General Insurance PrinciplesCâu 164 / 474
A homeowner faces the chance that a kitchen fire will destroy the house. Insurers call this a pure risk because:
a.the loss can be predicted exactly for any one household
b.the homeowner could profit from the event if the house is rebuilt
c.the chance of the fire happening is under the owner's control
d.the outcome is either a loss or no loss, with no chance of gain
Giải thích
Pure risk presents only two outcomes, loss or no loss, and that is the only kind of risk private insurers will write. The choice describing a possible profit describes speculative risk, such as buying stock or opening a restaurant, which insurance does not cover. No insurer can predict the outcome for one household; the law of large numbers predicts results for the group.
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Câu hỏi liên quan cùng chủ đề
- The principle of indemnity means an insured who suffers a covered loss should be:
- A condition that increases the chance or severity of a loss, such as a worn extension cord, is a:
- Because an insurance policy is written by the insurer and offered on a take-it-or-leave-it basis, any ambiguity in the wording is generally interpreted:
- An insurer writing hundreds of thousands of similar homeowners policies can price them because the law of large numbers holds that:
- Underwriting exists largely to control adverse selection, which is the tendency of:
- A windstorm tears shingles off a roof that a poor repair had left loose. In insurance terms, the windstorm is:
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