RMIN 4000 Edmunds Exam 2 Latest Update

pg. 1 RMIN 4000 Edmunds Exam 2 Latest Update Actual Exam Questions with Correct Verified Answers/ Graded A+

major types of private insurers - Correct Answer - Stock, Mutual, and Lloyd's of London

basic parts of an insurance contract - Correct Answer - declarations, definitions, insuring agreement, exclusions, conditions, and miscellaneous provisions

what does the declarations page usually contain - Correct Answer - name and address, policy dates, amount of insurance, premium and deductible, and other relevant info

insuring agreement - Correct Answer - summary of the major promises of the insurer (what is covered)

declarations - Correct Answer - statements that provide information about the particular property or activity to be insured

named perils - Correct Answer - only perils specifically named in the policy are covered

open perils (All Risk, Special Coverage) - Correct Answer - all perils are covered except for those that are specifically excluded

exclusions - Correct Answer - perils or property that are not covered under the policy

why are exclusions necessary - Correct Answer - certain perils are considered uninsurable like war and wear and tear

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pg. 2 what are some reasons to have insurance contract exclusions - Correct Answer - presence of extraordinary hazards, coverage provided by other contracts, moral or morale hazard, or coverage not needed by typical insureds

conditions - Correct Answer - provisions in the policy that qualify or place limitations on the insurer's promise to perform (prompt notification of loss, no concealment or fraud, etc.)

what are some miscellaneous provisions - Correct Answer - state mandatory provisions, notice of cancellation, loss, nonrenewal, and mortgagee clause (mortgagee has right to be protected and must prove loss to get paid back)

named insured - Correct Answer - person or party named on the declarations page of policy

first named insured - Correct Answer - has additional rights and responsibilities that do not apply to other named insureds

other insureds - Correct Answer - persons or parties who are insured under policy even though they are not specifically named

additional insureds - Correct Answer - person or party added to the policy by an endorsement (lenders and mortgagors)

Endorsements and Riders - Correct Answer - provisions that add to, delete from, or modify the original policy terms (negotiated contract enhancements, state law provisions, etc.)

deductible - Correct Answer - a provision by which a specified amount is subtracted from the total loss payment that would otherwise be payable

what purpose do deductibles have for insurers - Correct Answer - eliminate small claims, reduce premiums, and reduce moral and morale hazard 2 / 3

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straight deductible - Correct Answer - the amount the insured is responsible for per loss before the insurer pays anything

aggregate deductible - Correct Answer - The amount the insured is responsible for in total (over all losses during policy period) before the insured pays anything

elimination (waiting) period - Correct Answer - stated period of time at the beginning of a loss during which no benefits are paid (common in disability insurance and business interruption claim coverage)

coinsurance in property insurance - Correct Answer - Encourages the insured to insure the property to a stated percentage of its insurable value. If the coinsurance requirement is not met at the time of loss, the insured must share in the loss as a coinsurer

what is the formula for amount of recovery - Correct Answer - (amount carried/amount required) x loss = amount of recovery

What should be considered when choosing a healthcare plan - Correct Answer - deductible, coinsurance, out-of-pocket max, copayments, medical network, and premium

Disability Insurance - Correct Answer - Provides replacement income in the event of severe disability (total vs. partial, benefit period of number of years or set age, and elimination "waiting" period)

stock insurers - Correct Answer - corporation owned by stockholders.objective is to earn profit for stockholders by increasing the value of the stock and paying dividends

Mutual insurers - Correct Answer - a corporation owned by policyholders. profits are distributed to policyholders by dividends or rate reductions

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