Random Sample
Definition of "Random sample"
Sample of n elements selected from a population of A? elements in such a way that the sample has essentially the same characteristics as the population. The random sample serves as the foundation of all probability theory as it relates to probability in sampling. In theory, all subsets drawn from the same sample have an equal chance of being drawn. Sampling is extremely important to the calculation of premium rates. For example, if the insurer wants to predict the probability that a wood-frame house will burn, the sample must be drawn from the population of wood-frame houses, not brick-frame houses.
Popular Insurance Terms
Written agreement that puts insurance coverage into effect. ...
Method of rating that compares property to be insured to a standard and adjusts the rate for deviations from the standard. A standard building is situated in a standard city of specific ...
Analysis of uncertainty of financial loss. This classification can be according to whether a risk is fundamental, particular, pure, speculative, dynamic, or static. In life insurance the ...
End of a defined time period that dividends become payable to the policyholder. ...
Coverage on an all risks basis for fur garments belonging to customers of a furrier. ...
Condition in which the occupancy or the purposes for which the premises are being used as described in the insurance policy change so as to result in an increased risk. The policy is void ...
Calculation of insurance premiums based on an age less than the current age of the insured. ...
Rate applied when two or more separate buildings are insured under one policy, and/or when two or more separate contents are insured under one policy. ...
Same as term Excess of Loss Reinsurance: method whereby an insurer pays the amount of each claim for each risk up to a limit determined in advance and the re-insurer pays the amount of the ...
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