Deck 10: Property and Motor Vehicle Insurance

Question 1

Possible losses due to negligence resulting in bodily injury or property damage to others are called ____________ risks.

A)speculative
B)liability
C)property
D)personal
E)commercial

Answer 1

liability

Question 2

A household inventory helps to provide evidence of ownership and value of items covered by home insurance.

Answer 2

True

Question 3

The purpose of an assigned risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.

Answer 3

True

Question 4

Homeowner's insurance refers to coverage also available to condominium owners.

Question 5

Replacement value for settling property insurance claims is less costly than the actual cash value method.

Question 6

A home made of wood is more expensive to insure than a comparable brick structure.

Question 7

The 100/300 amounts for bodily injury liability insurance refer to the costs of insurance coverage.

Question 8

No-fault insurance systems have always reduced the time and costs involved in settling auto injury claims.

Question 9

An umbrella policy provides additional personal liability coverage beyond the basic amounts in most homeowner policies.

Question 10

The uncertainties of direct and indirect losses to personal or real property due to fire,wind,accidents,theft,and other hazards are called ____________ risks.

A)personal
B)business
C)property
D)liability
E)speculative

Question 11

The driver classification category is based on automobile style,model,and value of the vehicle.

Question 12

The comprehensive form (HO-5)of homeowner's insurance includes coverage for damage due to floods.

Question 13

Personal belongings that have a high value can be protected with a personal property floater.

Question 14

Medical payments coverage in an automobile insurance policy pays for the costs of injuries to persons in the driver's vehicle.

Question 15

Medical payments coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others.

Question 16

Peril is defined as:

A)the refusal by an insurance company to pay for a loss.
B)the cause of risk.
C)the cause of a possible loss.
D)an uncertainty as to loss.
E)safety.

Question 17

Property damage liability coverage would pay for damage to another vehicle for which you were at fault.

Question 18

The purpose of insurance is to help protect you and your family against possible financial loss..

Question 19

Defective house wiring is an example of a:

A)hazard.
B)peril.
C)risk.
D)speculation.
E)planned danger.

Question 20

Risk management is an organized strategy for protecting and conserving assets and people.

Question 21

Renter's insurance would include coverage for:

A)flood damage.
B)personal property.
C)house and other structures.
D)umbrella liability.
E)earthquake damage.

Question 22

Georgette Valentine has expensive photography equipment for use in her hobby.Which one of the following types of coverage would pay for damage or theft of this equipment?

A)Umbrella policy
B)Personal liability
C)Additional living expense coverage
D)Personal property floater
E)Coinsurance floater

Question 23

If a homeowner leaves toys on stairs that results in injury to a delivery person,this may be ruled as:

A)vicarious liability.
B)negligence.
C)assigned risk.
D)umbrella coverage.
E)coinsurance.

Question 24

An umbrella policy is designed to cover:

A)expensive personal property.
B)additional buildings on your property.
C)property when traveling away from home.
D)major personal liability claims.
E)flood damage.

Question 25

Which one of the following is not covered by renter's insurance?

A)Financial loss due to damage of personal property
B)Fire damage to the building's roof from faulty wiring
C)Additional living expenses
D)Financial loss due to loss of personal property
E)personal liability

Question 26

High winds cause damage to trees,shrubs,and plants.This insurance claim would be covered under the ____________ component of homeowner's insurance.

A)additional living expenses
B)personal property
C)house and other structures
D)personal liability
E)specialized coverage

Question 27

Kelly and Bob Walton recently purchased a new home and desire coverage for all causes of loss or damage except those specially excluded by the policy.They should obtain the ____________ form of homeowner's policy.

A)basic
B)broad
C)special
D)modified coverage
E)condominium

Question 28

The legal responsibility for the financial cost of another person's losses or injuries is referred to as:

A)theft.
B)robbery.
C)liability.
D)assigned risk.
E)collusion.

Question 29

Which of the following would be covered by a home insurance policy?

A)Hospital expenses for surgery
B)Injury to animals, birds, or fish
C)Accidental injury to a coworker on the job
D)Damage to your roof from hail
E)Theft of business supplies from your office

Question 30

The ____________ coverage of a home insurance policy would cover accidental damage to another person's property by a member of your family.

A)supplementary
B)personal property
C)medical payments
D)additional living expenses
E)voluntary liability

Question 31

Negligence refers to:

A)failure to take ordinary or reasonable care.
B)cancellation of insurance.
C)property damage.
D)high risk insurance coverage.
E)common hazards in our society.

Question 32

Which of the following is considered personal property for home insurance coverage?

A)Automobile
B)Garage
C)Furniture
D)House
E)Trees and shrubs

Question 33

Most home insurance policies provide coverage for minor accidental injuries on your property under:

A)earthquake damage.
B)flood damage.
C)an umbrella liability.
D)personal property floaters.
E)medical payments coverage.

Question 34

Starting a small business that may or may not succeed is an example of ___________ risk.

A)speculative
B)pure
C)commercial
D)personal
E)liability

Question 35

Eating a balanced diet and exercising is an example of risk _____.

A)shifting
B)acceptance
C)reduction
D)assumption
E)avoidance

Question 36

Wearing a seat belt in an automobile to protect yourself against the risk ofinjury in an automobile accident is an example of risk _____.

A)reduction
B)acceptance
C)pooling
D)shifting
E)avoidance

Question 37

The additional living expenses component of a homeowner's insurance policy is designed to:

A)pay for temporary housing while your home is repaired.
B)cover damage to property while away from home.
C)reimburse a homeowner for damage done by a visitor.
D)pay for medical expenses of people injured on your property.
E)pay for repairs caused by fire or other hazards.

Question 38

Which form of a homeowner's policy expands coverage to include replacement cost on contents?

A)Comprehensive Form (HO-5)
B)Special Form (HO-3)
C)Condominium Form (HO-6)
D)Tenants Form (HO-4)
E)Country Home Form (HO-7)

Question 39

While cleaning your home,a worker damages some furniture.You take action against the worker's employer to cover the cost of the damage.This is an example of a ____________ liability.

A)umbrella
B)assigned
C)common situation
D)peril
E)vicarious

Question 40

Your home insurance provides for replacement value for personal property losses.A microwave is stolen.It cost $300 two years ago and has an expected life of six years.A comparable microwave costs $400 today.What amount will the insurance company pay?

A)$100
B)$150
C)$200
D)$350
E)$400

Question 41

____________ protects you against financial loss when your car damages other vehicles,street signs,or buildings.

A)Collision
B)Comprehensive physical damage
C)Property damage liability
D)No-fault insurance
E)Assigned risk coverage

Question 42

The 25 in 50/100/25 refers to ____________ coverage.

A)collision
B)bodily injury liability
C)comprehensive physical damage
D)medical payments
E)property damage liability

Question 43

Which one of the following types of coverage would pay for damage to your automobile in an accident for which you were at fault?

A)Property damage liability
B)Collision
C)Comprehensive physical damage
D)No-fault insurance
E)Assigned risk pool coverage

Question 44

____________ coverage would pay for damage to your vehicle caused by an accident when another driver with insurance was legally at fault.

A)Property damage liability
B)Collision
C)Comprehensive physical damage
D)Uninsured motorists protection
E)Assigned risk

Question 45

____________ provides coverage for the risk of financial loss due to legal expenses,medical expenses,lost wages,and other expenses associated with injuries caused by an automobile accident for which you were responsible.

A)Medical payment
B)Bodily injury liability
C)Uninsured motorists protection
D)No-fault insurance
E)Comprehensive insurance

Question 46

The 100 in 100/300/50 refers to:

A)property damage liability coverage.
B)the amount of the deductible.
C)collision coverage.
D)the total coverage for an accident.
E)the limit for bodily injury claims that can be paid to one person.

Question 47

The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

A)replacement value
B)actual cash value
C)umbrella
D)endorsement
E)personal property floater

Question 48

Which one of the following coverages would pay for health care for friends who were injured in your automobile?

A)Medical payments
B)Bodily injury liability
C)Collision
D)Uninsured coverage
E)Underinsured coverage

Question 49

The purpose of financial responsibility laws is to:

A)reduce auto insurance costs.
B)assist poor drivers in getting insurance coverage.
C)protect the public from physical harm and property damage losses caused by drivers.
D)require uninsured motorists coverage.
E)help drivers with a clean driving record.

Question 50

Wind damage occurs to your car costing $800 to repair.If you have a $100 deductible for collision and full coverage for comprehensive,what portion of the claim will the insurance company pay?

A)$100
B)$200
C)$500
D)$700
E)$800

Question 51

Which of the following is a system in which drivers involved in an accident collect medical expenses,lost wages,and related injury costs from their own insurance company?

A)Assigned risk pool
B)Financial responsibility coverage
C)Comprehensive system
D)No-fault insurance
E)Uninsured motorists protection

Question 52

Comprehensive coverage would cover financial losses due to:

A)injuries caused by a driver without insurance.
B)damage to your car in an accident for which you were at fault.
C)damage to your car caused by wind or hail.
D)legal action against you for an accident.
E)damage to a neighbor's tree caused by your car.

Question 53

Which one of the following factors is used to determine a person's driver classification?

A)Age
B)Type and age of vehicle
C)Claims in your geographic area
D)Insurance company claim processing costs
E)State insurance premium regulations

Question 54

Your home insurance policy has a $250 deductible.If a small fire causes $600 damage to your home,what amount of the claim would the insurance company pay?

A)$250
B)$350
C)$450
D)$600
E)Not able to determine from this information

Question 55

Which one of the following refers to a category based on the driver's age,sex,marital status,and driving habits that is used to set automobile insurance premiums?

A)Rating territory
B)Assigned risk pool
C)No-fault system
D)Driver classification
E)Rating tiers

Question 56

Your geographic location is a major factor in determining the ____________ used to calculate your automobile insurance premiums.

A)driver classification
B)assigned risk pool
C)coverage level
D)legal responsibilities
E)rating territory

Question 57

Thad Joslin was judged at fault in an automobile accident.Three others were awarded damages of $150,000,$75,000,and $75,000.Thad has 100/300 bodily injury liability coverage.What amount,if any,would not be covered by his insurance?

A)$150,000
B)$100,000
C)$50,000
D)$25,000
E)None.The total amount would be covered by insurance.

Question 58

Henry Edwards was injured in an accident caused by another driver who did not have insurance.Henry's medical expenses would be covered by:

A)medical payments.
B)collision.
C)bodily injury liability.
D)uninsured motorists protection.
E)no-fault coverage.

Question 59

Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?

A)Personal property floater
B)An endorsement
C)Coinsurance clause
D)Umbrella coverage
E)Assigned risk clause

Question 60

Home insurance rates are affected most directly by:

A)the profits of the insurance company.
B)insurance agents' commission.
C)government regulations that set premiums.
D)processing costs of claims.
E)the number of claims in an area.

Question 61

A system that requires each insurance company operating in a state to provide coverage to individuals who may have had many expensive claims is referred to as:

A)no-fault insurance.
B)an assigned risk pool.
C)premium discounts.
D)equal opportunity insurance.
E)comprehensive coverage.

Question 62

Nick Wilson owns a home in Edmond,Oklahoma and pays $665 per year in insurance on the home.The $665 fee is an example of a:

A)peril.
B)hazard.
C)risk.
D)premium.
E)liability.

Question 63

Robert Plant pays a premium each month to State Farm Insurance for automobile insurance on his 2012 Dodge Ram pick-up truck.How is Robert managing his risk?

A)Avoidance
B)Reduction
C)Assumption
D)Shifting
E)Assessment

Question 64

Hermione Granger borrowed her best friend's car and was in an accident.She was at fault.The car was totaled.What part of Hermione's automobile insurance policy would cover the damage to her friend's car?

A)Bodily injury liability
B)Medical payments coverage
C)Property damage liability
D)Collision
E)Comprehensive physical damage

Question 65

Albert Finney owns a home in Pompano Beach,Florida.His house is broken into and the burglar steals his computer,his big screen TV,his stereo equipment,and his toaster.What part of his homeowner's insurance would cover this loss?

A)House and other structures
B)Additional living expenses
C)Personal property
D)Personal liability
E)Specialized coverage

Question 66

An assigned risk pool:

A)exists in every state.
B)reduces medical costs associated with auto accidents.
C)takes unsafe drivers off the road.
D)reduces auto insurance premiums with state regulation.
E)offers premium discounts to safe drivers.

Question 67

Tara Guest owns a home in Edmond,Oklahoma.She is worried about a tornado causing damage to her home.The tornado is an example of a:

A)peril.
B)hazard.
C)risk.
D)premium.
E)liability.

Question 68

Craig Brown owns a home in San Francisco,California.There is a major earthquake and his house is damaged by the earthquake.What type of insurance would he have to have to cover this loss?

A)House and other structures
B)Additional living expenses
C)Personal property
D)Personal liability
E)Specialized coverage

Question 69

Kevin Brown rides his bicycle to work so that he does not have to worry about getting in a car accident.How is Kevin managing his risk?

A)Avoidance
B)Reduction
C)Assumption
D)Shifting
E)Creation

Question 70

Ginger Simpson ran off the road and hit a bridge support.She was seriously injured and spent three days in the hospital.What part of Ginger's automobile insurance policy would cover Ginger's injuries?

A)Bodily injury liability
B)Medical payments coverage
C)Property damage liability
D)Collision
E)Comprehensive physical damage

Question 71

Susan Bize owns a home in Edmond,Oklahoma.She has a coffee maker in the home that has been recalled because it is likely to start fires.The coffee maker is an example of a:

A)peril.
B)hazard.
C)risk.
D)premium.
E)deductible.

Question 72

David Bowers must show a card from his automobile insurance company when he registers his car in the state of Oklahoma each year to show financial responsibility.Which of the following types of laws is the reason he must show this card each year?

A)Financial responsibility laws
B)Lemon laws
C)Truth in Lending Law
D)Equal Opportunity Law
E)Fiscal responsibility laws

Question 73

Brett Johnson owns a home in Yukon,Oklahoma.A babysitter he hires breaks her leg when she trips over the dog.What part of his homeowner's insurance would cover this loss?

A)House and other structures
B)Additional living expenses
C)Personal property
D)Personal liability
E)Specialized coverage

Question 74

Evan McWilliams accidentally collided with a car driven by Francis Sullivan.It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital.What part of Evan's automobile insurance policy would cover Francis's injuries?

A)Bodily injury liability
B)Medical payments coverage
C)Property damage liability
D)Collision
E)Comprehensive physical damage

Question 75

Larry Foster has bought a car with extra safety features,including front and side airbags and antilock brakes.How is Larry managing his risk?

A)Avoidance
B)Reduction
C)Assumption
D)Shifting
E)Development

Question 76

Georgia Owen was in an accident in which her car was totaled.What part of Georgia's automobile insurance would cover the damage to her car?

A)Bodily injury liability
B)Medical payments coverage
C)Property damage liability
D)Collision
E)Comprehensive physical damage

Question 77

William Bennett owns a home in Tampa,Florida.There was a fire in his home and he and his family had to move to a hotel until his home could be fixed.What part of his homeowner's insurance policy would cover the cost of the hotel?

A)House and other structures
B)Additional living expenses
C)Personal property
D)Personal liability
E)Specialized coverage

Question 78

Joan Stone owns a home in Edmond,Oklahoma.She is worried her property might be damaged due to some unforeseen event.This worry about the uncertainty as to a loss is an example of a:

A)peril.
B)hazard.
C)risk.
D)premium.
E)policy.

Question 79

Zachary Harris owns a home in Elk City.There was a bad thunderstorm and his gazebo was hit by lightening and burned to the ground.What part of his homeowner's insurance policy would cover this loss?

A)House and other structures
B)Additional living expenses
C)Personal property
D)Personal liability
E)Specialized coverage

Question 80

Peter Jacobs has set aside $5,000 in case he has an accident in his 1999 Honda Civic.He does not have collision insurance on this car.How is Peter managing his risk?

A)Avoidance
B)Reduction
C)Assumption
D)Shifting
E)Creation