RMI Practice Quizzes questions well
answered already Passed
In which part of an insurance contract would you find information about the property or activity to be
insured? - correct answer ✔✔Declarations
Deductibles are used for all of the following reasons - correct answer ✔✔- to reduce moral and
attitudinal hazard
- to eliminate small claims
- to reduce premiums
Deductibles are used for all of the following reasons except - correct answer ✔✔to reduce loss control
efforts
Which of the following statements is (are) true with respect to endorsements and riders?
I. Endorsements and riders are used to amend provisions of insurance contracts.
II. If the endorsement or rider conflicts with terms in the underlying contract, the endorsement or rider
takes precedence unless it conflicts with the law. - correct answer ✔✔Both I and II
Janice insured a building valued at $200,000 for $150,000 under a property insurance policy that
included an 80 percent coinsurance provision. If a $32,000 insured loss occurs, how much will Janice
collect from her insurer, assuming no deductible? - correct answer ✔✔$30,000
Disability income insurance uses a special type of deductible. No benefits are paid during the initial
period of disability (e.g. two weeks, a month, five months, etc.). What is this type of deductible, which is
expressed in time rather than in dollars, called? - correct answer ✔✔elimination (waiting) period
In which section of an insurance contract will you find provisions that qualify or place limitations on the
insurer's promise to perform? - correct answer ✔✔conditions
, Which of the following statements is (are) true about the insuring agreement?I. The insuring agreement
provides a description of the property or activity to be insured.
II. The insuring agreement can be written on an "open-perils" basis or on a "named-perils" basis. -
correct answer ✔✔II only
Exclusions are found in insurance policies for all of the following reasons - correct answer ✔✔- some
perils are not insurable
- moral hazard problems would develop without certain exclusions
- coverage may be provided under another insurance contract
Exclusions are found in insurance policies for all of the following reasons EXCEPT - correct answer ✔✔to
add coverage for certain perils
pts
Bill borrowed Linda's car with her permission. Both Bill and Linda have automobile liability insurance
with a $100,000 bodily injury liability limit. While driving Linda's car, Bill negligently caused an accident.
The accident victim was awarded $80,000 in damages. How will this claim be settled, assuming that the
policy written by Linda's insurer is primary and Bill's insurance coverage is excess? - correct answer
✔✔Linda's insurer will pay the entire $80,000 claim
Dale and his wife Jenny are legally separated. The couple owns a vacation cabin. Dale purchased a
$25,000 property insurance policy on the cabin. Unaware that Dale had purchased this coverage, Jenny
purchased a $50,000 property insurance policy on the cabin. While both policies were in force, a $12,000
covered property loss occurred. The insurers agreed to settle the claim on a pro rata basis. What is each
insurer's liability? - correct answer ✔✔Dale's insurer pays $4,000 and Jenny's insurer pays $8,000
Under the needs approach of determining the amount of life insurance to purchase, one consideration is
providing income to the surviving spouse and children during the one- or two-year period following the
breadwinner's death. This period is called the: - correct answer ✔✔readjustment period
Which of the following statements is (are) true with respect to the human life value approach?
I. The human life value approach considers all sources of income that the family receives.
II. The human life value approach does not consider the time value of money-(i.e. future cash flows are
not discounted back to present value). - correct answer ✔✔neither I or II
answered already Passed
In which part of an insurance contract would you find information about the property or activity to be
insured? - correct answer ✔✔Declarations
Deductibles are used for all of the following reasons - correct answer ✔✔- to reduce moral and
attitudinal hazard
- to eliminate small claims
- to reduce premiums
Deductibles are used for all of the following reasons except - correct answer ✔✔to reduce loss control
efforts
Which of the following statements is (are) true with respect to endorsements and riders?
I. Endorsements and riders are used to amend provisions of insurance contracts.
II. If the endorsement or rider conflicts with terms in the underlying contract, the endorsement or rider
takes precedence unless it conflicts with the law. - correct answer ✔✔Both I and II
Janice insured a building valued at $200,000 for $150,000 under a property insurance policy that
included an 80 percent coinsurance provision. If a $32,000 insured loss occurs, how much will Janice
collect from her insurer, assuming no deductible? - correct answer ✔✔$30,000
Disability income insurance uses a special type of deductible. No benefits are paid during the initial
period of disability (e.g. two weeks, a month, five months, etc.). What is this type of deductible, which is
expressed in time rather than in dollars, called? - correct answer ✔✔elimination (waiting) period
In which section of an insurance contract will you find provisions that qualify or place limitations on the
insurer's promise to perform? - correct answer ✔✔conditions
, Which of the following statements is (are) true about the insuring agreement?I. The insuring agreement
provides a description of the property or activity to be insured.
II. The insuring agreement can be written on an "open-perils" basis or on a "named-perils" basis. -
correct answer ✔✔II only
Exclusions are found in insurance policies for all of the following reasons - correct answer ✔✔- some
perils are not insurable
- moral hazard problems would develop without certain exclusions
- coverage may be provided under another insurance contract
Exclusions are found in insurance policies for all of the following reasons EXCEPT - correct answer ✔✔to
add coverage for certain perils
pts
Bill borrowed Linda's car with her permission. Both Bill and Linda have automobile liability insurance
with a $100,000 bodily injury liability limit. While driving Linda's car, Bill negligently caused an accident.
The accident victim was awarded $80,000 in damages. How will this claim be settled, assuming that the
policy written by Linda's insurer is primary and Bill's insurance coverage is excess? - correct answer
✔✔Linda's insurer will pay the entire $80,000 claim
Dale and his wife Jenny are legally separated. The couple owns a vacation cabin. Dale purchased a
$25,000 property insurance policy on the cabin. Unaware that Dale had purchased this coverage, Jenny
purchased a $50,000 property insurance policy on the cabin. While both policies were in force, a $12,000
covered property loss occurred. The insurers agreed to settle the claim on a pro rata basis. What is each
insurer's liability? - correct answer ✔✔Dale's insurer pays $4,000 and Jenny's insurer pays $8,000
Under the needs approach of determining the amount of life insurance to purchase, one consideration is
providing income to the surviving spouse and children during the one- or two-year period following the
breadwinner's death. This period is called the: - correct answer ✔✔readjustment period
Which of the following statements is (are) true with respect to the human life value approach?
I. The human life value approach considers all sources of income that the family receives.
II. The human life value approach does not consider the time value of money-(i.e. future cash flows are
not discounted back to present value). - correct answer ✔✔neither I or II
