ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Loss of life due to a motor accident
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Loss or damage arising from a motor vehicle accident
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Liability to third parties arising from the sale of products
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Financial loss due to a drop in the market price of a company’s shares
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Detailed explanation-1: -Uninsurable risk is a condition that poses an unknowable or unacceptable risk of loss for an insurance company to cover. An uninsurable risk could include a situation in which insurance is against the law, such as coverage for criminal penalties.
Detailed explanation-2: -Insurance risk is the threat of a future financial loss that an insurer is willing to share with an individual or entity facing that threat.
Detailed explanation-3: -Most insurance providers only cover pure risks, or those risks that embody most or all of the main elements of insurable risk. These elements are “due to chance, ” definiteness and measurability, statistical predictability, lack of catastrophic exposure, random selection, and large loss exposure.
Detailed explanation-4: -#1 – Pure Risk. #2 – Speculative Risk. #3 – Financial Risk. #4 – Non-Financial Risk. #5 – Particular Risk. #6 – Fundamental Risk. #7 – Static Risk. #8 – Dynamic Risk.