15 Questions
Insurance is a device designed to increase risk by combining exposure units to make their individual losses collectively unpredictable.
False
In an insurance system, the burden of loss falls solely on the homeowner without any redistribution.
False
According to Prof. Alan H. Willett, insurance involves transferring risks from many individuals to one person or a group of persons.
True
Insurance does not involve a combination of risks according to the multiple schools of thought discussed.
False
The law of large numbers and central limit theorem ensure that a sufficiently large number of homogeneous risks will produce unpredictable aggregate results.
False
Insurance is a contract whereby one party agrees to compensate another party for losses.
True
The insurer is the party whose loss causes the insurer to make a claims payment.
False
Premium is the payment the insured receives.
False
Insurance can be defined as the transfer of speculative risk from the insured to the insurer.
False
The primary business of the insurer is risk avoidance for a fee.
False
According to Prof. Mehr and Cammack, insurance is a social device for reducing risk by combining a sufficient number of exposure units to make their individual losses collectively predictable.
True
Insurance operates by redistributing the burden of loss to all homeowners when there is no insurance system in place.
False
According to Prof. Alan H. Willett, insurance involves transferring risks of many individuals to one person or a group of persons.
True
Insurance can be defined as a mechanism that involves transferring risks without any combination of risks according to the discussed schools of thought.
False
The law of large numbers and central limit theorem ensure that a sufficiently large number of homogeneous risks will produce unpredictable aggregate results.
False
Test your knowledge on the fundamentals of insurance with this quiz based on the course plan by Youvin Jayasinge. Explore topics such as the definition of insurance, methods of evaluation, and risk mitigation techniques.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
