Question 1

Automobile liability insurance covers the insured when he or she is held responsible for losses suffered by others.

Accepted Answer

A) True 
 B)False

Question 2

The process of deciding which insurance applicants to insure is called

Accepted Answer

A)  ​underwriting. 
B)  ​determining a premium. 
C)  ​completing an application. 
D)  ​issuing the policy. 
A)  ​underwriting. 
B)  ​determining a premium. 
C)  ​completing an application. 
D)  ​issuing the policy.

Question 3

Bruce's 2003 Chevrolet Malibu is pretty old now,and its resale value is low.Since he is always interested in saving insurance premium dollars when appropriate,which of the following types of insurance should he consider dropping?​

Accepted Answer

A)  ​Property damage liability 
B)  ​Uninsured motorist 
C)  ​Collision 
D)  ​All of these. 
A)  ​Property damage liability 
B)  ​Uninsured motorist 
C)  ​Collision 
D)  ​All of these.

Question 4

The primary difference between a speculative risk and a pure risk is that there is a chance for ____ in a speculative risk but a chance for ____ in a pure risk.

Accepted Answer

A)  ​gain and loss;only gain 
B)  ​gain and loss;only loss 
C)  ​only gain;gain and loss 
D)  ​only loss;gain and loss 
A)  ​gain and loss;only gain 
B)  ​gain and loss;only loss 
C)  ​only gain;gain and loss 
D)  ​only loss;gain and loss

Question 5

Minor injuries to passengers in your car would be covered by which of the following parts of your auto insurance policy?

Accepted Answer

A)  ​Bodily injury liability 
B)  ​Medical payments 
C)  ​Uninsured motorist 
D)  ​None of these. 
A)  ​Bodily injury liability 
B)  ​Medical payments 
C)  ​Uninsured motorist 
D)  ​None of these.

Question 6

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 7

In insurance,risk is defined as the ____ a financial loss will occur.

Accepted Answer

A)  ​uncertainty about whether 
B)  ​odds that 
C)  ​chances that 
D)  ​probability that 
A)  ​uncertainty about whether 
B)  ​odds that 
C)  ​chances that 
D)  ​probability that

Question 8

Meeting an 80 percent replacement-cost requirement in your homeowner's insurance enables you to avoid incomplete coverage on small losses to your dwelling.

Accepted Answer

A) True 
 B)False

Question 9

Property insurance does not take effect until after the application has been accepted by the insurance company even if payment has been made to an agent.

Accepted Answer

A) True 
 B)False

Question 10

____ is the most the insurance company would pay for both bodily injury and property damage liability in any one accident if the insured carried 300/500/200 coverage.

Accepted Answer

A)  ​$300,000 
B)  ​$500,000 
C)  ​$700,000 
D)  ​$800,000 
A)  ​$300,000 
B)  ​$500,000 
C)  ​$700,000 
D)  ​$800,000

Question 11

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 12

Most homeowner's policies will cover contents and personal property for up to 50 percent of the insured value of the house.

Accepted Answer

A) True 
 B)False

Question 13

Buying insurance is the preferable way to handle risk for nearly all potential losses faced.

Accepted Answer

A) True 
 B)False

Question 14

Risk avoidance is always a practical way of handling risk.

Accepted Answer

A) True 
 B)False

Question 15

The amount of reimbursement for any loss under homeowner's insurance will be calculated using the actual-cash-value formula.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is not true about insurance deductibles?

Accepted Answer

A)  ​The higher the deductible,the higher the insurance premium. 
B)  ​You should always choose the highest deductible you can afford. 
C)  ​Deductibles are common in property insurance policies. 
D)  ​A deductible requires you to pay the first portion of the loss. 
A)  ​The higher the deductible,the higher the insurance premium. 
B)  ​You should always choose the highest deductible you can afford. 
C)  ​Deductibles are common in property insurance policies. 
D)  ​A deductible requires you to pay the first portion of the loss.

Question 17

Homeowner's insurance includes

Accepted Answer

A)  ​property coverage. 
B)  ​liability coverage. 
C)  ​life insurance coverage. 
D)  ​both property coverage and liability coverage. 
A)  ​property coverage. 
B)  ​liability coverage. 
C)  ​life insurance coverage. 
D)  ​both property coverage and liability coverage.

Question 18

Property owned for business purposes is covered under your homeowner's policy.

Accepted Answer

A) True 
 B)False

Question 19

Losses to ____ are not covered under a standard homeowner's policy.

Accepted Answer

A)  ​detached structures on your property 
B)  ​your landscaping 
C)  ​the lot that your house is built on 
D)  ​your personal property 
A)  ​detached structures on your property 
B)  ​your landscaping 
C)  ​the lot that your house is built on 
D)  ​your personal property

Question 20

Insurance coverage may be denied if policy conditions are not met.

Accepted Answer

A) True 
 B)False

Automobile liability insurance covers the insured when he or she is held responsible for losses suffered by others.

The process of deciding which insurance applicants to insure is called

Bruce's 2003 Chevrolet Malibu is pretty old now,and its resale value is low.Since he is always interested in saving insurance premium dollars when appropriate,which of the following types of insurance should he consider dropping?

The primary difference between a speculative risk and a pure risk is that there is a chance for in a speculative risk but a chance for in a pure risk.

Minor injuries to passengers in your car would be covered by which of the following parts of your auto insurance policy?

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

In insurance,risk is defined as the ____ a financial loss will occur.

Meeting an 80 percent replacement-cost requirement in your homeowner's insurance enables you to avoid incomplete coverage on small losses to your dwelling.

Property insurance does not take effect until after the application has been accepted by the insurance company even if payment has been made to an agent.

____ is the most the insurance company would pay for both bodily injury and property damage liability in any one accident if the insured carried 300/500/200 coverage.

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?

Most homeowner's policies will cover contents and personal property for up to 50 percent of the insured value of the house.

Buying insurance is the preferable way to handle risk for nearly all potential losses faced.

Risk avoidance is always a practical way of handling risk.

The amount of reimbursement for any loss under homeowner's insurance will be calculated using the actual-cash-value formula.

Which of the following statements is not true about insurance deductibles?

Homeowner's insurance includes

Property owned for business purposes is covered under your homeowner's policy.

Losses to ____ are not covered under a standard homeowner's policy.

Insurance coverage may be denied if policy conditions are not met.

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

Automobile liability insurance covers the insured when he or she is held responsible for losses suffered by others.

The process of deciding which insurance applicants to insure is called

Bruce's 2003 Chevrolet Malibu is pretty old now,and its resale value is low.Since he is always interested in saving insurance premium dollars when appropriate,which of the following types of insurance should he consider dropping?​

The primary difference between a speculative risk and a pure risk is that there is a chance for ____ in a speculative risk but a chance for ____ in a pure risk.

Minor injuries to passengers in your car would be covered by which of the following parts of your auto insurance policy?

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

In insurance,risk is defined as the ____ a financial loss will occur.

Meeting an 80 percent replacement-cost requirement in your homeowner's insurance enables you to avoid incomplete coverage on small losses to your dwelling.

Property insurance does not take effect until after the application has been accepted by the insurance company even if payment has been made to an agent.

____ is the most the insurance company would pay for both bodily injury and property damage liability in any one accident if the insured carried 300/500/200 coverage.

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?

Most homeowner's policies will cover contents and personal property for up to 50 percent of the insured value of the house.

Buying insurance is the preferable way to handle risk for nearly all potential losses faced.

Risk avoidance is always a practical way of handling risk.

The amount of reimbursement for any loss under homeowner's insurance will be calculated using the actual-cash-value formula.

Which of the following statements is not true about insurance deductibles?

Homeowner's insurance includes

Property owned for business purposes is covered under your homeowner's policy.

Losses to ____ are not covered under a standard homeowner's policy.

Insurance coverage may be denied if policy conditions are not met.

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

Bruce's 2003 Chevrolet Malibu is pretty old now,and its resale value is low.Since he is always interested in saving insurance premium dollars when appropriate,which of the following types of insurance should he consider dropping?

The primary difference between a speculative risk and a pure risk is that there is a chance for in a speculative risk but a chance for in a pure risk.