RMIN 4000 Edmunds Exam 2 Latest Update 2024
Actual Exam Questions with Correct Verified
Answers/ Graded A+
major types of private insurers - Correct Answer - Stock, Mutual, and Lloyd's of London
basic parts of an insurance contract - Correct Answer - declarations, definitions, insuring
agreement, exclusions, conditions, and miscellaneous provisions
what does the declarations page usually contain - Correct Answer - name and address,
policy dates, amount of insurance, premium and deductible, and other relevant info
insuring agreement - Correct Answer - summary of the major promises of the insurer
(what is covered)
declarations - Correct Answer - statements that provide information about the particular
property or activity to be insured
named perils - Correct Answer - only perils specifically named in the policy are covered
open perils (All Risk, Special Coverage) - Correct Answer - all perils are covered except
for those that are specifically excluded
exclusions - Correct Answer - perils or property that are not covered under the policy
why are exclusions necessary - Correct Answer - certain perils are considered
uninsurable like war and wear and tear
pg. 1
,what are some reasons to have insurance contract exclusions - Correct Answer -
presence of extraordinary hazards, coverage provided by other contracts, moral or
morale hazard, or coverage not needed by typical insureds
conditions - Correct Answer - provisions in the policy that qualify or place limitations on
the insurer's promise to perform (prompt notification of loss, no concealment or fraud,
etc.)
what are some miscellaneous provisions - Correct Answer - state mandatory provisions,
notice of cancellation, loss, nonrenewal, and mortgagee clause (mortgagee has right to
be protected and must prove loss to get paid back)
named insured - Correct Answer - person or party named on the declarations page of
policy
first named insured - Correct Answer - has additional rights and responsibilities that do
not apply to other named insureds
other insureds - Correct Answer - persons or parties who are insured under policy even
though they are not specifically named
additional insureds - Correct Answer - person or party added to the policy by an
endorsement (lenders and mortgagors)
Endorsements and Riders - Correct Answer - provisions that add to, delete from, or
modify the original policy terms (negotiated contract enhancements, state law
provisions, etc.)
deductible - Correct Answer - a provision by which a specified amount is subtracted
from the total loss payment that would otherwise be payable
what purpose do deductibles have for insurers - Correct Answer - eliminate small
claims, reduce premiums, and reduce moral and morale hazard
pg. 2
, straight deductible - Correct Answer - the amount the insured is responsible for per loss
before the insurer pays anything
aggregate deductible - Correct Answer - The amount the insured is responsible for in
total (over all losses during policy period) before the insured pays anything
elimination (waiting) period - Correct Answer - stated period of time at the beginning of a
loss during which no benefits are paid (common in disability insurance and business
interruption claim coverage)
coinsurance in property insurance - Correct Answer - Encourages the insured to insure
the property to a stated percentage of its insurable value. If the coinsurance
requirement is not met at the time of loss, the insured must share in the loss as a
coinsurer
what is the formula for amount of recovery - Correct Answer - (amount carried/amount
required) x loss = amount of recovery
What should be considered when choosing a healthcare plan - Correct Answer -
deductible, coinsurance, out-of-pocket max, copayments, medical network, and
premium
Disability Insurance - Correct Answer - Provides replacement income in the event of
severe disability (total vs. partial, benefit period of number of years or set age, and
elimination "waiting" period)
stock insurers - Correct Answer - corporation owned by stockholders.
objective is to earn profit for stockholders by increasing the value of the stock and
paying dividends
Mutual insurers - Correct Answer - a corporation owned by policyholders. profits are
distributed to policyholders by dividends or rate reductions
pg. 3
Actual Exam Questions with Correct Verified
Answers/ Graded A+
major types of private insurers - Correct Answer - Stock, Mutual, and Lloyd's of London
basic parts of an insurance contract - Correct Answer - declarations, definitions, insuring
agreement, exclusions, conditions, and miscellaneous provisions
what does the declarations page usually contain - Correct Answer - name and address,
policy dates, amount of insurance, premium and deductible, and other relevant info
insuring agreement - Correct Answer - summary of the major promises of the insurer
(what is covered)
declarations - Correct Answer - statements that provide information about the particular
property or activity to be insured
named perils - Correct Answer - only perils specifically named in the policy are covered
open perils (All Risk, Special Coverage) - Correct Answer - all perils are covered except
for those that are specifically excluded
exclusions - Correct Answer - perils or property that are not covered under the policy
why are exclusions necessary - Correct Answer - certain perils are considered
uninsurable like war and wear and tear
pg. 1
,what are some reasons to have insurance contract exclusions - Correct Answer -
presence of extraordinary hazards, coverage provided by other contracts, moral or
morale hazard, or coverage not needed by typical insureds
conditions - Correct Answer - provisions in the policy that qualify or place limitations on
the insurer's promise to perform (prompt notification of loss, no concealment or fraud,
etc.)
what are some miscellaneous provisions - Correct Answer - state mandatory provisions,
notice of cancellation, loss, nonrenewal, and mortgagee clause (mortgagee has right to
be protected and must prove loss to get paid back)
named insured - Correct Answer - person or party named on the declarations page of
policy
first named insured - Correct Answer - has additional rights and responsibilities that do
not apply to other named insureds
other insureds - Correct Answer - persons or parties who are insured under policy even
though they are not specifically named
additional insureds - Correct Answer - person or party added to the policy by an
endorsement (lenders and mortgagors)
Endorsements and Riders - Correct Answer - provisions that add to, delete from, or
modify the original policy terms (negotiated contract enhancements, state law
provisions, etc.)
deductible - Correct Answer - a provision by which a specified amount is subtracted
from the total loss payment that would otherwise be payable
what purpose do deductibles have for insurers - Correct Answer - eliminate small
claims, reduce premiums, and reduce moral and morale hazard
pg. 2
, straight deductible - Correct Answer - the amount the insured is responsible for per loss
before the insurer pays anything
aggregate deductible - Correct Answer - The amount the insured is responsible for in
total (over all losses during policy period) before the insured pays anything
elimination (waiting) period - Correct Answer - stated period of time at the beginning of a
loss during which no benefits are paid (common in disability insurance and business
interruption claim coverage)
coinsurance in property insurance - Correct Answer - Encourages the insured to insure
the property to a stated percentage of its insurable value. If the coinsurance
requirement is not met at the time of loss, the insured must share in the loss as a
coinsurer
what is the formula for amount of recovery - Correct Answer - (amount carried/amount
required) x loss = amount of recovery
What should be considered when choosing a healthcare plan - Correct Answer -
deductible, coinsurance, out-of-pocket max, copayments, medical network, and
premium
Disability Insurance - Correct Answer - Provides replacement income in the event of
severe disability (total vs. partial, benefit period of number of years or set age, and
elimination "waiting" period)
stock insurers - Correct Answer - corporation owned by stockholders.
objective is to earn profit for stockholders by increasing the value of the stock and
paying dividends
Mutual insurers - Correct Answer - a corporation owned by policyholders. profits are
distributed to policyholders by dividends or rate reductions
pg. 3
