Exam 10: Protecting Your Property

The principle of indemnity states that the insured can be compensated for an amount equal to his economic loss.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You use a small building on your property to manufacture Widgets.This building [will | will not] be covered by your standard HO policy.

HO coinsurance requires the insured to carry insurance protection equal to the market value of the house.

After packing up to return home for the holidays after the fall semester,Peter stopped at Double T bookstore to sell textbooks.After collecting $25,he headed back to his pickup truck only to find a broken window,the truck broken into,and all his suitcases and personal property gone.The damages to his pickup would be covered by

Nancy's house has been completely destroyed by fire.Prior to the accident,the house had a value of $100,000.Nancy had two separate policies totaling $60,000 each.She may collect $60,000 from each insurance company.

The HO-3 form is a good policy for first-time buyer owners because it is a named perils policy.

Collision protection pays for damage to

Losses as the result of war are covered under most standard homeowners' policies.

If your insurance company makes a payment to you,subrogation is the right of the company to collect from the person causing the accident or from his/her insurance company.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -[HO-2 | HO-3] is an example of a named peril policy.

The minimum limit for personal umbrella policies is generally $1,000,000.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -When considering your possible losses as a property owner,you would be more likely to suffer a very severe loss from [loss of property | liability claims].

Replacement cost coverage is available for renters but requires and extra premium.

Antiques,collections,and boats are adequately protected under a standard homeowner's policy.

The named insured and her passengers would be covered under automobile medical payments insurance.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Jim drove his car into a home and wiped out the car in front of him,the home,and a pedestrian.Jim has auto liability insurance of 25/50/10.He also has medical payments coverage of $1,000 and a $250 deductible on his collision coverage.The following damage resulted: How much will Jim's auto insurance coverage pay for this accident? How much will Jim be personally responsible for?

A peril is a cause of loss.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Sally drove Jessie's car to the mall and was involved in an accident that was her fault.The primary auto insurance that will cover this accident is [Sally's | Jessie's].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Pure no-fault auto insurance has been put into effect in [most states | a few states].

A liability suit could result when