk
Gambling is spectulative risk |
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Term
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Definition
| Placed in somewhat the same situation that existed prior to the loss |
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Term
| Insurance Advantages/disadvantages |
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Definition
Known premium,
Outside Admin.
Financial Backing
Disadvantage--possible added costs and employee satisfaction low |
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Term
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Definition
Large number of units,
Loss verifiable and measurable(not catastrophic)
Loss subject to calculation
Reasonable premium
Loss accidential
(Catastrophic not and important consideration sice low prob) |
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Term
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Definition
| The greater the number of exposures, the more likely the actual results will approach the probable results |
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Term
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Definition
When individuals with a higher that average risk join the group, undewriters address problem by pre-existing clauses, certain loss exclusions,
Group technique controls problem |
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Term
| Group Technique the min. Risk of Adverse Selection |
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Definition
Only certain group eligible
Steady flow of lives
Min number of persons
Min portion of group must participate
Elig, requirements
Max limits
Auto determination of benefits |
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