Exam 2: Insurance and Risk

If insurers were to provide indemnification for losses that were deliberately caused,which characteristic of ideally insurable risks would not be met?

A discount store chain is concerned that cashiers might steal money from cash registers.To provide protection against theft by the cashiers,the discount store chain can purchase a

Which of the following statements regarding private insurance and government insurance is (are)true? I.Private insurance programs include life and health insurance and property and liability insurance. II.Social insurance programs are government insurance programs that are voluntary and financed entirely by contributions from covered employers

An insurance company that sells earthquake insurance in an area where earthquakes are possible has subjected itself to the risk of insolvency if a severe earthquake occurs.An insurer can safely sell earthquake insurance in this area if it shifts the risk of catastrophic loss to another insurer.The shifting of insured risk from one insurer to another insurer is called

BBB Auto Club provides emergency road service and other services to its members.BBB Auto Club charges a higher membership fee to new members than it charges to members who are renewing their membership.When asked to explain this pricing policy,the auto club president noted,"New members often sign-up prior to taking a long road trip,so we have to charge more as first-year members have higher service utilization rates." A similar phenomenon observed in insurance markets is called

Which of the following types of risks best meets the requirements for being insurable by private insurers?

All of the following are social costs associated with insurance EXCEPT