Property & Casualty Missouri
Insurance
The transfer of risk from insured to insurer
Indemnity
To restore policy holder to pre-loss condition; make whole
Law of large numbers
As number of loss exposures increase, difference between actual & expected results become smaller
Property Insurance
Covers the insured's real estate & personal property agaisnt damage or loss due to covered perils & consequential losses
Casuality Insurance
Protects insured from financial loss from non property insurance losses. "Non- property insurance coverage"
Reinsurance
The insurance company's insurance company.
Insurance company's determine retention limit & buys reinsurance for the balance, also knoen as "Pooling the risk"
Risk
The chance of uncertainty of loss
Exposure
A condition or situation that presents a possibility if loss
Ways to manage risk
Avoid, Control, Retain, Transfer
Control Risk
Techniques that limit loss severity come under the heading of risk reduction
Retain a risk
If any loss occurs, they will pay for it themselves
(can be intentional or unintentional)
Transfer a risk
Insurance hold harmless agreement