Question

51. The physical damage deductible on auto collision insurance is an example of:

               A. risk transfer

               B. loss control

               C. retention

               D. all the above

               E. A and C only

52. Losses sustained by a small number of insureds are shared by a large number of insureds. This is a short      definition of:

                              A. risk transfer

                              B. pure risk

                              C. pooling

                              D. speculative risk

Answer 1

question 51= answer = C = retention

Question 52= answer = C = pooling

In detail , below gives

The answer for question number 51 is ,

Question =

The physical damage deductible on auto collision insurance is an example of

A risk transfer

B loss control

C retention

D all the above

E A and C only

Now we have to move to the detailed answer ,

answer = option C = retention

Because ,

• The insurance retention is the amount of money , an insured one becomes responsible for in the event of a claim.
• in this question number 51 , we have to see the word " deductible " which is almost similar to that of " retention "
• technically , retentions get paid first.Your insurance company expects you to pay this amount before they pay a dime.
• If your policy has a deductible , however the insurance company pays the entire claim and sends you a bill for the amount of your deductible.

thus , you pay a retention up front , where as you reimburse your insurance company for the deductible.​​​​​​​

Answer for qustion number 52

Question is

Losses sustained by a small number of insureds are shared by a large number of insureds.this is a short definition of ,

A. Risk transfer

B.pure risk

C.pooling

D.speculative risk

answer is option = C = pooling

Because ,

• pooling of risk is a risk management system , in which , insurance companies come together to form a pool , which can provide protection to insurance companies against risks such as flood , earth quakes...etc
• it is the spreading of financisl risks evenly among a large number of contributors to the program.
• And also pooling is the spreading of losses incurred by the few over the entire group .