RMIN 4000 EDMUNDS EXAMINATION TEST
3 2026 QUESTIONS WITH 100% VERIFIED
ANSWERS
⩥ Exposures Answer: things of value (assets) that could be lost
⩥ Peril Answer: Causes of loss
⩥ Risk Management Answer: What you do to protect these assets and/or
prevent/reduce losses
⩥ calculated possibility Answer: A probabilistic outcome (chance of
loss, likelihood of loss) that is known or estimated
⩥ Negative Outcome Answer: loss, must be quantifiable ($)
⩥ Frequency Answer: The number of losses that occur within a specified
time period
⩥ Severity Answer: The dollar amount of loss for a specific peril
,⩥ Example of Frequency Answer: Probability of a fire is 0.0071 per loss
exposure per year
⩥ Example of severity Answer: Average structure fire loss is about
$25,000
⩥ Frequency equation Answer: number of losses/number of exposures
⩥ Severity equation Answer: total losses ($) / number of losses
⩥ Rabid Dawg Delivery, Inc. has new 1,000 delivery vehicles. In 2024,
they incurred a total of $1,000,000 in liability and physical damage
losses arising from 50 occurrences/accidents. What was Rabid Dawg's
loss frequency in 2024? Answer: 0.05
⩥ Rabid Dawg Delivery, Inc. has new 1,000 delivery vehicles. In 2024,
they incurred a total of $1,000,000 in liability and physical damage
losses arising from 50 occurrences/accidents. What was Rabid Dawg's
average loss severity in 2024? Answer: $20,000
⩥ Mountain Electric has 10 old, faded service vehicles. In recent years
since their founder became disabled, their once premier fleet has not
been maintained, and recruiting trained technicians has been an issue. In
2024, they incurred a total of $1,000,000 in liability and physical
, damage losses arising from 50 occurrences/accidents. What was
Mountain Electric's loss frequency in 2024? Answer: 5
⩥ Mountain Electric has 10 old, faded service vehicles. In recent years
since their founder became disabled, their once premier fleet has not
been maintained, and recruiting trained technicians has been an issue. In
2024, they incurred a total of $1,000,000 in liability and physical
damage losses arising from 50 occurrences/accidents. What was
Mountain Electric's average loss severity in 2024? Answer: $20,000
⩥ What is a hazard? Answer: A condition that creates or increases the
frequency and/or severity of a loss.
⩥ Does a hazard cause a loss? Answer: No, a hazard does not cause a
loss.
⩥ Four types of Hazards Answer: physical, legal, moral, morale
⩥ Physical Hazard Answer: a physical condition that increases the
frequency or severity of loss
⩥ Peril examples Answer: fire, windstorm, flood, collision, burglary
⩥ Moral Hazard Answer: The presence of insurance changes the bahvior
of the insured
3 2026 QUESTIONS WITH 100% VERIFIED
ANSWERS
⩥ Exposures Answer: things of value (assets) that could be lost
⩥ Peril Answer: Causes of loss
⩥ Risk Management Answer: What you do to protect these assets and/or
prevent/reduce losses
⩥ calculated possibility Answer: A probabilistic outcome (chance of
loss, likelihood of loss) that is known or estimated
⩥ Negative Outcome Answer: loss, must be quantifiable ($)
⩥ Frequency Answer: The number of losses that occur within a specified
time period
⩥ Severity Answer: The dollar amount of loss for a specific peril
,⩥ Example of Frequency Answer: Probability of a fire is 0.0071 per loss
exposure per year
⩥ Example of severity Answer: Average structure fire loss is about
$25,000
⩥ Frequency equation Answer: number of losses/number of exposures
⩥ Severity equation Answer: total losses ($) / number of losses
⩥ Rabid Dawg Delivery, Inc. has new 1,000 delivery vehicles. In 2024,
they incurred a total of $1,000,000 in liability and physical damage
losses arising from 50 occurrences/accidents. What was Rabid Dawg's
loss frequency in 2024? Answer: 0.05
⩥ Rabid Dawg Delivery, Inc. has new 1,000 delivery vehicles. In 2024,
they incurred a total of $1,000,000 in liability and physical damage
losses arising from 50 occurrences/accidents. What was Rabid Dawg's
average loss severity in 2024? Answer: $20,000
⩥ Mountain Electric has 10 old, faded service vehicles. In recent years
since their founder became disabled, their once premier fleet has not
been maintained, and recruiting trained technicians has been an issue. In
2024, they incurred a total of $1,000,000 in liability and physical
, damage losses arising from 50 occurrences/accidents. What was
Mountain Electric's loss frequency in 2024? Answer: 5
⩥ Mountain Electric has 10 old, faded service vehicles. In recent years
since their founder became disabled, their once premier fleet has not
been maintained, and recruiting trained technicians has been an issue. In
2024, they incurred a total of $1,000,000 in liability and physical
damage losses arising from 50 occurrences/accidents. What was
Mountain Electric's average loss severity in 2024? Answer: $20,000
⩥ What is a hazard? Answer: A condition that creates or increases the
frequency and/or severity of a loss.
⩥ Does a hazard cause a loss? Answer: No, a hazard does not cause a
loss.
⩥ Four types of Hazards Answer: physical, legal, moral, morale
⩥ Physical Hazard Answer: a physical condition that increases the
frequency or severity of loss
⩥ Peril examples Answer: fire, windstorm, flood, collision, burglary
⩥ Moral Hazard Answer: The presence of insurance changes the bahvior
of the insured
