RMIN 4000 BROWN EXAM 3 UPDATED
ACTUAL QUESTIONS AND VERIFIED
ANSWERS
●● declaration
Answer: part of an insurance contract that tells who, what, when, and
where, lists the amount of coverage, premiums, and deductibles, and is
usually the very first page
●● definition
Answer: part of the insurance contract that defines terms like "your
covered auto"
●● Insuring Agreement
Answer: part of contract that summarizes major promises of insurer;
either named perils or all-risks
●● named perils
Answer: if a peril is not named, it is not covered under the insurance
contract
●● all risks
Answer: all perils are covered unless they are specifically excluded
,●● reasons for exclusions
Answer: some perils are considered uninsurable; some hazards are
extraordinary; coverage provided by other contracts; moral hazard
problems; coverage not needed by typical insureds
●● conditions
Answer: provisions in the insurance policy that qualify or limit the
insurer's promise to perform; ex: notifying insurer after loss occurs,
protecting property from further damage after a loss, cooperating with
the insurer in the event of a liability lawsuit
●● Misc. Provisions in P/C Insurance
Answer: assignment of policy, cancellation, "other-insurance" provisions
●● Misc. Provisions in Life/Health Insurance
Answer: grace period; reinstatement of lapsed policy
●● endorsements and riders
Answer: provisions that legally add to, delete from, or modify the
original policy
●● deductible
, Answer: a specific amount that is subtracted from the indemnity
payment (that would otherwise be total); found in most forms of
insurance but not in life or liability
●● purposes of deductibles
Answer: eliminate small claims, reduce moral and morale hazard,
provide flexibility and choice to insured
●● elimination period
Answer: a waiting period that must be satisfied before a claim is paid;
typically used in disability contracts
●● coinsurance in property insurance
Answer: requires the insured to insure the property to a stated percentage
pf its insurable value; if not, the insured must share the loss; payment
will never exceed the limit of coverage or the amount of the loss
●● coinsurance formula
Answer: (amount of insurance purchases/amount of insurance
required)*loss-deductible
●● purpose of coinsurance
ACTUAL QUESTIONS AND VERIFIED
ANSWERS
●● declaration
Answer: part of an insurance contract that tells who, what, when, and
where, lists the amount of coverage, premiums, and deductibles, and is
usually the very first page
●● definition
Answer: part of the insurance contract that defines terms like "your
covered auto"
●● Insuring Agreement
Answer: part of contract that summarizes major promises of insurer;
either named perils or all-risks
●● named perils
Answer: if a peril is not named, it is not covered under the insurance
contract
●● all risks
Answer: all perils are covered unless they are specifically excluded
,●● reasons for exclusions
Answer: some perils are considered uninsurable; some hazards are
extraordinary; coverage provided by other contracts; moral hazard
problems; coverage not needed by typical insureds
●● conditions
Answer: provisions in the insurance policy that qualify or limit the
insurer's promise to perform; ex: notifying insurer after loss occurs,
protecting property from further damage after a loss, cooperating with
the insurer in the event of a liability lawsuit
●● Misc. Provisions in P/C Insurance
Answer: assignment of policy, cancellation, "other-insurance" provisions
●● Misc. Provisions in Life/Health Insurance
Answer: grace period; reinstatement of lapsed policy
●● endorsements and riders
Answer: provisions that legally add to, delete from, or modify the
original policy
●● deductible
, Answer: a specific amount that is subtracted from the indemnity
payment (that would otherwise be total); found in most forms of
insurance but not in life or liability
●● purposes of deductibles
Answer: eliminate small claims, reduce moral and morale hazard,
provide flexibility and choice to insured
●● elimination period
Answer: a waiting period that must be satisfied before a claim is paid;
typically used in disability contracts
●● coinsurance in property insurance
Answer: requires the insured to insure the property to a stated percentage
pf its insurable value; if not, the insured must share the loss; payment
will never exceed the limit of coverage or the amount of the loss
●● coinsurance formula
Answer: (amount of insurance purchases/amount of insurance
required)*loss-deductible
●● purpose of coinsurance
