Insurance Terminology Quiz

Risk in insurance terminology refers to the

• Uncertainty of financial loss

• Cause of a peril

• Certainty of financial loss

• Hazard that causes a claim

Events or conditions that increase the likelihood of a loss occurring are referred to as

• Perils

• Hazards

• Exposures

• Risks

Mutual companies are owned by the

• Stockholders

• Policyowners

• Insurers

• Board of Directors

What type of risk allows both gains and losses?

• Pure

• Exposure

• Speculative

• Hazardous

All of the following are ways to handle risk EXCEPT

• Paying a deductible

• A reciprocal insurance exchange

• Never flying in an airplane

• Buying insurance

A fraternal benefit society usually provides

• Insurance benefits to the public at large

• Workers’ compensation policies

• Medicaid policies to all society members

• Life or health insurance to its members

ABC Insurance Company is incorporated in Georgia but is doing business in Massachusetts; it is a(n)

• Domestic insurer

• Foreign insurer

• Alien insurer

• Export insurer

An agent’s actions or deeds show what kind of authority?

• Expressed

• Agent

• Implied

• Apparent

The tendency for less favorable risks to seek or continue insurance is called

• Substandard risk

• Underwriting

• Adverse selection

• Rating

When an insurance company transfers its loss exposure to another insurer it is known as

• Assignment

• Indemnity

• Reinsurance

• Reciprocity