RMIN 4000 Edmunds Exam 3 2026
Questions and Answers
basic parts of an insurance contract - Correct answer-declarations, definitions,
insuring agreement, exclusions, conditions, and miscellaneous provisions
declarations - Correct answer-statements that provide information about the
particular property or activity to be insured
what does the declarations page usually contain - Correct answer-name and
address, policy dates, amount of insurance, premium and deductible, and other
relevant info
definitions - Correct answer-key words or phrases are defined so that coverage
under the policy can be determined more easily (insurer-"we,us,out" vs. insured-
"you,your")
insuring agreement - Correct answer-summary of the major promises of the insurer
(what is covered)
named perils - Correct answer-only perils specifically named in the policy are
covered
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,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
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
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, 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
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)
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Questions and Answers
basic parts of an insurance contract - Correct answer-declarations, definitions,
insuring agreement, exclusions, conditions, and miscellaneous provisions
declarations - Correct answer-statements that provide information about the
particular property or activity to be insured
what does the declarations page usually contain - Correct answer-name and
address, policy dates, amount of insurance, premium and deductible, and other
relevant info
definitions - Correct answer-key words or phrases are defined so that coverage
under the policy can be determined more easily (insurer-"we,us,out" vs. insured-
"you,your")
insuring agreement - Correct answer-summary of the major promises of the insurer
(what is covered)
named perils - Correct answer-only perils specifically named in the policy are
covered
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,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
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
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, 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
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)
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
