Question 1

Earthquake insurance is covered under the standard homeowner's insurance policies.

Accepted Answer

A) True 
 B)False

Question 2

Andy and Ann live in a home with a replacement value of $164,000 and a market value of $175,000.In most cases,what is the minimum amount of homeowner's coverage they must carry to meet the replacement-cost requirement?

Accepted Answer

A) $140,000 
B) $175,000 
C) $164,000 
D) $131,200 
A) $140,000 
B) $175,000 
C) $164,000 
D) $131,200

Question 3

Automobile insurance combines property and liability coverage into a single policy.

Accepted Answer

A) True 
 B)False

Question 4

Personal injury protection pays the driver and passengers in the covered automobile without regard to fault.

Accepted Answer

A) True 
 B)False

Question 5

Floater policies provide insurance protection for

Accepted Answer

A) all personal property. 
B) movable property. 
C) certain classes of personal property. 
D) personal property of others. 
A) all personal property. 
B) movable property. 
C) certain classes of personal property. 
D) personal property of others.

Question 6

When purchasing insurance,you should

Accepted Answer

A) trust your agent to determine your needs and wants. 
B) shop around for the lowest-cost coverage. 
C) stick with your current policy. 
D) understand that the best policies cost the most. 
A) trust your agent to determine your needs and wants. 
B) shop around for the lowest-cost coverage. 
C) stick with your current policy. 
D) understand that the best policies cost the most.

Question 7

Personal property stolen from an automobile is covered by homeowner's insurance.

Accepted Answer

A) True 
 B)False

Question 8

Shelly and Chris have a homeowner's policy with $120,000 coverage,a $1,000 deductible,and required coverage of 80 percent of the replacement cost.Their home recently suffered extensive fire damage in the amount of $92,000.Assuming the replacement value of the home was $160,000,how much will the insurance company pay on this loss?

Accepted Answer

A) $73,600 
B) $85,312 
C) $86,250 
D) $92,000 
A) $73,600 
B) $85,312 
C) $86,250 
D) $92,000

Question 9

Driving under the influence of alcohol is an example of a hazard.

Accepted Answer

A) True 
 B)False

Question 10

A situation involving certain types of perils such as earthquakes and floods where only those people with high probabilities of loss will want to buy the coverage thereby violating the law of large numbers is called

Accepted Answer

A) unaffordable risk. 
B) adverse selection. 
C) the large-loss principle. 
D) the risk of large numbers. 
A) unaffordable risk. 
B) adverse selection. 
C) the large-loss principle. 
D) the risk of large numbers.

Question 11

Assume you own a refrigerator that was purchased new seven years ago for $900,would cost $1200 today,and that it was expected to last ten years when purchased.Similar used refrigerators sell for about $300.What is its actual cash value?

Accepted Answer

A) $270 
B) $300 
C) $360 
D) $900 
A) $270 
B) $300 
C) $360 
D) $900

Question 12

Financial responsibility laws require owners to prove they have enough resources to pay for damages resulting from a car accident.

Accepted Answer

A) True 
 B)False

Question 13

The reduction of risk that occurs with purchasing insurance is primarily due to the

Accepted Answer

A) hazards you face. 
B) principle of indemnity. 
C) law of large numbers. 
D) large-loss principle. 
A) hazards you face. 
B) principle of indemnity. 
C) law of large numbers. 
D) large-loss principle.

Question 14

Craig and Jan Johnson have a health insurance policy with a $750 deductible and 35 percent coinsurance.Craig recently sustained $7,250 in medical expenses.How much will Craig and Jan pay?

Accepted Answer

A) $1,788 
B) $2,538 
C) $3,025 
D) $6,500 
A) $1,788 
B) $2,538 
C) $3,025 
D) $6,500

Question 15

A temporary insurance policy that is typically issued when one applies for insurance is called a(n)

Accepted Answer

A) binder. 
B) insuring agreement. 
C) endorsement. 
D) rider. 
A) binder. 
B) insuring agreement. 
C) endorsement. 
D) rider.

Question 16

Frank tried to enter the Central Expressway and caused a wreck.He had automobile insurance with limits of 30/50/15.What is the maximum this insurance policy would pay for the total of bodily injury liability claims in the accident?
$30,000

Accepted Answer

A) $15,000 
B) $30,000 
C) $50,000 
D) $65,000 
A) $15,000 
B) $30,000 
C) $50,000 
D) $65,000

Question 17

Marsha Lansdale purchased a homeowner's policy that covers all perils except for the specifically named exclusions in the policy.Which of the following statements is (are) true about Marsha's policy?

Accepted Answer

A) The policy is a named-perils policy. 
B) The policy provides higher dollar limits than most homeowner's policies. 
C) The policy is an open-perils policy. 
D) The policy is an open-perils policy and provides higher dollar limits than most homeowner's policies. 
A) The policy is a named-perils policy. 
B) The policy provides higher dollar limits than most homeowner's policies. 
C) The policy is an open-perils policy. 
D) The policy is an open-perils policy and provides higher dollar limits than most homeowner's policies.

Question 18

____ insurance is required in most states.

Accepted Answer

A) Homeowner's 
B) Automobile 
C) Health 
D) Umbrella liability 
A) Homeowner's 
B) Automobile 
C) Health 
D) Umbrella liability

Question 19

The fee charged for insurance protection is called a premium.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following ways of valuing personal property is the highest for most personal property?

Accepted Answer

A) Actual cash value 
B) Purchase price 
C) Taxable value 
D) Replacement value 
A) Actual cash value 
B) Purchase price 
C) Taxable value 
D) Replacement value

Earthquake insurance is covered under the standard homeowner's insurance policies.

Andy and Ann live in a home with a replacement value of $164,000 and a market value of $175,000.In most cases,what is the minimum amount of homeowner's coverage they must carry to meet the replacement-cost requirement?

Automobile insurance combines property and liability coverage into a single policy.

Personal injury protection pays the driver and passengers in the covered automobile without regard to fault.

Floater policies provide insurance protection for

When purchasing insurance,you should

Personal property stolen from an automobile is covered by homeowner's insurance.

Driving under the influence of alcohol is an example of a hazard.

A situation involving certain types of perils such as earthquakes and floods where only those people with high probabilities of loss will want to buy the coverage thereby violating the law of large numbers is called

Assume you own a refrigerator that was purchased new seven years ago for $900,would cost $1200 today,and that it was expected to last ten years when purchased.Similar used refrigerators sell for about $300.What is its actual cash value?

Financial responsibility laws require owners to prove they have enough resources to pay for damages resulting from a car accident.

The reduction of risk that occurs with purchasing insurance is primarily due to the

Craig and Jan Johnson have a health insurance policy with a $750 deductible and 35 percent coinsurance.Craig recently sustained $7,250 in medical expenses.How much will Craig and Jan pay?

A temporary insurance policy that is typically issued when one applies for insurance is called a(n)

Frank tried to enter the Central Expressway and caused a wreck.He had automobile insurance with limits of 30/50/15.What is the maximum this insurance policy would pay for the total of bodily injury liability claims in the accident? $30,000

Marsha Lansdale purchased a homeowner's policy that covers all perils except for the specifically named exclusions in the policy.Which of the following statements is (are) true about Marsha's policy?

____ insurance is required in most states.

The fee charged for insurance protection is called a premium.

Which of the following ways of valuing personal property is the highest for most personal property?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

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Exam 10: Managing Property and Liability Risk

Earthquake insurance is covered under the standard homeowner's insurance policies.

Andy and Ann live in a home with a replacement value of $164,000 and a market value of $175,000.In most cases,what is the minimum amount of homeowner's coverage they must carry to meet the replacement-cost requirement?

Automobile insurance combines property and liability coverage into a single policy.

Personal injury protection pays the driver and passengers in the covered automobile without regard to fault.

Floater policies provide insurance protection for

When purchasing insurance,you should

Personal property stolen from an automobile is covered by homeowner's insurance.

Driving under the influence of alcohol is an example of a hazard.

A situation involving certain types of perils such as earthquakes and floods where only those people with high probabilities of loss will want to buy the coverage thereby violating the law of large numbers is called

Assume you own a refrigerator that was purchased new seven years ago for $900,would cost $1200 today,and that it was expected to last ten years when purchased.Similar used refrigerators sell for about $300.What is its actual cash value?

Financial responsibility laws require owners to prove they have enough resources to pay for damages resulting from a car accident.

The reduction of risk that occurs with purchasing insurance is primarily due to the

Craig and Jan Johnson have a health insurance policy with a $750 deductible and 35 percent coinsurance.Craig recently sustained $7,250 in medical expenses.How much will Craig and Jan pay?

A temporary insurance policy that is typically issued when one applies for insurance is called a(n)

Frank tried to enter the Central Expressway and caused a wreck.He had automobile insurance with limits of 30/50/15.What is the maximum this insurance policy would pay for the total of bodily injury liability claims in the accident? $30,000

Marsha Lansdale purchased a homeowner's policy that covers all perils except for the specifically named exclusions in the policy.Which of the following statements is (are) true about Marsha's policy?

____ insurance is required in most states.

The fee charged for insurance protection is called a premium.

Which of the following ways of valuing personal property is the highest for most personal property?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters