4.2.1 Insurance Payment with Policy Limit Only Flashcards
(5 cards)
1
Q
What is a policy limit in insurance, and how does it affect the insurer’s payment?
A
A policy limit is the maximum amount an insurer will pay for a covered loss.
If the loss exceeds this limit, the insurer only pays up to the limit, and the insured must cover the rest.
2
Q
how is a policy limit expressed mathematically with an insurance payment?
A
let u be the policy limit, Y be the reimbursment/insurance payment and X be the loss amt:
3
Q
how is a policy limit expressed mathematically with an unreimbursed loss?
A
4
Q
how do you calc the expected insurance payment when theres a policy limit when X is discrete?
A
5
Q
how do you calc the expected insurance payment when theres a policy limit when X is continuous?
A
