Question 1003 of 303 · California Life-Only Agent Exam
A homeowner faces the possibility of a fire loss but has no chance of gaining from a fire. This is which kind of risk?
Exactly one answer is correct.
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Correct answer to question 1003
- A: Pure risk, because the only possible outcomes are loss or no loss
Explanation
A pure risk offers only the chance of loss or no loss and is generally insurable. Speculative risk includes the chance of gain, such as gambling, and is not insurable.
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