Question 1

Which of the following is NOT one of the commonly used general risk management techniques?

Accepted Answer

A)  Reduce risk 
B)  Assume risk 
C)  Shift risk 
D)  Avoid risk 
E)  Increase risk 
A)  Reduce risk 
B)  Assume risk 
C)  Shift risk 
D)  Avoid risk 
E)  Increase risk

Question 2

The failure to take ordinary or reasonable care to prevent accidents from happening is called

Accepted Answer

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

Question 3

A policy that supplements your basic personal liability coverage is called a(n)

Accepted Answer

A)  Endorsement. 
B)  Homeowner's insurance. 
C)  Medical payments coverage. 
D)  Supplementary policy. 
E)  Umbrella policy. 
A)  Endorsement. 
B)  Homeowner's insurance. 
C)  Medical payments coverage. 
D)  Supplementary policy. 
E)  Umbrella policy.

Question 4

Amber had permission from Bradley to borrow his car to run some errands.Unfortunately,while Amber was driving,she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist.Based on her experience,which of the following would be true?

Accepted Answer

A)  Amber's insurance company should refuse coverage of her medical payments because she was not driving in her own vehicle. 
B)  The insurance company of the owner of the sideswiped car should pay for all damages since the car was illegally parked. 
C)  Amber's insurance should not cover any damage since she carried liability, collision, and comprehensive coverage. 
D)  The bicyclist should cover his own medical expenses because he was at fault for riding on the road. 
E)  Amber's insurance policy should cover any property damage claims since she was driving Bradley's car with his permission. 
A)  Amber's insurance company should refuse coverage of her medical payments because she was not driving in her own vehicle. 
B)  The insurance company of the owner of the sideswiped car should pay for all damages since the car was illegally parked. 
C)  Amber's insurance should not cover any damage since she carried liability, collision, and comprehensive coverage. 
D)  The bicyclist should cover his own medical expenses because he was at fault for riding on the road. 
E)  Amber's insurance policy should cover any property damage claims since she was driving Bradley's car with his permission.

Question 5

Mortgage lenders require that homeowners purchase home insurance.

Accepted Answer

A) True 
 B)False

Question 6

Robby fell on some ice on Peter's front steps and broke his arm.This is an example of a risk covered by the personal liability portion of Peter's homeowner's policy.

Accepted Answer

A) True 
 B)False

Question 7

Caroline was found liable in an accident.This was probably not due to negligence on her part.

Accepted Answer

A) True 
 B)False

Question 8

Emergency road service coverage includes coverage for a tow to a service station as well as repairs to make the vehicle drivable.

Accepted Answer

A) True 
 B)False

Question 9

Barbara left a skateboard on her front steps.A windstorm swept the skateboard up and through her window.The windstorm was a

Accepted Answer

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

Question 10

One way to keep auto insurance rates down is to insure each vehicle you own with a different insurer.

Accepted Answer

A) True 
 B)False

Question 11

Identify at least three home insurance policy forms,and list the coverages of each.

Accepted Answer

The forms are listed here:
• HO-1: basic

Question 12

Every state in the United States has a law requiring people to carry motor vehicle insurance.

Accepted Answer

A) True 
 B)False

Question 13

An insurance company will

Accepted Answer

A)  Insure speculative and pure risks. 
B)  Insure pure risk, but not speculative risk. 
C)  Insure neither pure risk nor speculative risk. 
D)  Insure speculative risk, but not pure risk. 
E)  Insure all types of risks. 
A)  Insure speculative and pure risks. 
B)  Insure pure risk, but not speculative risk. 
C)  Insure neither pure risk nor speculative risk. 
D)  Insure speculative risk, but not pure risk. 
E)  Insure all types of risks.

Question 14

Homeowner's insurance excludes detached structures.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following should reduce your auto insurance premium?

Accepted Answer

A)  Celebrate your 70th birthday 
B)  Get a speeding ticket 
C)  Get good grades in college 
D)  Move from a farm to a city 
E)  Start smoking 
A)  Celebrate your 70th birthday 
B)  Get a speeding ticket 
C)  Get good grades in college 
D)  Move from a farm to a city 
E)  Start smoking

Question 16

Andrew is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

A)  He should base the amount of insurance on the price he paid for it. 
B)  He should insure the building for 75% of its replacement cost. 
C)  He should use the replacement value method for settling claims to receive the full cost of repairing or replacing his personal belongings. 
D)  His personal belongings should automatically be covered with his home at 125% of his home's insured amount. 
E)  His insured amount should remain the same as long as he lives in his house. 
A)  He should base the amount of insurance on the price he paid for it. 
B)  He should insure the building for 75% of its replacement cost. 
C)  He should use the replacement value method for settling claims to receive the full cost of repairing or replacing his personal belongings. 
D)  His personal belongings should automatically be covered with his home at 125% of his home's insured amount. 
E)  His insured amount should remain the same as long as he lives in his house.

Question 17

An assigned risk pool is a method of calculating the insurance premiums for various groups of drivers.

Accepted Answer

A) True 
 B)False

Question 18

Motor vehicle coverage typically includes all of the following except

Accepted Answer

A)  Most legal expenses. 
B)  Bodily injury liability up to a specific level for all injured in an accident. 
C)  Medical payments up to a policy limit. 
D)  Bodily injury liability of all expenses, no matter the cost, for the most injured. 
E)  Uninsured motorist's protection. 
A)  Most legal expenses. 
B)  Bodily injury liability up to a specific level for all injured in an accident. 
C)  Medical payments up to a policy limit. 
D)  Bodily injury liability of all expenses, no matter the cost, for the most injured. 
E)  Uninsured motorist's protection.

Question 19

If you choose to avoid the risk of a traffic accident by not driving to work,you are using

Accepted Answer

A)  Risk avoidance. 
B)  Risk reduction. 
C)  Risk assumption. 
D)  Risk shifting. 
E)  Risk increasing. 
A)  Risk avoidance. 
B)  Risk reduction. 
C)  Risk assumption. 
D)  Risk shifting. 
E)  Risk increasing.

Question 20

Patrick has an old beater car and wants to keep his insurance costs down.In order to minimize the financial impact of an accident he may cause,he should,at a minimum,carry which type of insurance?

Accepted Answer

A)  Property damage liability. 
B)  Collision. 
C)  Comprehensive physical damage. 
D)  All of these are required for all vehicles. 
E)  No coverage is required for any driver in the United States. 
A)  Property damage liability. 
B)  Collision. 
C)  Comprehensive physical damage. 
D)  All of these are required for all vehicles. 
E)  No coverage is required for any driver in the United States.

Which of the following is NOT one of the commonly used general risk management techniques?

The failure to take ordinary or reasonable care to prevent accidents from happening is called

A policy that supplements your basic personal liability coverage is called a(n)

Amber had permission from Bradley to borrow his car to run some errands.Unfortunately,while Amber was driving,she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist.Based on her experience,which of the following would be true?

Mortgage lenders require that homeowners purchase home insurance.

Robby fell on some ice on Peter's front steps and broke his arm.This is an example of a risk covered by the personal liability portion of Peter's homeowner's policy.

Caroline was found liable in an accident.This was probably not due to negligence on her part.

Emergency road service coverage includes coverage for a tow to a service station as well as repairs to make the vehicle drivable.

Barbara left a skateboard on her front steps.A windstorm swept the skateboard up and through her window.The windstorm was a

One way to keep auto insurance rates down is to insure each vehicle you own with a different insurer.

Identify at least three home insurance policy forms,and list the coverages of each.

Every state in the United States has a law requiring people to carry motor vehicle insurance.

An insurance company will

Homeowner's insurance excludes detached structures.

Which of the following should reduce your auto insurance premium?

Andrew is applying for insurance for his new home.Which of the following is correct?

An assigned risk pool is a method of calculating the insurance premiums for various groups of drivers.

Motor vehicle coverage typically includes all of the following except

If you choose to avoid the risk of a traffic accident by not driving to work,you are using

Patrick has an old beater car and wants to keep his insurance costs down.In order to minimize the financial impact of an accident he may cause,he should,at a minimum,carry which type of insurance?

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

Which of the following is NOT one of the commonly used general risk management techniques?

The failure to take ordinary or reasonable care to prevent accidents from happening is called

A policy that supplements your basic personal liability coverage is called a(n)

Amber had permission from Bradley to borrow his car to run some errands.Unfortunately,while Amber was driving,she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist.Based on her experience,which of the following would be true?

Mortgage lenders require that homeowners purchase home insurance.

Robby fell on some ice on Peter's front steps and broke his arm.This is an example of a risk covered by the personal liability portion of Peter's homeowner's policy.

Caroline was found liable in an accident.This was probably not due to negligence on her part.

Emergency road service coverage includes coverage for a tow to a service station as well as repairs to make the vehicle drivable.

Barbara left a skateboard on her front steps.A windstorm swept the skateboard up and through her window.The windstorm was a

One way to keep auto insurance rates down is to insure each vehicle you own with a different insurer.

Identify at least three home insurance policy forms,and list the coverages of each.

Every state in the United States has a law requiring people to carry motor vehicle insurance.

An insurance company will

Homeowner's insurance excludes detached structures.

Which of the following should reduce your auto insurance premium?

Andrew is applying for insurance for his new home.Which of the following is correct?

An assigned risk pool is a method of calculating the insurance premiums for various groups of drivers.

Motor vehicle coverage typically includes all of the following except

If you choose to avoid the risk of a traffic accident by not driving to work,you are using

Patrick has an old beater car and wants to keep his insurance costs down.In order to minimize the financial impact of an accident he may cause,he should,at a minimum,carry which type of insurance?

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