Principles of Insurance and Loss Settlement Quiz

To mitigate financial loss by transferring the risk to an insurance company.

To minimize administrative costs and discourage filing small claims.

To determine the risk level and set premiums accordingly.

It ensures fair compensation by considering depreciation in property value.

It allows for adjustments to coverage without issuing a new policy.

To provide financial resources for covering potential losses.

It allows the insurer to pursue recovery from third parties.

It helps primary insurers manage their risk by transferring some of it to reinsurers.

It ensures trust and honesty between the insurer and the insured.

It specifies what perils are not covered by the insurance policy.

It shares the cost of healthcare between the insured and the insurer.

It encourages responsible behavior by making the insured responsible for initial losses.

It ensures the insured is restored to their pre-loss financial position.

It arises when insured individuals may be incentivized to cause losses.

It incentivizes the insured to maintain adequate coverage and share in the risk.

It customizes coverage to meet specific needs beyond the standard policy.

It spreads risk among insurers when multiple policies cover the same loss.

It involves accepting certain risks without transferring them to an insurer.

It restores coverage after a policy has lapsed or been cancelled.