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RMIN 4000 Edmunds Exam 3| (124 Questions and Answers)
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RMIN 4000 Edmunds Exam 3| (124 Questions and Answers)
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RMIN 4000 Edmunds Exam 3|(124 Questions and Answers)
basic parts of an insurance contract - -declarations, definitions, insuring
agreement, exclusions, conditions, and miscellaneous provisions
- declarations - -statements that provide information about the particular
property or activity to be insured
- what does the declarations page usually contain - -name and address,
policy dates, amount of insurance, premium and deductible, and other
relevant info
- definitions - -key words or phrases are defined so that coverage under the
policy can be determined more easily (insurer-"we,us,out" vs.
insured-"you,your")
- insuring agreement - -summary of the major promises of the insurer (what
is covered)
- named perils - -only perils specifically named in the policy are covered
- open perils (All Risk, Special Coverage) - -all perils are covered except for
those that are specifically excluded
- exclusions - -perils or property that are not covered under the policy
- why are exclusions necessary - -certain perils are considered uninsurable
like war and wear and tear
- what are some reasons to have insurance contract exclusions - -presence
of extraordinary hazards, coverage provided by other contracts, moral or
morale hazard, or coverage not needed by typical insureds
- conditions - -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 - -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 - -person or party named on the declarations page of
policy
- first named insured - -has additional rights and responsibilities that do not
apply to other named insureds
- other insureds - -persons or parties who are insured under policy even
though they are not specifically named
- additional insureds - -person or party added to the policy by an
endorsement (lenders and mortgagors)
- Endorsements and Riders - -provisions that add to, delete from, or modify
the original policy terms (negotiated contract enhancements, state law
provisions, etc.)
- deductible - -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 - -eliminate small claims,
reduce premiums, and reduce moral and morale hazard
- straight deductible - -the amount the insured is responsible for per loss
before the insurer pays anything
- aggregate deductible - -The amount the insured is responsible for in total
(over all losses during policy period) before the insured pays anything
- elimination (waiting) period - -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 - -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 - -(amount carried/amount
required) x loss = amount of recovery
- coinsurance in health - -provision that requires the insured to pay a
specified percentage of covered medical expenses after the deductible is
met (reduce premiums and prevent overusing policy benefits)
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