Risk Management and Insurance

Noah owns a small business and he wants to transfer the risk of financial loss to someone else. Lily suggested a method to him. What does Lily's suggestion describe?

• coverage limit

• insurance

• depreciation

• deductible

Olivia, Daniel, and Samuel are discussing insurance policies. Olivia mentions that insurance policies have coverage limits so that the insurance company has enough money to pay most claims over a period of time. Is Olivia's statement true or false?

• True

• False

Sophia's house was damaged in a storm. She needs to replace her damaged property with new items of the same type and quality. Which option describes the dollar amount it will cost Sophia to do this?

• co-pay

• deductible

• actual cash value

• replacement cost

Natural disasters, fire, robbery are examples of ______________.

• Law of large numbers

• Risks

• Premiums

• Deductibles

You have a $2500 deductible with your insurance policy. What does this mean?

• Your coverage limit is $2500.

• Your co-pay is $2500.

• You must pay $2500 towards medical costs before insurance will cover costs

• Insurance will pay you $2500.

What are variables insurance companies base their prices on?

• size of company

• type of industry

• safety policies in place

• all of the above

Charlotte has a car and she pays her car payments and rent monthly. She is considering getting insurance and wonders if she can pay her insurance premiums monthly as well. Is it possible?

• True

• False

Grace, Ava, and Samuel are discussing their insurance premiums. They realize that certain factors affect their individual premiums. What factors might be affecting their insurance premiums?

• their age & medical history

• their occupation

• where they live

• all of the above

Arjun and Noah work at the same company and are applying for health insurance. Arjun is 27 years old and does not smoke. Noah, on the other hand, is 55 years old and has a history of heart disease. Who would be offered a LOWER insurance premium?

• Arjun

• Noah

• They would receive the same insurance premium.

• None of the above

David runs a delivery service and has a fleet of vehicles for his business. Nora, his business advisor, suggests him to get an insurance policy. Which type of insurance policy should David get to cover his company vehicles and drivers?

• Liability

• Worker's Compensaton

• Commercial auto insurance

• Property insurance