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18 Cards in this Set
- Front
- Back
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Risk
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The chance of financial loss from perils to people or property.
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Insurance
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A method for spreading individual risk among a large group of people to make losses more affordable for all.
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Insurer
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A business that agrees to pay the cost of potential future losses in exchange for a regular fee payments.
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Policy
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A written contract for a risk-sharing group buying insurance.
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Premium
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A fee that an insurer pays stating that they agree to assume an identified risk.
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Policyholder
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The owner of a policy.
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Indemnification
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Putting the policyholder back in the same financial condition he or she was in before the loss occurred.
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Probability
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The mathematics of chance and the root of indemnification.
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Personal risks
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The chances of loss involving your income and standard of living.
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Property risks
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The chances of loss or harm to personal or real property.
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Liability risks
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The chances of loss that may occur when your errors or inappropriate actions result in bodily injury to someone else or damage to someone else's property.
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Pure risk
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A chance of loss with no chance for gain.
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Speculative risk
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A risk that may result in either gain or loss.
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Insurable Interest
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Any financial interest in life or property such that, if the life or property were lost or harmed, the insured would suffer financially.
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Risk Management
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An organized strategy for controlling financial loss from pure risk.
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Risk Avoidance
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To eliminate the chance for loss by not doing the activity that could result in the loss.
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Risk Reduction
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To take measures to lessen the frequency or severity of losses that may occur.
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Risk Assumption
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Establish a monetary fund to cover the cost of a loss.
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