1. For each item or event in the table below, select the best description/explanation from the following list and enter the corresponding number in the table. Provide a brief explanation for each answer.

1. adverse selection 6. contract of adhesion 11. pure risk

2. moral hazard 7. underwriting 12. law of large numbers

3. morale hazard 8. pooling

4. loss control 9. insurable interest

5. indemnification 10. peril

Item or Event	Explanation
Your 10-year-old Ford vehicle is destroyed in a collision. A new Ford costs $20,000, but the insurance company only pays you $2,000.
A life insurance company offers a policy to anyone over age 20 with no questions or medical exams required. The company bases the premium on a 45-year-old person, the average age of all people over 20 in the United States. The company loses money on the policy.
Your homeowners policy states that damage to the foundation of the house caused by "ground water" is not covered. However, "ground water is not defined in the policy. Your neighbor's underground water pipes burst, causing underground flooding that damages your foundation. The insurance company refuses to pay due to the "ground water" exclusion. You argue that "ground water" implies naturally occurring water and should not include a man-made problem. You win in court.
An employee slips and falls on Sunday while washing his car. He hurts his back, but manages to get to work on Monday morning, and then pretends to fall. The company's workers' compensation insurance covers his medical bills.
I purchase an insurance policy on your personal property. Your apartment suffers fire damage and your clothes are destroyed. I file a claim, but the insurance company refuses to pay.