Insurance Risk | what is the risk at insurance?
Which really it is the definition of the word Insurance Risk: uncertain future, made possible and independent of the will of the contracting persons, which take place, produces undesirable economic consequences.
It is the reason for the insurance, what is the insurance risk?
By insurance for damage caused by a risk, in exchange for a price called premium, which guarantees payment or compensation for the damages suffered are replaced.
To be insurable must fulfill a number of conditions which are:
- Possible, that is, it can happen.
- Uncertain, that is, that there is no certainty that can happen.
- Acts of God, that is not dependent on the will of the insured.
- Lawful, that does not go against the law.
- Measurable, statistically we know the probability of occurrence and the economic valuation of its consequences.
And you, what do you think that’s the insurance risk?
This, for example, is one of the “risks” that can run if you do not have good insurance:
Insurance Risk classes
Based on the object affected the insurance risks can be classified into:
Personal risks: affect or threaten people, such as death, survival without sufficient funds, accidents, illness, etc.
Material risks: affect or threaten animals or things like fire, theft, transportation, etc.:
Property risks: affect or threaten the abstract property of individuals, such as civil liability, credit, stoppage of work, etc.:
How many types of ” insurance risks ” are there?
As well says the dictionary of the Mapfre Foundation, there are many types of risk.
As different kinds of insurance risks may include the following:
- Ancillary risk (risk accessory, extended coverage).In the Law of Insurance, known as such to one whose coverage exceptions, you do not need prior authorization of the branch to which he belongs provided that it bid jointly with other approved and meets the following requirements main risk bouquet: – be linked to the risk principal- refer to the object covered by this be guaranteed by the same contract.- not require the branch to which it belongs the greatest risk or financial guarantees that corresponds to the main insurance risk.
- Aggravated risk (Increased risk). Seeaggravation (risk).
- Insurable risk (insurable risk). One that, by its nature, is likely to be insured;g. meets the essential characteristics of insurance risk (see). He opposes uninsurable risk (see this concept).
- Acceptable risk (self-insured retention). That a person or an organization accepts manage with their own means, without transferring.See insurance risk retention.
- Nuclear risk (atomic risk).It is what comes from the possibility of an explosion or nuclear radiation. Given its severity, it is not normally accepted by individual insurers, but coverage usually corresponds to a pool or pool of insurers.
- Catastrophic risk (catastrophe hazard).This name that has its origin in events or extraordinary events, such as high-gravity atmospheric phenomena, earthquakes, military or political upheavals or revolutions, etc., whose own nature and abnormal high intensity and amount of given damages that may result from them prevent their coverage is guaranteed in ordinary. Former insurance policy that, if adopted, can lead to an organization, institution or company to its demise. One that affects a large number of people, goods or territories, resulting in higher material and human losses, and the period of recovery of infrastructure and return to normality is very long. In Europe these risks usually are insured by a government agency ( Consortium of Insurance Compensation , see) that there is a fund made up of contributions that each of the insurers made a part of their premiums collected in practically all branches.
- Common risk (common hazard).It is said that two or more goods or objects are common insurance risk when the nature and proximity of them forced to consider them as a single insurance risk, since the occurrence of a loss one inevitably affect the remainder. In this sense, we speak of common risks (or cluster risks), e.g., about people traveling on the same plane with respect to the various houses that constitute the same property, etc.
- Constant risk (constant risk).One that remains unchanged during the insurance coverage; for example, the risk of fire furniture.
- Run risk (expired risk).Risk this name temporarily given up. Here, considering, e.g. a policy is concluded for a period of 12 months (from 1 January next December 31), at any intermediate point within this period, it is said that the risk has run from 1st January to that moment. A the purpose of the calculation of technical results, the concept is often used to compare risk run claims he has had a policy or set of them, in a certain period and the premium charged for that same period of risk.
- Risk adjoining (contiguous hazard).One who, though independent, is in contact with another, so that the incident involving one of them can be transmitted to the other. This would, g., the case of two separated by a wall buildings mediator. This is an important factor in pricing, for example, from a fire hazard aspect, since the reduced danger of a building for housing can be altered, aggravated, if the adjoining building is a factory installed easily inflammable products.
- Other risk (different risk).It is one that has no relation with any other connection. It differs in this sense of common risk and contiguous risks and risks coming. See these concepts.
- Ongoing risk (current risk).This exists during the term of a policy. See in technical provisions the sub concept of provisions for unearned premiums.
- Speculative risk (speculative risk).Which, by its commercial nature, is itself the business of companies and determined that, based on the same, higher or lower obtainable profits.
- Exclude risk (risk excluded).That usually is not accepted by the insurer. See exclusion of risks and risk excluded.
- Extraordinary risk (extraordinary risk).He who by the magnitude and / or nature of its causes and effects, beyond the possibility of a normal insurance coverage, making it necessary to devise special formulas for assurance. In general, it is synonymous with catastrophe risk (see this concept).
- Extraprofessional risk (non-professional hazard).One who, as opposed to professional risk corresponds to the insured individual or private life.
- Financial risk (financial risk).That which relates to the economic capacity of the insured in relation to the sum insured and the type of insurance you want to hire. Also investment risk.
- Physical hazards (physical hazard).Synonymous with risk materials
- Uninsurable risk (non-insurable risk).One who, against insurable risk lacks some of the elements or characters of the risk (see) that prevent their assurance.
- Industrial risk (industrial risk).In general, this name that can affect an industrial nature is given. In this sense, it opposes the so-called single risk.
- Immediate risk (proximate risk).Synonymous with next risk.
- Locative risk (tenant’s risk).Concerning the responsibility that may lie with the tenant about the landlord for damages caused by fire in the leased premises.
- Material risk (risk materials; physical hazard).One that affects elements or property and refers to the possibility of total or partial destruction, theft or loss.
- Moral hazard (moral hazard).See information asymmetry.
- Normal risk (standard risk).Which it conforms to common standards reaction, response or behavior.
- Objective risk (objective risk).He whose composition, characteristics, intrinsic or extrinsic circumstances and other basics are described in the policy, or are susceptible to it-so as to allow the insurer to have sufficient information and correct it.
- Occupational hazard (occupational hazard).He who comes from the profession or normal activities of the insured.
- Ordinary risk (common risk; common hazard).It is one that, in its approach and predictable effects, responds to the normal patterns of recruitment in the insurance market, and if he concurs any circumstance that makes him atypical, it can be assumed by the insurer through the implementation of any corrective action as additional premium, surcharge, franchise, etc. He opposes extraordinary risk (see this concept).
- Equity risk (property risk). One that involves a decrease or loss of property of the insured as a result of an event that may affect total or partial.
- Personal risk (personal risk).One that affects the person’s circumstances, such as their health, physical or mental integrity, capacity for work, old age or survivors.
- Occupational hazard (occupational hazard).Overall, it is one that stems from the exercise of a profession or activity and can affect directly and bodily worker who performs it.
- Progressive risk (Increasing risk).One that is increasing with the passage of time; g., the risk of death of a person. It is contrary to the concept regressive risk.
- Next risk (proximate risk).It is one who, though separated from another, is a distance small enough so that the loss of one can affect the other.
- Pure risk (pure risk).Which strictly it corresponds to the possibility of an event occurring.
- Regressive risk (decreasing risk).One that diminishes with the passage of time; g., the risk of not receiving an outstanding claim as the debtor is repaying the amount in the stipulated time. It is contrary to the concept progressive risk.
- Simple risk (single risk).And it is usually called the fire risk refers to housing, offices, business premises, small businesses, etc., in contradistinction to the call industrial risks.
- Subjective risk (moral hazard).One who, unlike the objective risk involves a set of circumstances relating to objectivable hardly assured, so are complex rating of the insurer. Examples of morality subjective risk of the insured, their health, their economic situation, their more or less carefree behavior, etc.
- Moron risk (impaired risk).In life insurance, that name to that deficiency in the health of the insured exceeds the level considered normal is given. Acceptance by the insurer often involves the establishment of a compensatory premium. Also aggravated risk.