Explain each of the characteristics of an insurable risk

Assignment Help Financial Management

Reference no: EM133475257

Assignment: Introduction to Risk Management and Insurance- Basic Concepts in Insurance Paper

Chapter 2

Define the following terms in the context of risk management and insurance

1. Insurance
2. Law of large numbers
3. Indemnification
4. Insurable risk
5. Adverse selection
6. Hedging
7. Social insurance
8. Personal lines insurance
9. Commercial lines insurance

Questions to briefly answer (Ch 2)

Question 1. Does your definition of insurance in a. above have all four characteristics of insurance? List any characteristics of insurance that your definition of insurance does not have.

Question 2. List and briefly explain each of the characteristics of an insurable risk.

Question 3. Briefly explain in your own words why the law of large numbers is important in insurance.

Question 4. Briefly explain in your own words why adverse selection becomes a problem to insurers.

Question 5. List five benefits of insurance to society. Pick one benefit that, you think, is the most important benefit. Why?

Question 6. Among those costs presented in the book, Pick one cost that, you think, is the most significant cost of insurance to society. Why?

Chapter 9

Define the following terms in the context of risk management and insurance

1. Actual cash value
2. Valued policy law
3. Insurable interest
4. Implied authority
5. Estoppel

Questions to briefly answer (Ch 9)

Question 1. Briefly explain the following legal principles inyour own words.

a. Principle of Indemnity
b. Principle of Insurable Interest
c. Principle of Subrogation
d. Principle of Utmost Good Faith

Question 2. Explain why an insurance contract is called a(n)

a. aleatory contract
b. unilateral contract
c. personal contract
d. conditional contract
e. contract of adhesion

Question 3. Briefly evaluate an insurance contract as a legally enforceable contract.

Chapter 10

Define the following terms in the context of risk management and insurance

1. Insuring agreement
2. Insured
3. Endorsement
4. Aggregate deductible
5. Excess insurance
6. Coordination of benefits

Questions to briefly answer (Ch 10)

Question 1. List six basic parts of an insurance contract.

Question 2. Articulate theCoinsurance provision.(Note: This is one of the most important concepts in insurance, especially in health insurance and property insurance.)

Question 3. Briefly explain an Insured in an insurance contract?

Question 4. What is the purpose of the Other Insuranceprovision in an insurance contract?

Question 5. List and briefly explain different types of Other Insurance Provisions. (Note: This is one of the most important insurance provisions.)

Question 6. Assume that JP runs the general merchandise wholesale business in his owned warehouse. He wants to insure it for $1,000,000. His insurance agent places $500,000 of insurance with Insurer A, $300,000 with Insurer B, and $200,000 with Insurer C, for a total of $1,000,000. If a $300,000 loss occurs and all three insurers agree to cover the loss on a pro rata basis, show how much each insurer pays for the loss to JP.

Question 7. If three insurers agree to cover the loss bycontribution by equal shares, show how much each insurer pays for the loss to JP.

Reference no: EM133475257

Questions Cloud

Expenses incurred in connection with the sale : Expenses incurred in connection with the sale were deducted on the Form 706 filed by Sarah's estate

Manage expectations and equity around merit and equity : From an employer perspective, how do you manage expectations and equity around merit and equity?

Is it ethical to allow companies choices to value inventory : Is it ethical to allow companies choices to value inventory differently for accounting purposes when the public does not understand the influence

How house bill 2010 affect language acquisition methodology : Explain how house bill 2010 affect language acquisition methodology, student grouping, and the time frame to achieve language proficiency?

Explain each of the characteristics of an insurable risk : INS 340- Briefly explain each of the characteristics of an insurable risk. Briefly explain in your own words why law of large numbers is important in insurance.

Contrast the worldview of the religious right : Compare/Contrast the worldview of the Religious Right, at the time of its founding, to your current worldview.

How did these ties impact you personally and professionally : How did these ties impact you personally and/or professionally? Explain. - analyze these and other benefits of their networks in more depth.

Auditing proposal presentation with your financial analysis : Create a 10- to 15-slide auditing proposal presentation with your financial analysis and recommendations

Describe what las vegas and the rest of the state : Describe what Las Vegas and the rest of the state would be like economically, politically and culturally given this hypothetical

User Account

All Pages