Question 1

Explain two ways that someone may choose to manage risk.Include an example of each method.

Accepted Answer

The following are acceptable answers:
Risk avoidance-not taking an action that could be risky.Example: not driving a car to avoid a traffic accident.
Risk reduction-take action to decrease the likelihood that risks will cause you harm.Examples: wear a seatbelt and install fire extinguishers.
Risk assumption-take responsibility for the negative results of a risk.Examples: self-insurance to cover a loss or deciding to NOT purchase collision insurance for an old car.
Risk shifting-transfer the risk to an insurance company.Example: purchasing insurance for an auto or a home.

Question 2

What should an insurance program's main goal be?

Accepted Answer

The main goal should be to minimize personal,property,and liability risks.

Question 3

An insurance claim is a request for payment to cover financial losses.

Accepted Answer

A) True 
 B)False  True

Question 4

Jim and Sandy are setting up their insurance program.One of their goals should be to reduce the possible loss of income due to fire or theft.

Accepted Answer

A) True 
 B)False

Question 5

Timothy was driving his friend Nick to football practice.While driving,he was hit by a driver who had coverage of 100/300/50.Tim and Nick each suffered some physical injuries.Based on this information,which of the following is correct?

Accepted Answer

A)  Timothy's injuries would be covered to $100 and property damage would be limited to $300. 
B)  Nick's injuries would be covered to $50,000. 
C)  Individually, Timothy and Nick's injuries would be covered to $300,000 each. 
D)  The total coverage for Timothy and Nick would be $100,000, and the driver who caused the accident would be covered to $50,000. 
E)  The policy would provide a maximum of $100,000 for each of the injured, and no more than $300,000 for total injuries sustained in the accident. 
A)  Timothy's injuries would be covered to $100 and property damage would be limited to $300. 
B)  Nick's injuries would be covered to $50,000. 
C)  Individually, Timothy and Nick's injuries would be covered to $300,000 each. 
D)  The total coverage for Timothy and Nick would be $100,000, and the driver who caused the accident would be covered to $50,000. 
E)  The policy would provide a maximum of $100,000 for each of the injured, and no more than $300,000 for total injuries sustained in the accident.

Question 6

An example of a peril is a robbery.

Accepted Answer

A) True 
 B)False

Question 7

The most common risks are

Accepted Answer

A)  Personal risks. 
B)  Property risks. 
C)  Liability risks. 
D)  All of these are common risks. 
E)  None of these are common risks. 
A)  Personal risks. 
B)  Property risks. 
C)  Liability risks. 
D)  All of these are common risks. 
E)  None of these are common risks.

Question 8

What are some questions that someone should ask when developing a risk management plan?

Accepted Answer

Questions include these:
• Wha

Question 9

What is the difference between a pure risk and a speculative risk?

Accepted Answer

A pure risk is insurable risk as well as

Question 10

Anything that may possibly cause a loss is called a

Accepted Answer

A)  Hazard. 
B)  Negligence. 
C)  Peril. 
D)  Premium. 
E)  Speculation. 
A)  Hazard. 
B)  Negligence. 
C)  Peril. 
D)  Premium. 
E)  Speculation.

Question 11

Daniel's house was severely damaged in a fire,and he needed to file a claim for his personal property losses.What would facilitate the processing of his insurance claim?

Accepted Answer

A household inventory would provide docu

Question 12

Another name for a homeowner's insurance policy is an umbrella policy.

Accepted Answer

A) True 
 B)False

Question 13

The National Flood Insurance Program makes flood and earthquake insurance available for all homeowners.

Accepted Answer

A) True 
 B)False

Question 14

Uninsured motorist's protection automatically covers you and your family members as well as damage to the vehicle itself.

Accepted Answer

A) True 
 B)False

Question 15

Sally was driving her own car and collided with a pickup truck.Sally sustained $125,000 in injuries,and her passenger sustained $10,000 in injuries.If her coverage was 100/300/50,what are the total medical expenses the insurance company would pay for this accident?

Accepted Answer

A)  $1,000 
B)  $100,000 
C)  $110,000 
D)  $125,000 
E)  $135,000 
A)  $1,000 
B)  $100,000 
C)  $110,000 
D)  $125,000 
E)  $135,000

Question 16

What is the purpose of an umbrella policy?

Accepted Answer

An umbrella policy,also called a persona

Question 17

Paul was driving his kids to a piano lesson in a 2005 minivan.While driving,he was hit by an uninsured motorist.Although Paul and his kids had only minor injuries,their vehicle was totaled.Based on this information,which of the following is correct?

Accepted Answer

A)  The uninsured motorist needs to purchase insurance after the fact. 
B)  Paul's uninsured motorist's protection should cover medical expenses for Paul and his kids. 
C)  The uninsured motorist will be required to purchase a new minivan for Paul's family. 
D)  It is likely that the uninsured motorist will not receive any citations or fines because she did not have insurance. 
E)  In all states, Paul's uninsured motorist's coverage must cover damage to all vehicles involved in the accident. 
A)  The uninsured motorist needs to purchase insurance after the fact. 
B)  Paul's uninsured motorist's protection should cover medical expenses for Paul and his kids. 
C)  The uninsured motorist will be required to purchase a new minivan for Paul's family. 
D)  It is likely that the uninsured motorist will not receive any citations or fines because she did not have insurance. 
E)  In all states, Paul's uninsured motorist's coverage must cover damage to all vehicles involved in the accident.

Question 18

An important question that should be asked when setting up an insurance program is "What do I need to insure?
"

Accepted Answer

A) True 
 B)False

Question 19

A landlord is responsible for paying renter's insurance.

Accepted Answer

A) True 
 B)False

Question 20

What is the purpose of a personal property floater?

Accepted Answer

A personal property floater is additiona

Explain two ways that someone may choose to manage risk.Include an example of each method.

What should an insurance program's main goal be?

An insurance claim is a request for payment to cover financial losses.

Jim and Sandy are setting up their insurance program.One of their goals should be to reduce the possible loss of income due to fire or theft.

Timothy was driving his friend Nick to football practice.While driving,he was hit by a driver who had coverage of 100/300/50.Tim and Nick each suffered some physical injuries.Based on this information,which of the following is correct?

An example of a peril is a robbery.

The most common risks are

What are some questions that someone should ask when developing a risk management plan?

What is the difference between a pure risk and a speculative risk?

Anything that may possibly cause a loss is called a

Daniel's house was severely damaged in a fire,and he needed to file a claim for his personal property losses.What would facilitate the processing of his insurance claim?

Another name for a homeowner's insurance policy is an umbrella policy.

The National Flood Insurance Program makes flood and earthquake insurance available for all homeowners.

Uninsured motorist's protection automatically covers you and your family members as well as damage to the vehicle itself.

Sally was driving her own car and collided with a pickup truck.Sally sustained $125,000 in injuries,and her passenger sustained $10,000 in injuries.If her coverage was 100/300/50,what are the total medical expenses the insurance company would pay for this accident?

What is the purpose of an umbrella policy?

Paul was driving his kids to a piano lesson in a 2005 minivan.While driving,he was hit by an uninsured motorist.Although Paul and his kids had only minor injuries,their vehicle was totaled.Based on this information,which of the following is correct?

An important question that should be asked when setting up an insurance program is "What do I need to insure? "

A landlord is responsible for paying renter's insurance.

What is the purpose of a personal property floater?

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 8: Home and Automobile Insurance

Explain two ways that someone may choose to manage risk.Include an example of each method.

What should an insurance program's main goal be?

An insurance claim is a request for payment to cover financial losses.

Jim and Sandy are setting up their insurance program.One of their goals should be to reduce the possible loss of income due to fire or theft.

Timothy was driving his friend Nick to football practice.While driving,he was hit by a driver who had coverage of 100/300/50.Tim and Nick each suffered some physical injuries.Based on this information,which of the following is correct?

An example of a peril is a robbery.

The most common risks are

What are some questions that someone should ask when developing a risk management plan?

What is the difference between a pure risk and a speculative risk?

Anything that may possibly cause a loss is called a

Daniel's house was severely damaged in a fire,and he needed to file a claim for his personal property losses.What would facilitate the processing of his insurance claim?

Another name for a homeowner's insurance policy is an umbrella policy.

The National Flood Insurance Program makes flood and earthquake insurance available for all homeowners.

Uninsured motorist's protection automatically covers you and your family members as well as damage to the vehicle itself.

Sally was driving her own car and collided with a pickup truck.Sally sustained $125,000 in injuries,and her passenger sustained $10,000 in injuries.If her coverage was 100/300/50,what are the total medical expenses the insurance company would pay for this accident?

What is the purpose of an umbrella policy?

Paul was driving his kids to a piano lesson in a 2005 minivan.While driving,he was hit by an uninsured motorist.Although Paul and his kids had only minor injuries,their vehicle was totaled.Based on this information,which of the following is correct?

An important question that should be asked when setting up an insurance program is "What do I need to insure? "

A landlord is responsible for paying renter's insurance.

What is the purpose of a personal property floater?

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters