Question 1

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 for a homeowner's policy.

Accepted Answer

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

Question 2

Your home insurance policy has a $1,000 deductible.If a windstorm causes $2,500 damage to your home,what amount of the claim would the insurance company pay?

Accepted Answer

A) $2,500 
B) $1,000 
C) $1,500 
D) $500 
E) $0

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

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

Question 5

Property owners face potential property losses due to two risks,physical damage and:

Accepted Answer

A) liability. 
B) negligence. 
C) strict liability. 
D) vicarious liability. 
E) loss of use.

Question 6

Risk management is an organized strategy for protecting assets and people and is considered a ________.

Accepted Answer

A) one month process 
B) short-range process 
C) medium-range process 
D) long-range process 
E) non-planning process

Question 7

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

Accepted Answer

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

Question 8

Which of the following is a list of personal belongings with purchase dates and cost information?

Accepted Answer

A) Personal property floater 
B) Household inventory 
C) Additional living expense 
D) Umbrella policy 
E) Personal liability policy

Question 9

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?

Accepted Answer

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

Question 10

George and Dr.Martha Cooper rent a condominium in an area known for litigious residents and high cost judgments.George has an extensive stamp collection and Martha has expensive photographic equipment.What kind of insurance would you recommend for a couple in their living situation?

Accepted Answer

The answer of George and Dr.Martha Cooper rent a condominium...

Question 11

A parent may be held responsible for the actions of their child if those actions cause financial or physical harm to others.This is known as:

Accepted Answer

A) negligence. 
B) strict liability. 
C) vicarious liability. 
D) umbrella coverage. 
E) self insurance.

Question 12

Peril is defined as:

Accepted Answer

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 13

Jane Smith accidentally hit a utility pole.The cost to repair her car was $2,950,and she has a $500 collision deductible.How much will the insurance company be required to pay for the car repair?

Accepted Answer

A) $250 
B) $500 
C) $1,000 
D) $2,450 
E) $2,950

Question 14

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

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

Negligence refers to:

Accepted Answer

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 17

Which of the following is not covered by personal property coverage?

Accepted Answer

A) Your camera taken on vacation 
B) Your computer tablet used while at school 
C) Your garage 
D) Power tool rental 
E) Rug shampoo machine rental

Question 18

Uninsurable risks are considered ________ risk.

Accepted Answer

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

Question 19

Robert Plant pays a premium each month to State Farm Insurance for automobile insurance on his 2014 Dodge Ram pick-up truck.How is Robert managing his risk?

Accepted Answer

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

Question 20

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

Accepted Answer

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

Exam 10: Property and Motor Vehicle Insurance