Overview and Learning Objectives

This chapter explains the role of insurance and its practical solutions to the economic uncertainties and losses that affect us today. It defines the fundamental insurance principals that include the pooling of risks (or loss sharing) and the law of large numbers while providing simplified examples to assist you in grasping the concepts. You will learn that Insurance replaces the uncertainty of risk. This chapter defines risk and the factors that cause risk, promote it, as well as, the ways insurance companies handle the different types of risks.

Make sure you have the Big Dawg notes available as well as the state exam outline. The first three chapters are all about vocabulary.