Exam 9: Risk Management

Jim Rivera bought a new car and carried only compulsory insurance. On a trip to Washington, he hit a car, injuring the couple inside. Jim's car had damage of $1,800, and the car struck had damage of $1,700. After a lengthy court battle, the couple struck by Jim were awarded personal injury judgments of $16,000 and $8,800, respectively. What did the insurance company pay, and what was Jim's responsibility?

Term insurance would pay the face amount of the policy in case of the death of the insured.

Term insurance:

Calculate Joe Wheel's auto premium:

As a result of few suits as well as high operating costs, no-fault has reduced some premium costs.

Which one of the following builds up no cash value?

Buying flight insurance at an airport is an example of straight-life insurance.

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

A falling object that dents a car would be covered under comprehensive insurance.

Calculate Joe Wheel's Auto premium:

If Joe Wheel decides to decrease his deductible to $100 for collision, what is the additional cost?

Ann Rill insured her dress shop for $75,000 of fire insurance at an annual rate per $100 of $.63. At the end of nine months, Ann canceled the policy since her dress shop went out of business. What was the cost of Ann's premium as well as her refund?

Calculate cost and refund (use table in text if needed):

Abby Kaminsky, age 32, has decided to take out a limited payment life policy. She chose this since she expects her income to decline in future years. Abby has decided to take out a 20-year payment life policy with a coverage amount of $200,000. Her annual premium will be:

10/20 of bodily injury means that an insurance company will pay up to $20,000 per person up to a total of 10 people for bodily injury.

Twenty-payment life requires premiums for 20 years although the insured is protected till death.

No-fault insurance does not reduce premiums for collision, property damage, or comprehensive.

A premium for fire insurance could be lower than someone else's if: