Exam (elaborations)
UGA RMIN 4000 Edmunds Test 3 Questions and Answers
- Course
- Institution
UGA RMIN 4000 Edmunds Test 3 Questions and Answers
[Show more]
Content preview
UGA RMIN 4000 Edmunds Test 3Questions and Answers
Principle of Indemnity - Correct Answers -The insurer agrees to pay no more than the
actual amount of the loss
What does indemnity do for the insured? - Correct Answers -Puts them in the same
financial position they were in before
What is the purpose of the principle of indemnity? - Correct Answers -To prevent the
insured from profiting from a loss; To reduce moral hazard
4Exceptions to Principle of Indemnity - Correct Answers -Valued Policy, Valued Policy
Laws, Replacement Cost, Life Insurance
Valued Policy - Correct Answers -Pays the face amount insurance if a total loss occurs;
Ex: Jewelry, Fine Arts
Valued Policy Laws - Correct Answers -Law that requires payment of the face amount if
a total loss to real property occurs from specific perils (fire, et. al)
Point of Service (POS) Plan - Correct Answers --Hybrid of HMO and PPO.
-Typically structured as an HMO, but members can go outside of network for care.
-If patients see providers who are in the network, they pay little or nothing out of pocket.
-Deductibles and copayments are higher if patients see providers outside the network.
High Deductible Health Plan (HDHP) - Correct Answers --Plan that combines a high-
deductible health plan with a health savings account (HSA).
-A high-deductible health plan has an annual deductible that is substantially higher than
traditional plans.
IRS definition of High Deductible Health Plan 2023 - Correct Answers -• Min Deductible:
$1,500 individual / $3,000 family
• Max OPP: $7,500 individual / $15,000 family
Replacement Cost - Correct Answers -Current cost of restoring the damaged property
with new materials of like kind and quality, with no deduction for depreciation
Life Insurance - Correct Answers -Pays stated amount of policy to the beneficiaries
,Principle of Insurable Interest - Correct Answers -Insured/beneficiary must be in a
position to lose financially if a coverd loss occurs
4 Key Legal Principles of Insurance - Correct Answers -Principle of Indemnity, Principle
of Insurable Interest, Principle of Subrogation, Principle of Utmost Good Faith
Who are appraisals required by? - Correct Answers -Underwriter
What is Replacement Cost? - Correct Answers -The cost to replace property with an
item of like kind and quality (workmanship and materials); not the same as market value
or historical cost
Actual Cash Value - Correct Answers -replacement cost minus depreciation
What is indemnification based on in property insurance? - Correct Answers -Actual
Cash Value of the property at the time of loss
Principle of Insurable Interest - Correct Answers -The insured must be in a position to
lose financially if a covered loss occurs
What are the 3 points of the principle of Insurable Interest? - Correct Answers -Prevents
gambling on losses, reduces moral hazard, measure of the insured's loss
Examples of Insurable Interest - Correct Answers --Ownership of property (house, car)
-Potential legal liability (business owner)
-Secured creditors (mortgage company, auto lender)
-Contractual right (goods in transit)
When must an insurable interest exist in property insurance? - Correct Answers -At the
time of loss
When must an insurable interest exist in life insurance? - Correct Answers -At inception
of policy
Principle of Subrogation - Correct Answers -substitution of the insurer in place of the
insured for the purpose of claiming indemnity from a third party for a loss covered by
insurance
3 Examples of Subrogation - Correct Answers -- someone else hits your car
- your insurance company pays you for the damages to your vehicle
- your insurance company sues the other driver for reimbursement
3 reasons for subrogation - Correct Answers -1. Prevents an insured from collecting
twice (once from insurer, once from responsible party)
2. Holds the negligent party responsible for the loss
, 3. Reduces insurance claims costs (rates)
What does subrogation not apply to? - Correct Answers -Life Insurance
Can a beneficiary still sue negligent third parties for wrongful death? - Correct Answers -
Yes
Principle of Utmost Good Faith - Correct Answers -A higher degree of honesty is
imposed on both parties to an insurance contract than is imposed on parties to other
contracts
What are the 3 legal doctrines that the principle of utmost good faith is supported by? -
Correct Answers -1. Representations
2. Concealment
3. Warranty
Representations - Correct Answers -Statements made by the applicant for insurance
What are the 3 criteria for a misrepresentation to make a contract voidable? - Correct
Answers -1. Material
2. False
3. Relied on by the insurer
Concealment - Correct Answers -intentional failure of the applicant for insurance to
reveal a material fact to the insurer
A contract can be voided due to a concealment if: - Correct Answers -Concealed fact
was known by the insured to be material; Insured intended to defraud the insurer
Warranty (statement) - Correct Answers -A statement that becomes part of the
insurance contract and is guaranteed by the maker to be true in all respects
Warranty (Condition) - Correct Answers -A condition agreed to by an insured in order to
receive coverage
What happens in case of a violation of a warranty? - Correct Answers -The claim will be
denied
What is bad faith? - Correct Answers -law that allows lawsuits against insurance
companies for: improper denial of claims and improper delay of claims
What can bad faith damages do? - Correct Answers -Exceed policy limits
What do bad faith damages include? - Correct Answers -Attorney fees, Emotional
distress, Punitive damages
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mereka. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
70713 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 15 years now
Recently viewed by you
Class notes ·
Class notes Biochemistry (AB_1137) on Thermodynamics
Exam (elaborations) ·
PATH 1000 MIDTERM 1 QUESTIONS AND ANSWERS (GRADED A)
Exam (elaborations) ·
Nutrition Exam 3 Questions and Answers Latest 2025
Class notes ·
Class notes Biochemistry (AB_1137) on Ligand binding
Exam (elaborations) ·
NCLEX RN TEST BANK 2022- 2024 QUESTIONS AND CORRECT
Exam (elaborations) ·
NCCCO CORE EXAM REVIEW TEST COMPLETE SOLUTION 2025
Exam (elaborations) ·
ACCT 3270 Exam 2 | Verified with 100% Correct Answers
Exam (elaborations) ·
Nutrition Exam 1 Questions with Correctly Solved Answers
