Which of the following statements is true: Companies should attempt to retain ev

Question

  Which of the following statements is true:

Companies should attempt to retain every dollar of risk

The insurance premium should be reasonable and feasible

Retained losses must be unpredictable in amount and frequency

Because the cost of insurance is so high, catastrophic losses should be retained

Self-insurance is essentially the same as being uninsured

Companies should attempt to retain every dollar of risk

The insurance premium should be reasonable and feasible

Retained losses must be unpredictable in amount and frequency

Because the cost of insurance is so high, catastrophic losses should be retained

Self-insurance is essentially the same as being uninsured

Explanation / Answer

Statement

Comment

True / False

Companies should attempt to retain every dollar of risk

Companies can not attempt to retain every dollar of risk

FALSE

  

The insurance premium should be reasonable and feasible

Insurance Premium is calculated on the basis of Value insured , hence no such question arises

FALSE

  

Retained losses must be unpredictable in amount and frequency

Losses can be predicted

FALSE

  

Because the cost of insurance is so high, catastrophic losses should be retained

Catastrophic losses should be retained can not be retained

FALSE

  

Self-insurance is essentially the same as being uninsured

Self insurance means bearing own loss, hence no insurance

TRUE

Statement

Comment

True / False

Companies should attempt to retain every dollar of risk

Companies can not attempt to retain every dollar of risk

FALSE

  

The insurance premium should be reasonable and feasible

Insurance Premium is calculated on the basis of Value insured , hence no such question arises

FALSE

  

Retained losses must be unpredictable in amount and frequency

Losses can be predicted

FALSE

  

Because the cost of insurance is so high, catastrophic losses should be retained

Catastrophic losses should be retained can not be retained

FALSE

  

Self-insurance is essentially the same as being uninsured

Self insurance means bearing own loss, hence no insurance

TRUE

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