RMI insurance exam 1 prep Correct Questions and Answers
Which type of hazard results from a physical condition that increases the likelihood of a loss occurring? A. physical harm B. Character Hazard C. moral hazard D. Morale Hazard - ANSWER A indifference to risk due to the fact that the insured has insurance - ANSWER morale hazard the potential for loss caused by the character of the individual - ANSWER moral hazard The section of a insurance contract that describes exactly which property or person is covered is the: A. declarations section B. inclusions section C. definitions section D. conditions section - ANSWER A defines key words or phrases used throughout the contract - ANSWER definitions section lists provisions that require an insured to perform certain duties - ANSWER conditions section All of the following statements regarding insurance policies are correct except: A. adverse selection is the tendency of those that most need insurance to purchase insurance policies while those with the least perceived risk are less likely to pay the necessary premiums for insurance B. an endorsement is a modification or change to a life or health insurance policy C. Co-payments are loss-sharing arrangements whereby the insured pays a flat dollar amount or percentage of the loss in excess of the deductible D. deductibles serve as motivation for an insured to take precautions to avoid losses or to prevent the filing of false claims - ANSWER B a change to a health or life insurance policy - ANSWER rider a modification or change to an existing property insurance policy - ANSWER endorsement
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