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RMI 300 Final Exam Questions and Answers 100% Pass
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RMI 300 Final Exam Questions and Answers 100% Pass What are the different parts of an insurance contract? - ANSWER-1. Declarations page 2. Insuring agreement 3. Exclusions 4. Conditions 5. Attachments What are the different parts in the declarations page? - ANSWER-1. Exposure information 2....

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  • November 11, 2024
  • 38
  • 2024/2025
  • Exam (elaborations)
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  • rmi 300 final exam questions and answers 100 pass

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RMI 300 Final Exam Questions and

Answers 100% Pass


What are the different parts of an insurance contract? - ANSWER✔✔-1. Declarations page


2. Insuring agreement


3. Exclusions


4. Conditions


5. Attachments


What are the different parts in the declarations page? - ANSWER✔✔-1. Exposure information


2. Insurer and policy information


What is the exposure information used for in the declarations page of an insurance contract? -

ANSWER✔✔-Underwriting purposes


What does the exposure information contain in the declarations page of an insurance contract? -

ANSWER✔✔-1. Insured name, location, type of organization and activities, etc


2. Possible misrepresentation/concealment (this is where it is most likely to occur!) (insurance is a

contract of utmost good faith)


Insurance is a contract of ______ - ANSWER✔✔-Utmost good faith




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, Copyright © OLIVIAWEST2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED


What does the insurer and policy information contain in the declarations page of the insurance contract?

- ANSWER✔✔-1. Premium due, policy period, coverage territory, valuation method


2. Covered causes of loss (perils) (named "broad" perils and open "special" perils)


3. Limit


4. Deductible


Named Peril - ANSWER✔✔-Also called a "broad peril" and means that the covered losses are named in

the contract


Open Perils - ANSWER✔✔-Also called "special perils" and means that every loss is covered unless it is

specified that it is excluded in the contract


Limit - ANSWER✔✔-Maximum amount an insurer will pay, also called the face value


Per occurrence limit - ANSWER✔✔-Separate limit for each event covered by the policy


Annual aggregate limit - ANSWER✔✔-Total limit for the entire year (or policy period)


Deductible - ANSWER✔✔-Insured retains risk below a dollar amount (200 deductible on a 1000 dollar

loss? you pay 800)


Per occurrence and annual aggregate deductible? - ANSWER✔✔-Per occurence = separate deductible for

each event covered by the policy




Annual aggregate = total deductible amount for the entire year




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How is a deductible stated other than an actual number value? - ANSWER✔✔-Period of time or a

percentage of loss (called a copay or coinsurance)


Limit of 100,000; loss of 80,000 and 5,000 deductible?


Limit of 100,000; loss of 110,000 and 5,000 deductible?


Limit of 100,000; loss of 80,000, deductible of 5,000 and copay of 20%?


What does insurance company pay? How much do you retain? - ANSWER✔✔-75,000; 5000




100,000; 10,000




80,000-5000-(80,000-5000)*.2 = 60,000; 20,000


Stop loss agreement - ANSWER✔✔-Limits the total "out of pocket" expense


Why do we have deductibles? - ANSWER✔✔-1. Limit moral hazard


2. Lowers our premiums (expected loss lower if we retain, which lowers premium)


Latent - ANSWER✔✔-Don't know until the future


Incontestability - ANSWER✔✔-In a life insurance contract, and it is that after 2 years of you experiencing

a loss and the insurance company finds out you misrepresented something, they cannot come back and

recover the money UNLESS you misrepresented your age




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, Copyright © OLIVIAWEST2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED


Manuscript policy - ANSWER✔✔-Policyholder has input into the insurance agreement, then it is not a

contract of adhesion, which makes the court to not favor the contract towards the insured when

interpreting the contract (just look at most reasonable interpretation)


Components of insuring agreement in the insurance contract? - ANSWER✔✔-1. Insurer's consideration

(giving up possible benefit of not having to pay you)


2. Types of losses


Types of losses under the insuring agreement in the insurance contract? - ANSWER✔✔-1. Direct vs

indirect (consequential)


2. Liability often covers legal defense costs (but not fines)


Why would an insurance company want to represent you in a lawsuit if you are covered for that lawsuit?

- ANSWER✔✔-Moral hazard! You will be a lot more likely to settle because you know that you will not

have to pay


Declaration - ANSWER✔✔-Statement about a truth


Insuring agreement - ANSWER✔✔-Promise of the insurance company


Exclusions - ANSWER✔✔-Loss situations not covered in the policy (categorized by purpose)


Components of exclusions under the insurance contract? - ANSWER✔✔-1. Avoid insurer catastrophe


2. Standardize the risk


3. Limit duplicate coverage


4. Maintain fortuity




Copyright ©Stuvia International BV 2010-2024 Page 4/38

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