Question 1

Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?

Accepted Answer

A)  Medical payments coverage 
B)  Bodily injury liability coverage 
C)  Collision coverage 
D)  Comprehensive coverage 
A)  Medical payments coverage 
B)  Bodily injury liability coverage 
C)  Collision coverage 
D)  Comprehensive coverage A

Question 2

Younger drivers, especially males, between the ages of 16 and 25 are more likely to get in accidents and therefore pay higher insurance premiums.

Accepted Answer

A) True 
 B)False  True

Question 3

All of the following statements about uninsured motorist coverage are true, except

Accepted Answer

A)  this coverage is recommended since many drivers are uninsured. 
B)  it applies to accidents caused by a hit-and-run driver. 
C)  it replaces bodily injury liability when you are at fault. 
D)  it pays when a driver who is at fault has an insurance company that goes bankrupt. 
A)  this coverage is recommended since many drivers are uninsured. 
B)  it applies to accidents caused by a hit-and-run driver. 
C)  it replaces bodily injury liability when you are at fault. 
D)  it pays when a driver who is at fault has an insurance company that goes bankrupt. C

Question 4

Which of the following statements regarding auto insurance is not true?

Accepted Answer

A)  No-fault insurance programs do not hold a specific driver liable for causing an accident. 
B)  Exaggerated personal injury claims do not result in additional insurance expenses. 
C)  One reason for high auto insurance premiums is auto insurance fraud. 
D)  If you own a car, you need to have auto insurance. 
A)  No-fault insurance programs do not hold a specific driver liable for causing an accident. 
B)  Exaggerated personal injury claims do not result in additional insurance expenses. 
C)  One reason for high auto insurance premiums is auto insurance fraud. 
D)  If you own a car, you need to have auto insurance.

Question 5

Which of the following will not result in lower auto insurance premiums?

Accepted Answer

A)  Living in a rural area 
B)  Driving a more expensive car 
C)  Having a high FICO score 
D)  All of the above will reduce your premiums. 
A)  Living in a rural area 
B)  Driving a more expensive car 
C)  Having a high FICO score 
D)  All of the above will reduce your premiums.

Question 6

Since insurance is a regulated industry, the rates for automobile policies are relatively the same among different companies operating in a state.

Accepted Answer

A) True 
 B)False

Question 7

A personal umbrella policy provides liability coverage to replace coverage that would normally be provided by an automobile or homeowner's policy.

Accepted Answer

A) True 
 B)False

Question 8

During an unusually heavy rain, the basement of your house flooded and an antique dresser from the 1860s was destroyed. The dresser was originally purchased for $1,300 ten years ago and was recently appraised for $2,600; you recently received an offer from an antique collector for $3,100. Under a standard homeowner's policy, how much would you receive from your insurance company to cover this loss?

Accepted Answer

A)  zero 
B)  $1,300 
C)  $2,600 
D)  $3,100 
A)  zero 
B)  $1,300 
C)  $2,600 
D)  $3,100

Question 9

The best way to reduce your homeowner's insurance premiums is to

Accepted Answer

A)  insure your home for only 60% of its value, since it is unlikely to be completely destroyed. 
B)  drop coverage for medical payments. 
C)  increase deductibles. 
D)  eliminate liability coverage. 
A)  insure your home for only 60% of its value, since it is unlikely to be completely destroyed. 
B)  drop coverage for medical payments. 
C)  increase deductibles. 
D)  eliminate liability coverage.

Question 10

The most important reason to purchase an umbrella policy is

Accepted Answer

A)  supplement the liability coverage of your auto insurance policy. 
B)  supplement the liability coverage of your homeowner's insurance policy. 
C)  protect your net worth. 
D)  A, B and C are all very important reasons. 
A)  supplement the liability coverage of your auto insurance policy. 
B)  supplement the liability coverage of your homeowner's insurance policy. 
C)  protect your net worth. 
D)  A, B and C are all very important reasons.

Question 11

Lessening your exposure to an illness by getting periodic health checkups is an example of

Accepted Answer

A)  avoiding risks. 
B)  reducing risks. 
C)  accepting risks. 
D)  transferring risks. 
A)  avoiding risks. 
B)  reducing risks. 
C)  accepting risks. 
D)  transferring risks.

Question 12

The 100 in 100/300/50 refers to the

Accepted Answer

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

Question 13

Your car collides with a vehicle that has just run a red light, and your policy limits are 200/300/100. What is the maximum coverage under your policy for damages to the vehicle that you struck?

Accepted Answer

A)  $200,000 
B)  $300,000 
C)  $100,000 
D)  zero 
A)  $200,000 
B)  $300,000 
C)  $100,000 
D)  zero

Question 14

Before you increase your homeowner's insurance deductible you should evaluate

Accepted Answer

A)  if you are going to have a claim in the next year or two. 
B)  if you can afford to "self-insure" the deductible amount in the event of a loss claim. 
C)  your auto insurance liability levels and liability deductible. 
D)  Stop; it is never a good idea to increase your deductible. 
A)  if you are going to have a claim in the next year or two. 
B)  if you can afford to "self-insure" the deductible amount in the event of a loss claim. 
C)  your auto insurance liability levels and liability deductible. 
D)  Stop; it is never a good idea to increase your deductible.

Question 15

If you have a car accident in which a person in the other car is injured, the type of insurance that would protect you from financial loss is

Accepted Answer

A)  life insurance. 
B)  homeowner's insurance. 
C)  health insurance. 
D)  auto insurance. 
A)  life insurance. 
B)  homeowner's insurance. 
C)  health insurance. 
D)  auto insurance.

Question 16

Independent insurance agents

Accepted Answer

A)  work for just one insurance company. 
B)  represent many different insurance companies. 
C)  work for only two or three companies. 
D)  are self-employed and represent their own companies. 
A)  work for just one insurance company. 
B)  represent many different insurance companies. 
C)  work for only two or three companies. 
D)  are self-employed and represent their own companies.

Question 17

If your car is in an accident with another person who has no auto insurance, which of the following statements is not correct?

Accepted Answer

A)  Your uninsured motorist coverage will cover you and your car. 
B)  Many states in the U.S. will cover you and your car from their insurance fund. 
C)  You are not covered if the accident was your fault. 
D)  Both B and C are incorrect 
A)  Your uninsured motorist coverage will cover you and your car. 
B)  Many states in the U.S. will cover you and your car from their insurance fund. 
C)  You are not covered if the accident was your fault. 
D)  Both B and C are incorrect

Question 18

You have cash value coverage for your personal property on your homeowner's policy. A camera that cost you $300 eight years ago had a life expectancy of 10 years. The camera was stolen, and a new one will cost only $200. How much will the insurance company pay?

Accepted Answer

A)  $60 
B)  $100 
C)  $200 
D)  $300 
A)  $60 
B)  $100 
C)  $200 
D)  $300

Question 19

Property damage liability covers damages to your car from accidents that are your fault.

Accepted Answer

A) True 
 B)False

Question 20

Insurance protects you against potential financial losses or liability that result from unexpected events.

Accepted Answer

A) True 
 B)False

Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?

Younger drivers, especially males, between the ages of 16 and 25 are more likely to get in accidents and therefore pay higher insurance premiums.

All of the following statements about uninsured motorist coverage are true, except

Which of the following statements regarding auto insurance is not true?

Which of the following will not result in lower auto insurance premiums?

Since insurance is a regulated industry, the rates for automobile policies are relatively the same among different companies operating in a state.

A personal umbrella policy provides liability coverage to replace coverage that would normally be provided by an automobile or homeowner's policy.

The best way to reduce your homeowner's insurance premiums is to

The most important reason to purchase an umbrella policy is

Lessening your exposure to an illness by getting periodic health checkups is an example of

The 100 in 100/300/50 refers to the

Your car collides with a vehicle that has just run a red light, and your policy limits are 200/300/100. What is the maximum coverage under your policy for damages to the vehicle that you struck?

Before you increase your homeowner's insurance deductible you should evaluate

If you have a car accident in which a person in the other car is injured, the type of insurance that would protect you from financial loss is

Independent insurance agents

If your car is in an accident with another person who has no auto insurance, which of the following statements is not correct?

You have cash value coverage for your personal property on your homeowner's policy. A camera that cost you $300 eight years ago had a life expectancy of 10 years. The camera was stolen, and a new one will cost only $200. How much will the insurance company pay?

Property damage liability covers damages to your car from accidents that are your fault.

Insurance protects you against potential financial losses or liability that result from unexpected events.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 11: Auto and Homeowners Insurance

Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?

Younger drivers, especially males, between the ages of 16 and 25 are more likely to get in accidents and therefore pay higher insurance premiums.

All of the following statements about uninsured motorist coverage are true, except

Which of the following statements regarding auto insurance is not true?

Which of the following will not result in lower auto insurance premiums?

Since insurance is a regulated industry, the rates for automobile policies are relatively the same among different companies operating in a state.

A personal umbrella policy provides liability coverage to replace coverage that would normally be provided by an automobile or homeowner's policy.

The best way to reduce your homeowner's insurance premiums is to

The most important reason to purchase an umbrella policy is

Lessening your exposure to an illness by getting periodic health checkups is an example of

The 100 in 100/300/50 refers to the

Your car collides with a vehicle that has just run a red light, and your policy limits are 200/300/100. What is the maximum coverage under your policy for damages to the vehicle that you struck?

Before you increase your homeowner's insurance deductible you should evaluate

If you have a car accident in which a person in the other car is injured, the type of insurance that would protect you from financial loss is

Independent insurance agents

If your car is in an accident with another person who has no auto insurance, which of the following statements is not correct?

You have cash value coverage for your personal property on your homeowner's policy. A camera that cost you $300 eight years ago had a life expectancy of 10 years. The camera was stolen, and a new one will cost only $200. How much will the insurance company pay?

Property damage liability covers damages to your car from accidents that are your fault.

Insurance protects you against potential financial losses or liability that result from unexpected events.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters