Deck 8: Home and Automobile Insurance

Question 1

Collision coverage pays for damage to your vehicle for such hazards as fire,theft,or wind damage.

Answer 1

False

Question 2

Risk management is not an organized strategy for protecting and conserving assets and people.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

Increased liability insurance is available with an umbrella policy.

Question 5

The homeowners' pets are included in the coverage provided by the homeowners insurance.

Question 6

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

Question 7

The higher the deductible you choose for your car insurance,the higher the premium.

Question 8

Voluntary 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 9

Property losses can be categorized into destruction of property,and losses due to robbery,burglary,vandalism,or arson.

Question 10

The most common method of dealing with risk is to shift,or transfer it to an insurance company or some other organization.

Question 11

A rider is an addition of coverage to a standard insurance policy.

Question 12

The purpose of insurance is to help protect you and your family against financial hardship due to hazard,accident,death,and the like.

Question 13

Accident benefits automobile insurance coverage pays for the costs of injuries to persons in the driver's vehicle.

Question 14

There are no significant differences in home owner rates when comparing different insurance companies

Question 15

Personal property refers to building and other structures covered by homeowner's insurance.

Question 16

Personal belongings of a high value can be protected with a personal articles endorsement.

Question 17

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

Question 18

Vicarious liability refers to the failure to take ordinary or reasonable care in a situation.

Question 19

Personal risks,property risks,and liability risks are types of speculative risks.

Question 20

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

Question 21

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(n)____________ liability.

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

Question 22

Peril is defined as

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

Question 23

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

A) additional living expenses
B) personal property
C) building and other structures
D) personal liability
E) property damage

Question 24

Which of the following are not covered by tenant's insurance?

A) medical expenses for injuries to visitors
B) fire damage of the building's roof
C) additional living expenses
D) accidental damage to the property of others
E) cost of legal action due to personal liability

Question 25

If a homeowner leaves toys on stairs that result 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 26

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

A) an automobile
B) a garage
C) a house
D) appliances
E) trees and shrubs

Question 27

The uncertainties of direct and indirect losses due to fire,wind,accident,theft,etc.,are called ____________ risks.

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

Question 28

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

A) an umbrella policy
B) a household inventory
C) additional living expense coverage
D) a personal articles endorsement
E) a coinsurance floater

Question 29

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

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

Question 30

The purpose of a household inventory is to

A) reduce insurance costs.
B) lower the chance of negligence
C) obtain personal property floater coverage.
D) increase liability coverage.
E) verify owned property.

Question 31

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) flood damage
E) major personal liability suits.

Question 32

Most home insurance policies provide coverage for

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

Question 33

Tenant's insurance would include coverage for all of the following except

A) additional living expense coverage.
B) personal liability.
C) building and other structures.
D) personal property.
E) protection against financial loss due to damage.

Question 34

Purchasing a technology stock that may or may not increase in price is an example of ___________ risk.

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

Question 35

The purpose of a high-risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.

Question 36

Vicarious liability refers to

A) failure to take ordinary and reasonable care.
B) when a person is held responsible for actions of another person.
C) property damage.
D) high risk insurance coverage.
E) common hazards in our society.

Question 37

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 38

Defective house wiring is an example of a

A) hazard.
B) peril.
C) risk.
D) speculation.
E) negligence.

Question 39

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

A) earthquake damage
B) flooding
C) brush fires
D) wind damage to your roof
E) theft of business supplies from your office

Question 40

The additional living expenses component of a home 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 41

Which of the following refers to a category based on 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) use of the vehicle

Question 42

____________ 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 payments
B) No-fault insurance
C) Uninsured motorist's protection
D) Bodily injury liability
E) Comprehensive insurance

Question 43

Which of the following home insurance policies will have the highest premium?

A) Standard
B) Broad
C) Comprehensive
D) All forms will have the same cost.
E) Broad and Comprehensive are equally expensive

Question 44

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) no-fault insurance
C) comprehensive system
D) financial responsibility coverage
E) uninsured motorist's protection

Question 45

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 $200 today.What amount will the insurance company pay?

A) $100
B) $150
C) $200
D) $350
E) $300

Question 46

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

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

Question 47

A system that allows insurance companies to provide coverage to several individuals with poor driving records is referred to as

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

Question 48

Identify the areas covered by tenants' insurance. I Personal property protection.
II Additional living expenses.
III Personal liability.
IV Replacement value of premises.

A) I,II and III only
B) I and III only
C) II,III and IV only
D) I,II,III and IV
E) I,II,and IV

Question 49

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 with your car.

Question 50

Home insurance costs are affected most directly by

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

Question 51

The requirement for a minimum level of home insurance coverage refers to which of the following?

A) Deductible
B) Specified perils
C) Endorsement
D) Co-insurance
E) Basic

Question 52

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 articles endorsement

Question 53

In the insurance industry,the term "peril" represents _______________.

A) the chance that something may be lost
B) the cause of the possible loss
C) a habit that increases the likelihood of loss
D) the actual loss experienced
E) your record of past losses

Question 54

Which of the following insurance policy provisions requires that the insured must pay for part of the loss of a claim if the property is not insured for the specified percentage of replacement value?

A) personal property floater
B) an endorsement
C) assigned risk clause
D) umbrella coverage
E) coinsurance clause

Question 55

The purpose of a high-risk pool is to

A) provide insurance for poor drivers.
B) reduce medical costs associated with auto accidents.
C) take unsafe drivers off the road.
D) reduce auto insurance premiums with state regulation.
E) offer premium discounts to safe drivers.

Question 56

Which of the following coverage's would pay for medical care for people who were injured in your automobile?

A) comprehensive
B) bodily injury liability
C) collision
D) accident benefits
E) no-fault insurance

Question 57

Which 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 58

Wind damage occurs to your car costing $1000 to repair.If you have a $300 deductible for collision and full coverage for comprehensive,what portion of the claim will the insurance company pay?

A) $300
B) $1300
C) $500
D) $700
E) $800

Question 59

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 60

The purpose of minimum insurance legislation is to

A) risk of injury or death.
B) possibility of damage,destruction or theft.
C) third party liability.
D) A and B are correct.
E) A,B and C are correct.

Question 61

Which type of automobile insurance is usually considered to be most important?

Question 62

Which of the following is likely to increase your car insurance premium? I.You live in a rural area.
II)You are over 70.
III)You usually carry several passengers.

A) I and II,only
B) II and III,only
C) I and III,only
D) I,II and III
E) I only

Question 63

What factors affect the cost of home insurance?

Question 64

A friend wants to understand what affects the cost of auto insurance.Explain the factors used to determine the automobile insurance premiums a person pays.

Question 65

What events are commonly covered in a homeowner's insurance policy?