RMI3011 FSU Exam 2 Questions with
complete solution
Declarations - correct answer ✔Statements that provide information about
the particular property or activity to be insured
Definitions - correct answer ✔Clearly define key words or phrases in an
insurance contract
Named Perils - correct answer ✔Covered perils are specifically named in the
policy
Open Perils - correct answer ✔All perils are covered unless specifically
excluded
Reasons for Exclusions - correct answer ✔Uninsurable Perils
Presence of extraordinary hazards
Coverage under other contracts
Moral Hazard problems
Coverage not needed by typical insured
Conditions - correct answer ✔Provisions in the policy that qualify or place
limitations on the insurers promise to perform. Imposes certain duties
Named Insured - correct answer ✔Person(s) or party named in the
Declarations section of the policy
,Other insured - correct answer ✔Persons who are insured under the named
insured's policy even though they are not specifically named in the policy
Additional Insured - correct answer ✔A person or party added by
endorsement.
Endorsements and Riders - correct answer ✔A written provision that adds to,
deletes from, or modifies the provisions of the original contract or policy
Deductible - correct answer ✔A provision by which a specified amount if
subtracted from the total loss payment otherwise would be payable.
Straight Deductible - correct answer ✔The insured must pay a certain
number of dollars of loss before the insurer is required to make a payment
Aggregate Deductible - correct answer ✔All losses during a specified time
period accumulate to satisfy the deductible
Calendar-year Deductible - correct answer ✔Expenses accumulate during
the calendar year
Elimination Period - correct answer ✔A waiting period before insurance
benefits can be paid (common to disability
Coinsurance - correct answer ✔A contractual provision that encourages
insuring the property to a specified percentage of its insurable value
Coinsurance Calculation - correct answer ✔(did/should)*loss
, Purpose of coinsurance - correct answer ✔Encourages insuring to value
Helps to achieve equity in rating
Percentage participation clause - correct answer ✔Frequently in health
insurance policies, requires the insured to pay a certain percentage of
covered medical expenses in excess of the deductible. Purpose is to reduce
premiums and prevent over utilization of policy benefits.
HO policy section 1 - correct answer ✔Covers property of the insured
HO policy section 2 - correct answer ✔Provides liability coverage and
medical payments to others
Who is insured? - correct answer ✔Named insured and spouse
Family members in the home (resident relatives)
Other persons under the age of 21 who are is the care of an insured or
resident relative
Full-time students away from home under the age of 24
Section 2- who is insured? - correct answer ✔Same as section 1 plus:
Any person legally responsible for covered animals or watercraft
With respect to motor vehicle covered by the policy, persons employed by
insured or by other insured's while working for the insured
Coverage A: Dwelling - correct answer ✔Any attached structures. Also
covers material and supplies intended for construction or repair of the dwelling
or other structures.
Excludes land
complete solution
Declarations - correct answer ✔Statements that provide information about
the particular property or activity to be insured
Definitions - correct answer ✔Clearly define key words or phrases in an
insurance contract
Named Perils - correct answer ✔Covered perils are specifically named in the
policy
Open Perils - correct answer ✔All perils are covered unless specifically
excluded
Reasons for Exclusions - correct answer ✔Uninsurable Perils
Presence of extraordinary hazards
Coverage under other contracts
Moral Hazard problems
Coverage not needed by typical insured
Conditions - correct answer ✔Provisions in the policy that qualify or place
limitations on the insurers promise to perform. Imposes certain duties
Named Insured - correct answer ✔Person(s) or party named in the
Declarations section of the policy
,Other insured - correct answer ✔Persons who are insured under the named
insured's policy even though they are not specifically named in the policy
Additional Insured - correct answer ✔A person or party added by
endorsement.
Endorsements and Riders - correct answer ✔A written provision that adds to,
deletes from, or modifies the provisions of the original contract or policy
Deductible - correct answer ✔A provision by which a specified amount if
subtracted from the total loss payment otherwise would be payable.
Straight Deductible - correct answer ✔The insured must pay a certain
number of dollars of loss before the insurer is required to make a payment
Aggregate Deductible - correct answer ✔All losses during a specified time
period accumulate to satisfy the deductible
Calendar-year Deductible - correct answer ✔Expenses accumulate during
the calendar year
Elimination Period - correct answer ✔A waiting period before insurance
benefits can be paid (common to disability
Coinsurance - correct answer ✔A contractual provision that encourages
insuring the property to a specified percentage of its insurable value
Coinsurance Calculation - correct answer ✔(did/should)*loss
, Purpose of coinsurance - correct answer ✔Encourages insuring to value
Helps to achieve equity in rating
Percentage participation clause - correct answer ✔Frequently in health
insurance policies, requires the insured to pay a certain percentage of
covered medical expenses in excess of the deductible. Purpose is to reduce
premiums and prevent over utilization of policy benefits.
HO policy section 1 - correct answer ✔Covers property of the insured
HO policy section 2 - correct answer ✔Provides liability coverage and
medical payments to others
Who is insured? - correct answer ✔Named insured and spouse
Family members in the home (resident relatives)
Other persons under the age of 21 who are is the care of an insured or
resident relative
Full-time students away from home under the age of 24
Section 2- who is insured? - correct answer ✔Same as section 1 plus:
Any person legally responsible for covered animals or watercraft
With respect to motor vehicle covered by the policy, persons employed by
insured or by other insured's while working for the insured
Coverage A: Dwelling - correct answer ✔Any attached structures. Also
covers material and supplies intended for construction or repair of the dwelling
or other structures.
Excludes land
