RMIN 4000 Edmunds Test 3 Questions and Answers 100% Verified!

Basic Parts of an Insurance Contract - ANSWER-1. Declarations 2. Definitions 3. Insuring agreement 4. Exclusions 5. Conditions 6. Miscellaneous provisions Declarations - ANSWER-statements that provide information about the particular property or activity to be insured definitions - ANSWER-statements that provide information about the particular property or activity to be insured Insuring Agreement - ANSWER-Summary of the major promises of the insurer (what the policy covers) named perils - ANSWER-only those perils specifically named in the policy are covered open perils - ANSWER-all perils are covered except for those that are specifically excluded exclusions - ANSWER-perils or property that are not covered under the policy ex. flood/earthquake, war, intentional loss, certain types of property Why are exclusions necessary? - ANSWER--Some perils are not commercially insurable e.g., catastrophic losses due to war -Extraordinary hazards are present e.g., using the automobile for a taxi -Coverage is provided by other contracts e.g., use of auto excluded on homeowners policy -Moral hazard problems e.g., coverage of money limited to $200 in homeowners policy -Attitudinal hazard problems e.g., individuals are forced to bear losses that result from their own carelessness -Coverage not needed by typical insureds e.