Understanding Risk

The chance of loss with no chance for gain

• personal risk

• property risk

• pure risk

• liability risk

Which of these are examples of pure risk (more than one):

• Accidents resulting in physical injury and property damage

• Acts of nature, resulting in injury and property damage

• Illnesses that people get through life

________ risk- is the chance of loss involving your income and standard of living.

Insurance is...

• A method for spreading individual risk among a large group of people to make losses more affordable for all

• A table of premium rates based on ages and life expectancy.

• The chance of loss involving your income and standard of living.

• The person/company protected against loss.

pure risk involves the possibility of _______________ or _________________________________

A contract between the insurance company and the insured that states the exact terms of the policy including what risks are covered and how much will be paid for any losses.

• policy

• premium

• insurance

The out-of-pocket money paid by the policyholder before an insurance company will cover the remaining costs attributed the to the loss.

• co-insurance

• deductible

• claim

Provides payments for both liability and property insurance on a vehicle.

• Homeowners insurance

• Renters insurance

• Automobile insurance

Unemployment insurance helps protect you when you get an illness.

• True

• False

What are 2 of the stages of economic expansion

• growth

• decline

• recovery