Question 1

A personal scheduled property floater should be added to your homeowner's insurance policy if

Accepted Answer

A)  you or your spouse has expensive jewelry or watches. 
B)  you have valuable original art in your home. 
C)  you own an antique car and keep it in your garage. 
D)  Both A and B are correct. 
A)  you or your spouse has expensive jewelry or watches. 
B)  you have valuable original art in your home. 
C)  you own an antique car and keep it in your garage. 
D)  Both A and B are correct.

Question 2

Which of the following is not correct?

Accepted Answer

A)  Renter's insurance is important if you own an expensive TV and game center. 
B)  Renter's insurance covers your possessions and provides liability coverage for you. 
C)  Your auto insurance policy will cover valuable possessions if you keep them in your garage with your car. 
D)  Renter's insurance does not cover the structure of your apartment or rental home. 
A)  Renter's insurance is important if you own an expensive TV and game center. 
B)  Renter's insurance covers your possessions and provides liability coverage for you. 
C)  Your auto insurance policy will cover valuable possessions if you keep them in your garage with your car. 
D)  Renter's insurance does not cover the structure of your apartment or rental home.

Question 3

If an insurance policy carries a $250 deductible for collision and no deductible for comprehensive, and an accident results in the following losses, what will be the reimbursement from the insurance company under your collision and comprehensive coverage? • Replacement of trailer hitch $200
• Replacement of rear bumper $150
• Replacement of computer being carried on the back seat $300
• Replacement of rear windshield $100

Accepted Answer

A)  $200 
B)  $250 
C)  $500 
D)  $750 
A)  $200 
B)  $250 
C)  $500 
D)  $750

Question 4

Use the following two columns of items to answer the matching questions below:
-auto insurance
A)pays for injuries to you or people in your car in an accident where you (the driver) are at fault
B)requires individuals who drive cars to purchase a minimum amount of liability insurance
C)a set dollar amount that you are responsible for paying before any coverage is provided by your insurer
D)covers damage to your car when you are at fault in an accident
E)vehicle insurance to cover various injuries, your property, and the property of others
F)covers damage to your car as a result of theft, fire, vandalism, or various other events

Accepted Answer

The answer of Use the following two columns of items...

Question 5

In general, insurance companies generate their revenue from the payments received for policies and from the return earned from investing the payments until the funds are needed to cover claims.

Accepted Answer

A) True 
 B)False

Question 6

Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.

Accepted Answer

A) True 
 B)False

Question 7

Legal expenses incurred by an insurance company when defending you against a lawsuit are deducted from the limits of your liability coverage.

Accepted Answer

A) True 
 B)False

Question 8

Medical payments coverage insures against costs of medical care for you and other passengers in your car when you are at fault in an accident.

Accepted Answer

A) True 
 B)False

Question 9

Auto insurance discounts might be given for all of the following, except

Accepted Answer

A)  antilock brakes. 
B)  alarms. 
C)  leather seats. 
D)  airbags. 
A)  antilock brakes. 
B)  alarms. 
C)  leather seats. 
D)  airbags.

Question 10

Homeowner's insurance premiums are heavily influenced by all of the following, except

Accepted Answer

A)  number of children who live in the home. 
B)  amount of the deductible. 
C)  location of the residence. 
D)  degree of protection desired. 
A)  number of children who live in the home. 
B)  amount of the deductible. 
C)  location of the residence. 
D)  degree of protection desired.

Question 11

Auto insurance fraud is not a problem in states that have implemented no-fault insurance programs.

Accepted Answer

A) True 
 B)False

Question 12

Additional coverage on your automobile insurance policy can be purchased for

Accepted Answer

A)  the cost of a rental car while your car is being repaired. 
B)  the protection of valuables you are carrying in your car. 
C)  the cost of towing, even if the problems are not the result of an accident. 
D)  Both A and C are correct. 
A)  the cost of a rental car while your car is being repaired. 
B)  the protection of valuables you are carrying in your car. 
C)  the cost of towing, even if the problems are not the result of an accident. 
D)  Both A and C are correct.

Question 13

Since insurance companies rely mostly on their premiums to cover claims, they price their insurance policies to reflect the probability of a claim and the size of the claim.

Accepted Answer

A) True 
 B)False

Question 14

Under a cash value policy, the loss of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

Accepted Answer

A)  $600. 
B)  $900. 
C)  $240. 
D)  $360. 
A)  $600. 
B)  $900. 
C)  $240. 
D)  $360.

Question 15

Which of the following would be considered the most high-risk driver?

Accepted Answer

A)  Nineteen-year-old female 
B)  Nineteen-year-old male 
C)  Twenty-eight-year-old female 
D)  Twenty-eight-year-old male 
A)  Nineteen-year-old female 
B)  Nineteen-year-old male 
C)  Twenty-eight-year-old female 
D)  Twenty-eight-year-old male

Question 16

In general, the cost of comprehensive and collision insurance is the most expensive part of your automobile policy and represents about 60% of the cost.

Accepted Answer

A) True 
 B)False

Question 17

Insurance is not a good option for managing risk when

Accepted Answer

A)  the probability of loss is very small and the expected loss is small. 
B)  the benefits outweigh the costs. 
C)  you want to protect your existing and future net worth. 
D)  there is a likelihood that an event will cause a large financial loss. 
A)  the probability of loss is very small and the expected loss is small. 
B)  the benefits outweigh the costs. 
C)  you want to protect your existing and future net worth. 
D)  there is a likelihood that an event will cause a large financial loss.

Question 18

Insurance should be considered even when there is a high likelihood than an event will cause a small financial loss.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a popular form of insurance for individuals?

Accepted Answer

A)  Life insurance 
B)  Health insurance 
C)  Homeowners insurance 
D)  General liability insurance 
A)  Life insurance 
B)  Health insurance 
C)  Homeowners insurance 
D)  General liability insurance

Question 20

Collision and comprehensive coverage is optional in most states unless you are financing your car in which case you must have this coverage to protect the lender.

Accepted Answer

A) True 
 B)False

A personal scheduled property floater should be added to your homeowner's insurance policy if

Which of the following is not correct?

In general, insurance companies generate their revenue from the payments received for policies and from the return earned from investing the payments until the funds are needed to cover claims.

Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.

Legal expenses incurred by an insurance company when defending you against a lawsuit are deducted from the limits of your liability coverage.

Medical payments coverage insures against costs of medical care for you and other passengers in your car when you are at fault in an accident.

Auto insurance discounts might be given for all of the following, except

Homeowner's insurance premiums are heavily influenced by all of the following, except

Auto insurance fraud is not a problem in states that have implemented no-fault insurance programs.

Additional coverage on your automobile insurance policy can be purchased for

Since insurance companies rely mostly on their premiums to cover claims, they price their insurance policies to reflect the probability of a claim and the size of the claim.

Under a cash value policy, the loss of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

Which of the following would be considered the most high-risk driver?

In general, the cost of comprehensive and collision insurance is the most expensive part of your automobile policy and represents about 60% of the cost.

Insurance is not a good option for managing risk when

Insurance should be considered even when there is a high likelihood than an event will cause a small financial loss.

Which of the following is not a popular form of insurance for individuals?

Collision and comprehensive coverage is optional in most states unless you are financing your car in which case you must have this coverage to protect the lender.

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

A personal scheduled property floater should be added to your homeowner's insurance policy if

Which of the following is not correct?

In general, insurance companies generate their revenue from the payments received for policies and from the return earned from investing the payments until the funds are needed to cover claims.

Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.

Legal expenses incurred by an insurance company when defending you against a lawsuit are deducted from the limits of your liability coverage.

Medical payments coverage insures against costs of medical care for you and other passengers in your car when you are at fault in an accident.

Auto insurance discounts might be given for all of the following, except

Homeowner's insurance premiums are heavily influenced by all of the following, except

Auto insurance fraud is not a problem in states that have implemented no-fault insurance programs.

Additional coverage on your automobile insurance policy can be purchased for

Since insurance companies rely mostly on their premiums to cover claims, they price their insurance policies to reflect the probability of a claim and the size of the claim.

Under a cash value policy, the loss of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

Which of the following would be considered the most high-risk driver?

In general, the cost of comprehensive and collision insurance is the most expensive part of your automobile policy and represents about 60% of the cost.

Insurance is not a good option for managing risk when

Insurance should be considered even when there is a high likelihood than an event will cause a small financial loss.

Which of the following is not a popular form of insurance for individuals?

Collision and comprehensive coverage is optional in most states unless you are financing your car in which case you must have this coverage to protect the lender.

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