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Unformatted text preview: Jingya Wu RIL 211 Assignment 2 Chp 10 Application question Pg. 205-206 1. a). Most of people do not own planes. If only he gets insurance for his plane, to those people who have no plane, it is not fair because premiums would be substantially higher. b). First, extraordinary hazards are present. A hazard can increase the chance of loss. Because of an extraordinary increase in hazard, a loss may be excluded. Second, coverage can be better provided by other contracts. Some insured things or condition have been insured in other contracts, so exclusions can avoid duplication of coverage and limit coverage to the policy beat designed. Third, there is moral hazard or difficulty in determining and measuring the amount of loss. Finally, the peril may be considered uninsurable by commercial insurers. A given peril may depart from the requirements of an insurable risk. 2. a). (1) Straight deductible: A: 2500-1000= 1,500 B. 3500-1000= 2,500 C. 10,000-1000= 9,000 (2) Annual Aggregate Deductible: A:...
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- Spring '12