Question 1

Which of the following is a not peril?​

Accepted Answer

A)  ​Fire 
B)  ​Wind 
C)  ​Frozen water pipes 
D)  ​Smoking 
A)  ​Fire 
B)  ​Wind 
C)  ​Frozen water pipes 
D)  ​Smoking D

Question 2

In administering a risk-management program,you should use the maximum possible loss as a guide for the dollar amount of coverage to buy.

Accepted Answer

A) True 
 B)False  True

Question 3

Milton can sell his house for $175,000,but he has an outstanding mortgage of $195,000.Rather than selling the house,he is thinking about "helping" it burn to the ground so he could collect the $190,000 for which the house is insured.This would be an example of a ____ hazard.

Accepted Answer

A)  ​moral 
B)  ​morale 
C)  ​physical 
D)  ​fortuitous 
A)  ​moral 
B)  ​morale 
C)  ​physical 
D)  ​fortuitous A

Question 4

For most personal property,replacement cost will be higher than actual cash value.

Accepted Answer

A) True 
 B)False

Question 5

All insurance policies list the perils that will be covered by the policy.

Accepted Answer

A) True 
 B)False

Question 6

After a Halloween night of madness on Sixth Street,Mark and two friends took Mark's four-wheel-driving Bronco for a midnight tour of campus.The next morning campus police found Mark and his Bronco in the middle of the campus fountain.Of the various sections if Mark's auto insurance,damage to the fountain is covered by Mark's ____ coverage,and damage to the Bronco is covered by his ____ coverage.

Accepted Answer

A)  ​comprehensive;collision 
B)  ​property damage liability;comprehensive 
C)  ​comprehensive;property damage liability 
D)  ​property damage liability;collision 
A)  ​comprehensive;collision 
B)  ​property damage liability;comprehensive 
C)  ​comprehensive;property damage liability 
D)  ​property damage liability;collision

Question 7

Classes of insureds consist of insureds who share similar characteristics.____ applicants in the class may qualify for lower premiums.

Accepted Answer

A)  ​Standard 
B)  ​Preferred 
C)  ​Unacceptable 
D)  ​Substandard 
A)  ​Standard 
B)  ​Preferred 
C)  ​Unacceptable 
D)  ​Substandard

Question 8

Risk retention is not appropriate when​

Accepted Answer

A)  ​the worst possible loss is small. 
B)  ​the losses are highly predicable in both frequency and severity. 
C)  ​the retention is due to inaction. 
D)  ​all of these. 
A)  ​the worst possible loss is small. 
B)  ​the losses are highly predicable in both frequency and severity. 
C)  ​the retention is due to inaction. 
D)  ​all of these.

Question 9

Mac and his girlfriend,Jessica,were involved in an accident with another car,which was not Mac's fault.They both sustained minor injuries,and Mac's car needed $2,000 in repairs.Mac had automobile property and liability insurance coverage,and his company paid the covered claims promptly.Which of the following statements regarding this situation is false?

Accepted Answer

A)  ​Mac's insurance company would try to subrogate. 
B)  ​Mac's injuries would be covered. 
C)  ​Jessica's injuries would be covered. 
D)  ​The claims would be paid under Mac's bodily injury and property damage liability coverages. 
A)  ​Mac's insurance company would try to subrogate. 
B)  ​Mac's injuries would be covered. 
C)  ​Jessica's injuries would be covered. 
D)  ​The claims would be paid under Mac's bodily injury and property damage liability coverages.

Question 10

An insurance rate

Accepted Answer

A)  ​is the price charged for each unit of insurance coverage. 
B)  ​should be sufficient to provide coverage for that applicant. 
C)  ​represents the average cost of providing coverage to various groups of insureds. 
D)  ​All of these. 
A)  ​is the price charged for each unit of insurance coverage. 
B)  ​should be sufficient to provide coverage for that applicant. 
C)  ​represents the average cost of providing coverage to various groups of insureds. 
D)  ​All of these.

Question 11

The only type of loss that is related to homeowner's property insurance is damage to or destruction of the property itself.

Accepted Answer

A) True 
 B)False

Question 12

Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost.

Accepted Answer

A) True 
 B)False

Question 13

Insurance agents have the power to enter into,change,and cancel insurance policies on behalf of the companies they represent.

Accepted Answer

A) True 
 B)False

Question 14

The large-loss principle recommends that you insure the losses you can afford to suffer and assume the losses that you cannot afford to suffer.

Accepted Answer

A) True 
 B)False

Question 15

____ coverages can be included in an automobile insurance policy.

Accepted Answer

A)  ​Liability 
B)  ​Medical payments 
C)  ​Physical damage 
D)  ​All of these. 
A)  ​Liability 
B)  ​Medical payments 
C)  ​Physical damage 
D)  ​All of these.

Question 16

All insurance is sold and serviced through insurance agents.

Accepted Answer

A) True 
 B)False

Question 17

Automobile medical payments insurance will pay for the driver's injuries in an auto accident up to the policy limits.

Accepted Answer

A) True 
 B)False

Question 18

The type(s)of insurance you carry but which covers losses suffered by others is called ____ insurance.

Accepted Answer

A)  ​liability 
B)  ​income 
C)  ​auto 
D)  ​homeowner's 
A)  ​liability 
B)  ​income 
C)  ​auto 
D)  ​homeowner's

Question 19

Auto insurance agents need to be informed when a student keeps a car at college.

Accepted Answer

A) True 
 B)False

Question 20

If a homeowner is considering insuring the home computer used in his or her home office,which of the following losses should be identified and evaluated?​

Accepted Answer

A)  ​The computer itself 
B)  ​Extra expenses that may arise because of its loss 
C)  ​Loss of income sustained because of its loss 
D)  ​All of these. 
A)  ​The computer itself 
B)  ​Extra expenses that may arise because of its loss 
C)  ​Loss of income sustained because of its loss 
D)  ​All of these.

Which of the following is a not peril?

In administering a risk-management program,you should use the maximum possible loss as a guide for the dollar amount of coverage to buy.

Milton can sell his house for $175,000,but he has an outstanding mortgage of $195,000.Rather than selling the house,he is thinking about "helping" it burn to the ground so he could collect the $190,000 for which the house is insured.This would be an example of a ____ hazard.

For most personal property,replacement cost will be higher than actual cash value.

All insurance policies list the perils that will be covered by the policy.

Classes of insureds consist of insureds who share similar characteristics.____ applicants in the class may qualify for lower premiums.

Risk retention is not appropriate when

An insurance rate

The only type of loss that is related to homeowner's property insurance is damage to or destruction of the property itself.

Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost.

Insurance agents have the power to enter into,change,and cancel insurance policies on behalf of the companies they represent.

The large-loss principle recommends that you insure the losses you can afford to suffer and assume the losses that you cannot afford to suffer.

____ coverages can be included in an automobile insurance policy.

All insurance is sold and serviced through insurance agents.

Automobile medical payments insurance will pay for the driver's injuries in an auto accident up to the policy limits.

The type(s)of insurance you carry but which covers losses suffered by others is called ____ insurance.

Auto insurance agents need to be informed when a student keeps a car at college.

If a homeowner is considering insuring the home computer used in his or her home office,which of the following losses should be identified and evaluated?

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

Investing Through Mutual Funds

Real Estate and High-Risk Investments

Retirement Planning

Filters

Exam 10: Managing Property and Liability Risk

Which of the following is a not peril?​

In administering a risk-management program,you should use the maximum possible loss as a guide for the dollar amount of coverage to buy.

Milton can sell his house for $175,000,but he has an outstanding mortgage of $195,000.Rather than selling the house,he is thinking about "helping" it burn to the ground so he could collect the $190,000 for which the house is insured.This would be an example of a ____ hazard.

For most personal property,replacement cost will be higher than actual cash value.

All insurance policies list the perils that will be covered by the policy.

Classes of insureds consist of insureds who share similar characteristics.____ applicants in the class may qualify for lower premiums.

Risk retention is not appropriate when​

An insurance rate

The only type of loss that is related to homeowner's property insurance is damage to or destruction of the property itself.

Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost.

Insurance agents have the power to enter into,change,and cancel insurance policies on behalf of the companies they represent.

The large-loss principle recommends that you insure the losses you can afford to suffer and assume the losses that you cannot afford to suffer.

____ coverages can be included in an automobile insurance policy.

All insurance is sold and serviced through insurance agents.

Automobile medical payments insurance will pay for the driver's injuries in an auto accident up to the policy limits.

The type(s)of insurance you carry but which covers losses suffered by others is called ____ insurance.

Auto insurance agents need to be informed when a student keeps a car at college.

If a homeowner is considering insuring the home computer used in his or her home office,which of the following losses should be identified and evaluated?​

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

Investing Through Mutual Funds

Real Estate and High-Risk Investments

Retirement Planning

Filters

Which of the following is a not peril?

Risk retention is not appropriate when

If a homeowner is considering insuring the home computer used in his or her home office,which of the following losses should be identified and evaluated?