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RMI 3011 Exam 2 RMI 3011 Florida State University -Question and answers verified to pass
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RMI 3011 Exam 2 RMI 3011 Florida State University -Question and answers verified to pass Basic parts of an insurance contract - correct answer Declarations Definitions Insuring Agreement Exclusions Conditions Miscellaneous Provisions Declarations - correct answer -Statements that provid...

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  • November 30, 2024
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  • 2024/2025
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  • Questions & answers

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  • rmi 3011 exam 2 question and answers verified to p
  • rmi 3011 exam 2 rmi 3011 florida state university

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RMI 3011 Exam 2 Question and answers
verified to pass
Basic parts of an insurance contract - correct answer ✔Declarations
Definitions
Insuring Agreement
Exclusions
Conditions
Miscellaneous Provisions


Declarations - correct answer ✔-Statements that provide information about
the particular property or activity to be insured
-Usually found on the first page of the policy
-Usually contains name of the insured, location of the property, period of
protection, amount of insurance, amount of premium, size of deductible, and
any other relevant information


Definitions - correct answer ✔- Key words or phrases that have quotation
marks around them
- Insurer is frequently called "we, "ours", or "us"
- Insured is frequently called "you" or "yours"


Insuring Agreement - correct answer ✔- Summarizes the major promises of
the insurer
- Two basic forms are the named-perils policy and open-perils policy


Named-perils policy - correct answer ✔Only those perils specifically named
in the policy are covered

,Open-perils policy (special coverage policy) - correct answer ✔- All losses
are covered except for those losses that are specifically excluded
- This policy is preferred over the named-perils policy


Exclusions - correct answer ✔Three major types:
- Excluded perils (flood, intentional act, etc.)
- Excluded losses (professional liability loss)
- Excluded property (pets)


Conditions - correct answer ✔Provisions in the policy that qualify or place
limitations on the insurer's promise to perform
- If the policy conditions are not met, the insurer can refuse to pay the claim
- Ex: notifying the insurer if a loss occurs, protecting the property after a loss,
etc.


Miscellaneous Provisions - correct answer ✔Ex: Cancellation, subrogation,
misstatement of age, grace period


Named Insured - correct answer ✔Person or persons whose name appears
in the declarations section of the policy
- Can be one or more persons


First named insured - correct answer ✔First name that appears on the
declarations section of a policy
- the first named insured has certain additional rights and responsibilities that
only apply to them
- Rights include the right to a premium refund and the receipt of a cancellation
notice

, - Responsibilities include payment of premiums and complying with notice-of-
loss requirements


Endorsement - correct answer ✔A written provision that adds to, deletes
from, or modifies the provisions of the original contract
- Ex: an earthquake endorsement to a homeowners policy
- Used in property and casualty insurance


Rider - correct answer ✔A provision that amends or changes the original
policy
- Ex: A waiver-of-premium rider on a life insurance policy
- Used in life and health insurance


Deductible - correct answer ✔A provision by which a specified amount is
subtracted from the total loss payment that would otherwise be payable
- Typically found in property, health, and auto insurance contracts
- Not used in life insurance because death is a total loss


Purposes of a deductible - correct answer ✔1) Eliminate small claims that
are expensive to handle and process
2) Reduce premiums paid by the insured
3) Reduce moral and attitudinal hazard


Straight deductible - correct answer ✔The insured must pay a certain
number of dollars of loss before the insurer is required to make a payment
- Common in property insurance

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