UGA RMIN 4000 Edmunds Exam 1 / Questions with Certified Solutions.Stretch your brain before your first study session Terms in this set (90) loss exposureany situation where a loss is possible (does not have to occur) Learn / Study with Learn uncertainty concerning the occurrence of a loss (or calculated possibility of a negative outcome) Choose matching term 1loss exposure2 the loss must be determinable and measurable.3risk4formula to find severity Don't know?risk uncertainty concerning the occurrence of a loss (or calculated possibility of a negative outcome) 1 / 2
loss frequencyhow often a loss occurs within a specific period (probability) formula to find frequency # of losses/# of exposures loss severityhow much does a loss cost when it occurs (a house fire costs $x) formula to find severity total losses in dollars/# of losses Perilcause of loss (fire, windstorm, flood) Hazardan event that creates or increases the chance of a loss without causing At what probability is risk highest?
0.5 Do risk and chance of loss mean the same?No, chance of loss is the probability that an event will occur What are the four types of hazards?Physical, Moral, Morale, and Legal Physical hazarda physical condition that increases the frequency or severity of loss moral hazarddishonesty or character defects in an individual that increase the frequency or severity of loss (using a hammer to create "hail" damage to your roof to get a claim) Morale (Attitudinal) Hazard carelessness or indifference to a loss, which increases the frequency or severity of a loss (leaving car unlocked leading to theft) Legal Hazardcharacteristics of the legal system or regulatory environment that increase the frequency or severity of losses (a jury in one district may be more sympathetic than others)
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