Asked by Panya Faulk on May 25, 2024
Verified
Rizzo obtains a fire insurance policy on his apartment building with Safe-wise Insurance Company. This policy is an arrangement for
A) avoiding the assumption of responsibility.
B) predicting a potential loss based on unknown factors.
C) shifting the imposition of liability.
D) transferring and allocating risk.
Fire Insurance Policy
A contract between an insurer and policyholder that provides coverage against fire damage to property or goods.
Transferring Risk
The act of shifting the potential for loss or damage from one party to another, often achieved through insurance contracts or hedging.
Shifting Liability
The act of transferring the responsibility for a loss or damage from one party to another.
- Acquire knowledge on the essential elements of insurance contracts, such as insurability, insurable interest, and the legality of these agreements.
- Distinguish between different forms of coverage and exclusions contained within insurance policies, specifically pertaining to liability and comprehensive general liability insurance.
Verified Answer
RN
Ragavy NirmalanMay 27, 2024
Final Answer :
D
Explanation :
Insurance policies are designed to transfer and allocate risk from the insured to the insurer, in exchange for a premium. This allows the insured to mitigate the financial impact of potential losses.
Learning Objectives
- Acquire knowledge on the essential elements of insurance contracts, such as insurability, insurable interest, and the legality of these agreements.
- Distinguish between different forms of coverage and exclusions contained within insurance policies, specifically pertaining to liability and comprehensive general liability insurance.