Types of Coverage Modifications
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Short-Term Insurance and Reinsurance Coverages. 14 min read, ~2,079 words.
Ordinary deductible pays; franchise deductible pays full once. Policy limit caps the insurer's payment; maximum covered loss with deductible is. Coinsurance scales the excess; with all three, maximum covered loss becomes. Order matters: deductible first, then coinsurance, then limit (DCL). Layer formula: gives the expected payment for any layer.
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 1a
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