Risk controlRisk responseRisk avoidance examplerisk avoidance中文Risk acceptanceRisk reductionrisk retention中文1.4.3 Treatment of Risk - American Safety Council
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There are four risk management techniques used to deter insurance risk levels. Risk Avoidance; Risk Reduction; Risk Retention; Risk Transference. It is ... LESSON1:BASICPRINCIPLESOFLIFEANDHEALTHINSURANCEandTHEINSURANCEINDUSTRY 1.4.3TreatmentofRisk Therearefourriskmanagementtechniquesusedtodeterinsurancerisklevels. RiskAvoidance RiskReduction RiskRetention RiskTransference Itisimportanttounderstandthedifferences. RiskAvoidance Riskavoidanceoccurswhenindividualsevaderiskentirely.Itistheactofnotdoingsomethingthatcouldpossiblycausealossortheinactivityofparticipationinaneventthatmaypotentiallycausealosssituation.Anexamplewouldbedrivinganautomobile.IfLeedoesn'tdrive,heavoidsgettingintoanautoaccident. RiskReduction Riskreductiontakesplacewhenthechancesoflossarelessened.Changingone'slifestyletominimizeaknownriskisanexampleofriskreduction. Leestartsthinkinghejustmightwanttodrivesomeday,buttherehavebeenafewautotheftsintheneighborhoodlately.Sohewantstomakesurehepurchasesavehiclewithananti-theftdevice,thusreducingthechancesofhavinghisnewcarstolen. RiskRetention Riskretentionisbeingawareoftherisksinvolvedandtakingprecautionsforfinancialprotection. Leedecideshereallywantstodriveandacceptsthefactthatthepossibilityofanaccidentexists.Nowhemustdecidewhatlimitstoputonhisfinancialresponsibilitybychoosinghisdeductible.Theautopolicy'sdeductibleisanillustrationofriskretention.Throughthedeductible,theinsuredretainspartoftherisk,thepartthatheisresponsiblefor.Onewaytohandlearetainedriskisthroughself-insurance. RiskTransference Risktransferenceistheactofshiftingtheresponsibilityofrisktoanotherintheformofaninsurancecontract. Throughtheinsurancecontract,theburdenofcarryingtheriskandindemnifyingthefinanciallossistransferredfromtheindividualtotheinsurancecompany. Purchasinginsurancedoesnoteliminateriskentirely;however,itisoneofthemosteffectivewaysoftransferringrisk. Unfortunately,anunavoidablepartofeverydaylifeisrisk.Merelycrossingastreetcanputsomeoneindanger. Differentpeoplehandleriskindifferentways.Typically,pastorpersonalexperiencesdeterminehowanindividualwillrespondtouncertainty.Beforeapersoncandeterminethebestwaytohandlearisk,thatpersonmustbeabletoidentifyriskprobabilityandseverity.Whatisthelikelihoodofsufferingaloss,andhowextensivemighttheresultantdamagebe? Thisevaluationisreferredtoasriskmanagement.Riskmanagementistheprocessof: determiningwhatexposurestolossexist; determiningtheseriousnessofexposures;and developingawayofminimizingtheeffectofexposure. Thegoalofriskmanagementistomakethebestpossiblearrangementsaheadoftimesothatonewillnotbeseriouslyaffectedfinanciallywhenalossoccurs.Riskmanagementisintendedtoprotectincomeandassetsagainstunforeseen,unintended,oraccidentalloss. Copyright2005-2013,FloridaInsuranceLicensingAssociation-AmericanSafetyCouncil,Inc.-AllRightsReserved
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