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Related Flashcards
Related Topics
Cards In This Set
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Define: Insurance
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A contract that indemnifies another against loss, damage or liability from an unknown event.
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Define: Policy
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Legal contract
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What is Pure Risk?
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Circumstances were there is a chance of loss - the loss may or may not happen - and there is no possibility for gain.
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What is Speculative Risk?
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Circumstances that involve both an uncertainty of loss and of gain.
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Define: Risk
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The uncertainty of financial loss, or the chance of loss, when more than one outcome is possible.
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Define: Insured
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The person who is covered by the insurance
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Define: Loss
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The reduction in the value of an asset.
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Define: Claim
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The demand for payment of the insurance benefit to the person named in the policy.
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Define: Policy owner
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The individual being insured.
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Define: Premium
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A set amount of money paid to the insurance company.
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Define: Insurer
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The insurance company.
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Define: Insured
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The person who is covered by the insurance.
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What are the two types of Risk?
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What are Perils and hazards?
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They are factors that cause or give rise to risk.
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Define: Peril
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Is the immediate specific event causing loss and giving rise to risk. i.e. When a building burns, fire is the peril.
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