RMIN Test 3

Land, all structures permanently attached to the land, and whatever is growing on the land

all property other than real property; ex: cars, money, clothes, furniture, animals, airplanes, etc

occurs when there is damage to property

occurs when a direct loss causes expenses to increase or revenues to decline

two; the insured and the insurer

intangible goods, like copyrights, and raw land

loss through legal liability for harm caused to others

intorduction of a third party

bodily injury, property damage, personal injury, legal expenses

liability for losses a person may incur because his or her body and/ or mind has been harmed. ex: medical bills, pain and suffering, punitive damages, loss of services

indirect and direct losses; loss may be due to a loss from actual damage to the property, as well as loss of use of the property

result from libel, slander, invasion of privacy, false arrest, etc

defense and legal costs up to the policy limits

damages with a specific dollar amount attached to them; ex: medical bills

damages that are difficult to assign a dollar amount to, are typically large numbers; ex: pain and suffering

wrongs against society (murder, robbery, assault)

wrongs against individuals or organizations (breach of contract, torts)

legal injury (when a person's rights are wrongfully invaded) or wrong to another that arises from actions other than breach of contract

failure to exercise the degree of care required by law; conduct that a reasonable individual would exercise to prevent harm

failure to do something; ex: failure to use a turn signal

doing something

an act that is unintentional, but is done voluntarily

pertaining to corporations; one is liable not only for one's own actions but also for negligent acts of agents acting within the scope of employment

• 1. Contributory Negligence
• 2. Assumed Risk
• 3. Guest- Host Statutes

both parties are to blame in a given accident; pure risk policies state that a plaintiff cannot collect from the defendant at all, even if the defendant was 90% to blame

defendant may raise the defense that the plaintiff has no cause for action because the plaintiff assumed the risk of harm from: the conduct of the defendant, the condition of the premises, or the defendant's product

relate to the standard care of an automobile driver to a passenger; lower required level of care by driver

the liability of the defendant is reduced by the extent to which the plaintiff was contributively negligent; pro rates the damages between parties

a plaintiff who was contributively negligent may still have a cause of action towards the defendant if it can be shown that the defendant had a "--term--" before the accident to avoid injuring the plaintiff but failed to do so

• "the thing speaks for itself"
• plaintiff may sometimes collect without actually proving negligence on the part of the defendant; defendant proves he or she did not act negligently (guilty until proven innocent)
• common for medical malpractice claims

• 1. defendant is in a position to know the cause of the accident; the plaintiff is not
• 2. defendant had exclusive control of the instrumentality that caused the accident
• 3. the use of the instrumentality would not usually cause injuries without the existence of negligence

when an accident occurs and several different parties are negligent; the plaintiff may sue and collect from multiple negligent parties

created by the Federal government to help fund cleanup cost of major pollution sites; 80% of funds are spent on overhead (legal fees, etc), 20% spent on actually cleaning up environment

• Contractual
• employer-employee
• property owner-tenant
• consumption or use of products
• completed operations
• professional acts
• principal-agent

one's liability may be imputed to another by contract

• employers are still subject to the law of negligence with respect to employment not covered by workers' comp laws; duties owed to employees:
• must provide a safe place to work
• must employ individuals reasonably competent to carry out their tasks
• must warn of danger
• must furnish appropriate and safe tools
• must setup and enforce proper rules of conduct of employees as they relate to safe working procedures

the tenant or owner owes a certain degree of care to those who enter the premises (invitees, licensees, trespassers); current trend is to abolish classifications and hold the occupier of the land liable for failure to exercise due care

individuals who are invited on the premises for their own benefit as well as the benefit of the landlord or tenant (hotel guests, customers); require a higher level of care (warning + a positive action)

one who is on the premises for a legitimate purpose with the permission of the occupier (meter reader, mailman)

All those other than invitees or licensees who enter on the premises; no care is owed to trespassers, but an owner cannot deliberately injure a trespasser

generally, the tenant of a property takes on whatever duty the landlord owes to members of the public

liability of the occupier of land may be changed so that a trespassing child is considered to be an invitee because society has a high duty of care to protect children

a manufacturer, wholesaler, or retailer is required to exercise reasonable care and to maintain certain standards in the handling and selection of the goods which it deals if the injury to person or property results from the use of a faulty product (which may be grounds for legal action)

a manufacturer or distributor is held liable for the injury to a person caused by a defective product, regardless of whether the person injured is a purchaser, consumer, or a third party

the damage must occur after the contractor has completed the work and the work has been accepted by the owner or abandoned by the contactor; ex: a sprinkler installer is liable if water damage occurs from an improperly installed system

a seller of services is required to use reasonable care not to injure others in the performance of those services

• Car owned or leased by an individual or jointly by a married couple
• Private passenger car used for pleasure or business
• Pickup truck or van used in farming or transportation of goods

• A: Liability
• B: Medical Payments
• C: Uninsured Motorists
• D: Physical Damage- collision and other than collison
• E: Duties After Loss
• F: General Provisions

• Intentional injury
• Damage to own property (covered elsewhere)
• Damage caused while using your car as a taxi
• Using vehicles without permission
• Damage caused if a driver in auto business is using car (covered elsewhere)
• Damage caused while using a motorcycle
• Other vehicles (owned and regularly used) not listed in Declarations

you (the policyholder) as well as occupants of the car, but not those you hit; you are also covered as a pedestrian if struck by a car

• No policy applies at the time of accident or inadequate limits
• Hit-and-run vehicle
• Tort-feasor insured by insolvent (bankrupt) insurer
• Tort-feasor violates the conditions of their contract

when your car hits another car or object; paid regardless of fault

• Loss from any of the following perils:
• Missiles or falling objects
• Fire
• Theft or larceny
• Explosion or earthquake
• Windstorm
• Hail, water, or flood
• Malicious mischief or vandalism
• Riot or civil commotion
• Contact with a bird or animal
• Glass breakage

pays off a financed car if it is totaled

hypothetical model that is similar to homeowners' insurancel no fault is determined in an accident; each party's insurance company pays for his or her own damages; no litigation is necessary

19 cents per dollar because of the elimination of lawyer fees and pain and suffering

right to sue is restricted, not eliminated; some states set a certain dollar threshold that must be reached before one can be taken to court.

coverage that restricts the right to sue in exchange for lower premiums; only available in KY, NJ, and PA

exponentially

• Human Life Approach
• Needs Approach

replaces the present value of a person's income stream

looks at other factors in policyholder's life and pays accordingly; depends more on lifestyle than income, so it requires more information

• Spouse- only after retirement
• Dependents- receive 'survivor's benefits until they turn 18

in the case of premature death, a pension plan pays survivor's benefits in the same fashion as Social Security

• Insurance Company
• Insured
• Beneficiary

amount on a life insurance policy that is paid to the beneficiaries

person who receives benefits upon insured's death; primary and secondary

receives the face amount of a policy upon the insured's death

receives face amount if the primary beneficiary is also deceased

beneficiary that can be changed at any time be the policyholder

beneficiary that cannot be changed by the policyholder without the consent of the beneficiary

• Term Life
• Whole Life

provides coverage for a certain period of time; a pure risk protection policy; can be renwable, convertible, and varies in structure

has a pure risk and a savings component; permanent insurance with a cash value

policyholder makes consisten payments and beneficiaries receive face amount

policyholder only pays a certain amount for a certain time and the money basically sits until death

people tend to overpay for life insurance at younger ages, and underpay ot older ages

less frequent pay structures

individuals cannot deduct life insurance premiums from tax liability; they come out of after tax income

depends on how benefits are paid; lump sum death benefits do not have to be reported as taxable income. some portion of annuities/ periodic payments of benefits generally are added to taxable income.

no; not until the policy is surrendered for its cash value

permanent insurance with a fixed premium that pays upon the insured's death; however, the payout amount of the death benefit is not fixed; it is linked to investment portfolios and thus varies with the market

stable death benefit; only pays face amount of policy (cash value plus whatever amount is necessary to bring the total to the specified amount); only exists on paper

fluctuating death benefits (cash value of policy plus face value of policy); as cash value of the policy increases over time, so does the death benefit

allows for more flexibility of premium payments by the policyholder; benefits are also fleixble and can vary with the markets to benefit the policyholder

offered in connection with installment sales of consumer durables (e.g. automobiles;) decreasing term insurance issued without medical examination that lasts for the life of the loan

hybrid of term and whole life insurance; lasts for a certain term (typically 10-20 years), if insured dies, beneficiaries receive face amount of policy and if insured lives he or she receives the face amount

they are treated as investments and taxed as usual, but if a beneficiary receives a lump sum amount, it isnt taxed

• lower mortality rates
• improved technology
• higher malpractice liability insurance premiums

• 1. Fee-for-service
• 2. Managed Care

• HMO
• PPO
• POS
• PSO

policyholder pays a premium and insurer covers majority or all od medical bills/expenses

• 1. Prevention: to keep costs down
• 2. Provide contracts to specific health care providers

an HMO set up by health care providers/ hospitals

focuses on keeping costs low to members and is designed to provide members comprehensive health services withi; each member has a PCP that he or she sees primarily and he or she must be referred to specialists

'open-ended HMO' that will cover majority of treatments from physicians within a network and part of payments for treatments outside network; also has PCP 'gatekeeper' to specialists

will cover treatments within network and part of treatments outside network; no PCP so members can see a specialist without a referral; make up over 50% of market

because of the randomness of the event that make probability difficult to calculate; no large pool of similar exposure units so therefor no diversification

offered through employer; employer commits to pay a certain amount of benefits, which is usually tied to years with company or rank; employer assumes wisj of having enough cash on hand to pay out policy

employer doesnt guarantee benefit amountss; employer puts a certain amount into an account every year until retirement and benefits are received from this pension fund; employer has no investment risk

pre-tax money is put into a savings account which cannot be accessed until retirement; money in account can be put into any investment vehicle and isnt taxed

certain amount is paid in monthly and retirement benefits are guaranteed to be paid on a regular basis until death (hedge on outliving assets); risk of outliving assets is transferred to insurance company, but death stops stream of benefits (no beneficiaries)