RMI-4224 Lecture Notes - Lecture 2: Loss Ratio, Subrogation, Co-Insurance

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Indirect: direct- something actually happened to something, tornado blew roof off business. Indirect- consequential loss: (cid:862)i (cid:272)a(cid:374)"t ope(cid:396)ate(cid:863) (cid:271)e(cid:272)ause of (cid:449)hat happe(cid:374)ed, blanket vs. Specific: specific- this amount for this segment, blanket- spread across everything. Underwriting: loss ratio- losses and reserves/earned premium, underwrite to a loss ratio less than 1, expense ratio- insurance carrier overhead/earned premium, combined ratio- loss ratio and expense ratio together, rate vs. Construction of an insurance policy: declarations- unique to that risk, definitions- if its bolded or in quotations then term is defined. Insureds: named- to which the contract applies, first named- person or entity or thing that controls the contract, automatic, additional, policy period- most are annual policies now, policy territory, cancellation vs. non-renewal, deductibles, other insurance. Policy limits: per occurrence (accident, per person- generally in automobile, aggregate limit, split limits, combined single limits- most insurers prefer this, restoration/non-reduction of limits.

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