Question 1

It pays to comparison shop for insurance policies because of the:

Accepted Answer

A)  subsidized deductible options. 
B)  different educational qualifications of captive agents. 
C)  large variations in premiums and services. 
D)  different legal liabilities of insurance agents. 
E)  high cost of insurance.

Question 2

Increasing the amount of the deductible is the only way to reduce the cost of homeowner's insurance.

Accepted Answer

A) True 
 B)False

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Drivers aged 25 and under are involved in nearly [ 30% | 50% ] of auto accidents.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 4

If you have two insurance policies on the same property, the _____ explains how the two insurance companies will share the loss.

Accepted Answer

A)  co-insurance clause 
B)  personal property floater (PPF) 
C)  right of subrogation 
D)  other-insurance clause 
E)  principle of indemnity

Question 5

A personal liability umbrella policy:

Accepted Answer

A)  may include subsidies for flood insurance established in cooperation with a private insurance agent. 
B)  provides added liability coverage for homeowner's and automobile insurance. 
C)  provides the maximum protection available for virtually all the insured's personal property. 
D)  typically includes the basic health and homeowner's protection needed by most families. 
E)  is recommended for persons with low to moderate levels of income and net worth.

Question 6

If you lease a car, you'll most likely be required to have physical damage coverage.

Accepted Answer

A) True 
 B)False

Question 7

An increase in the amount of the deductible will:

Accepted Answer

A)  increase the insurance coverage. 
B)  decrease the replacement cost of the insured property. 
C)  decrease the amount of insurance premiums. 
D)  increase the personal property floater (PPF) coverage for the insured property. 
E)  decrease the value of the property.

Question 8

Each type of property damage coverage is subject to a deductible of $100 or more.

Accepted Answer

A) True 
 B)False

Question 9

A higher home insurance cost may result from:

Accepted Answer

A)  a low crime rate in the area of the insured's residence. 
B)  a low credit score of the insured. 
C)  fewer insurance claims from the area of the insured's residence. 
D)  the lack of a swimming pool at the insured's residence. 
E)  fewer captive agents hired by the insurance company.

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Section I of a homeowner's insurance policy covers [ medical payments to others | the dwelling of the insured ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Liability insurance [ provides | does not provide ] coverage for legal fees if you are required to defend yourself in a lawsuit.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 12

Even though homeowners are eligible for reimbursement on a full replacement-cost basis if they keep their homes insured for at least 80% of the amount that it would cost to build them today, _____ can cause the actual amount of coverage to fall below 80%.

Accepted Answer

A)  the replacement cost 
B)  inflation 
C)  the insurance premium 
D)  deductibles 
E)  the land value

Question 13

Property inventories are important to identify insurance needs and to substantiate claims.

Accepted Answer

A) True 
 B)False

Question 14

Uninsured motorists protection usually provides protection to the insured's car if a hit-and-run incident occurs.

Accepted Answer

A) True 
 B)False

Question 15

A captive agent is a(n):

Accepted Answer

A)  insurance agent who represents only one insurance company. 
B)  federal insurance agent who can sell low-cost flood insurance coverage. 
C)  independent agent who can insure homeowners and tenants together for flood insurance. 
D)  insurance agent who insures only homes and vehicles. 
E)  claims adjustor who assesses the probability of law violations during an investigation.

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
The personal property of your [ boarder | visiting mother-in-law ] would be covered by your homeowner's policy.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 17

A personal property floater (PPF) and a personal liability umbrella policy offer similar coverage.

Accepted Answer

A) True 
 B)False

Question 18

A(n) _____  agent represents multiple insurance companies.

Accepted Answer

A)  captive 
B)  business 
C)  casualty 
D)  independent 
E)  dealer's

Question 19

Collision insurance covers the damage caused to your automobile when you are at fault in an accident.

Accepted Answer

A) True 
 B)False

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
[ HO-2 | HO-3 ] is an example of a named peril policy.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Exam 10: Protecting Your Property

It pays to comparison shop for insurance policies because of the:

Increasing the amount of the deductible is the only way to reduce the cost of homeowner's insurance.

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Drivers aged 25 and under are involved in nearly [ 30% | 50% ] of auto accidents.

If you have two insurance policies on the same property, the _____ explains how the two insurance companies will share the loss.

A personal liability umbrella policy:

If you lease a car, you'll most likely be required to have physical damage coverage.

An increase in the amount of the deductible will:

Each type of property damage coverage is subject to a deductible of $100 or more.

A higher home insurance cost may result from:

Even though homeowners are eligible for reimbursement on a full replacement-cost basis if they keep their homes insured for at least 80% of the amount that it would cost to build them today, _____ can cause the actual amount of coverage to fall below 80%.

Property inventories are important to identify insurance needs and to substantiate claims.

Uninsured motorists protection usually provides protection to the insured's car if a hit-and-run incident occurs.

A captive agent is a(n) :

A personal property floater (PPF) and a personal liability umbrella policy offer similar coverage.

A(n) _____ agent represents multiple insurance companies.

Collision insurance covers the damage caused to your automobile when you are at fault in an accident.

INSTRUCTIONS: Choose the word or phrase in [ ] that will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ HO-2 | HO-3 ] is an example of a named peril policy.