TYPES OF RISK
Which type of risk is caused by events such as floods, hurricanes, or tornadoes?
A. Market Risk
B. Economic Risk
C. Natural Risk
D. Human Risk
C. Natural Risk
Which risk management strategy involves removing the possibility of risk entirely?
A. Reduce
B. Transfer
C. Avoid
D. Assume
C. Avoid
What is the amount of money paid regularly to keep an insurance policy active?
A. Claim
B. Deductible
C. Premium
D. Copayment
C. Premium
Which insurance protects renters’ personal belongings inside an apartment?
A. Auto Insurance
B. Disability Insurance
C. Renters Insurance
D. Product Liability Insurance
C. Renters Insurance
Which type of insurance helps pay medical expenses caused by illness or injury?
A. Health Insurance
B. Renters Insurance
C. Auto Insurance
D. Property Insurance
A. Health Insurance
Which type of risk occurs when a business may lose money because customer demand changes?
A. Market Risk
B. Human Risk
C. Natural Risk
D. Liability Risk
A. Market Risk
Installing security cameras to help prevent theft is an example of which strategy?
A. Reduce
B. Assume
C. Transfer
D. Avoid
A. Reduce
What is the amount a policyholder must pay before insurance begins helping cover costs?
A. Coinsurance
B. Deductible
C. Claim
D. Benefit
B. Deductible
Which type of insurance helps protect doctors from lawsuits caused by mistakes during treatment?
A. Product Liability Insurance
B. Professional Liability Insurance
C. Disability Insurance
D. Commercial Insurance
B. Professional Liability Insurance
Which type of insurance protects a homeowner from damage caused by fire or theft?
A. Disability Insurance
B. Homeowners Insurance
C. Vision Insurance
D. Life Insurance
B. Homeowners Insurance
A business owner worries about employees stealing money or customer information. What type of risk is this?
A. Natural Risk
B. Human Risk
C. Economic Risk
D. Speculative Risk
B. Human Risk
Buying insurance so another company shares financial losses is an example of:
A. Avoid
B. Reduce
C. Assume
D. Transfer
D. Transfer
Which term refers to a request for payment sent to an insurance company after a loss occurs?
A. Premium
B. Policy
C. Coinsurance
D. Claim
D. Claim
Which type of life insurance provides coverage for a specific number of years?
A. Whole Life Insurance
B. Endowment Insurance
C. Universal Life Insurance
D. Term Life Insurance
D. Term Life Insurance
A teenager causes a car accident that damages another driver’s vehicle. Which coverage would MOST likely help pay for the damage?
A. Property Damage Liability
B. Renters Insurance
C. Disability Insurance
D. Collision Coverage
A. Property Damage Liability
A company invests thousands of dollars into a brand-new product. The business could either earn large profits or lose money if the product fails. What type of risk is involved?
A. Pure Risk
B. Human Risk
C. Speculative Risk
D. Natural Risk
C. Speculative Risk
A business decides not to purchase insurance and instead saves money in a special account to pay for future losses. Which strategy is being used?
A. Avoid
B. Reduce
C. Assume
D. Transfer
C. Assume
A patient visits the doctor and pays $30 at the front desk before seeing the doctor. What is this payment called?
A. Deductible
B. Premium
C. Copayment
D. Claim
C. Copayment
A worker injures their back while lifting heavy boxes at work and misses several weeks of pay. Which insurance would MOST likely help?
A. Workers Compensation Insurance
B. Renters Insurance
C. Vision Insurance
D. Product Liability Insurance
A. Workers Compensation Insurance
A college student living in an apartment wants protection for their laptop, clothes, and furniture in case of theft or fire. Which insurance is BEST?
A. Auto Insurance
B. Homeowners Insurance
C. Renters Insurance
D. Workers Compensation Insurance
C. Renters Insurance
A hurricane destroys part of a warehouse. The business had insurance to help pay for damages. Which answer BEST describes the situation?
A. Speculative Risk and Transfer
B. Pure Risk and Transfer
C. Market Risk and Assume
D. Human Risk and Reduce
B. Pure Risk and Transfer
A delivery company installs GPS tracking, driver training, and dash cameras to lower accident risks. Which strategy BEST describes this situation?
A. Transfer
B. Reduce
C. Assume
D. Avoid
B. Reduce
A person chooses a higher deductible on their auto insurance policy. What will MOST likely happen?
A. Premiums increase
B. Premiums decrease
C. Coverage disappears
D. Claims are denied automatically
B. Premiums decrease
A customer sues a company after being injured by a defective blender sold by the business. Which insurance would BEST help protect the company?
A. General Liability Insurance
B. Product Liability Insurance
C. Disability Insurance
D. Homeowners Insurance
B. Product Liability Insurance
A business owner wants protection for employee injuries, customer lawsuits, and damage to company property after a storm. Which option BEST fits these needs?
A. Only Life Insurance
B. Only Disability Insurance
C. A Combination of Business Insurance Policies
D. Only Renters Insurance
C. A Combination of Business Insurance Policies