Property & Casualty Insurance(Ohio) Exam Questions (19 Terms) With Verified Definitions Updated 2024

Risk {Ans: Risk is the uncertainty or chance of loss occurring. The two types of risks are pure and speculative, only one which is insurable (Pure you can insure!)}Perils {Ans: Perils are defined as a potential cause of loss, ( Fire, Lightning, Hail)}Moral {Ans: Moral hazards are tendencies towards increased risk. (Dishonesty) Moral hazards involve evaluating the character or reputation of the proposed insured.}Hazard {Ans: Hazards are conditions or situations that increase the probability of an insured loss occurring. Hazards are classified Physical, Moral, and Morale.}Speculative risk {Ans: Involves the opportunity for your loss or gain. And example of speculative risk is gambling. These types of risks are not insurable.}Reinsurance {Ans: A contract one insurance company (the reinsurer) indemnfies another insurance company (ceding company) for part or all of its liablities}Exposure {Ans: A unit of measurement used to determine rate charge for insurance coverage.}Five elements of insurable risk {Ans: Must be: due to chance (accidental); measurable; calculable; affordable; exclude catastrophic perils}Morale {Ans: Morale hazards arise from a state of mind that causes indifference to loss, such as carelessness. (Not locking your front door)}Property insurance {Ans: Insurance against the loss of