Question 1

Samuel should buy insurance in order to eliminate his risk of losses.

Accepted Answer

A) True 
 B)False

Question 2

The actual cash value method of settling claims is based on the replacement cost of an item less depreciation.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a type of motor vehicle insurance available to drivers?

Accepted Answer

A)  Wage loss insurance 
B)  Towing and emergency road service coverage 
C)  Rental reimbursement coverage 
D)  All of the above may be available to drivers 
E)  None of the above are available to drivers. 
A)  Wage loss insurance 
B)  Towing and emergency road service coverage 
C)  Rental reimbursement coverage 
D)  All of the above may be available to drivers 
E)  None of the above are available to drivers.

Question 4

Collision insurance covers your vehicle against risks such as falling objects, hail, and other nonaccident situations.

Accepted Answer

A) True 
 B)False

Question 5

It is illegal to use a credit score to determine the premium to charge an individual.

Accepted Answer

A) True 
 B)False

Question 6

A household inventory should be stored in a home office.

Accepted Answer

A) True 
 B)False

Question 7

An assigned risk pool includes people who are able to obtain auto insurance due to a great driving record.

Accepted Answer

A) True 
 B)False

Question 8

Homeowner's insurance includes all of the forms listed here except

Accepted Answer

A)  HO-1. 
B)  HO-2. 
C)  HO-5. 
D)  HO-6. 
E)  HO-8. 
A)  HO-1. 
B)  HO-2. 
C)  HO-5. 
D)  HO-6. 
E)  HO-8.

Question 9

Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his

Accepted Answer

A)  Uninsured motorist's protection. 
B)  Medical payments coverage. 
C)  Collision coverage. 
D)  Comprehensive physical damage coverage. 
E)  Bodily injury liability coverage. 
A)  Uninsured motorist's protection. 
B)  Medical payments coverage. 
C)  Collision coverage. 
D)  Comprehensive physical damage coverage. 
E)  Bodily injury liability coverage.

Question 10

If you are borrowing money to buy a home, the lender will require that homeowners purchase home (property) insurance.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT correct?

Accepted Answer

A)  If you live in a rural area, your auto insurance premium will likely be lower than if you live in a large city. 
B)  In general, young drivers (under 25) and elderly drivers (over 70) have more frequent and more serious accidents. 
C)  Multiple accidents or tickets will increase insurance rates. 
D)  The cost and number of claims you have should not affect your premium. 
E)  Your credit score can cause your premium to change. 
A)  If you live in a rural area, your auto insurance premium will likely be lower than if you live in a large city. 
B)  In general, young drivers (under 25) and elderly drivers (over 70) have more frequent and more serious accidents. 
C)  Multiple accidents or tickets will increase insurance rates. 
D)  The cost and number of claims you have should not affect your premium. 
E)  Your credit score can cause your premium to change.

Question 12

Homeowner's insurance covers all of the following except

Accepted Answer

A)  Personal property. 
B)  Personal liability and related coverage. 
C)  Additional living expenses. 
D)  Automobiles. 
E)  Building in which you live and any other structures on the property. 
A)  Personal property. 
B)  Personal liability and related coverage. 
C)  Additional living expenses. 
D)  Automobiles. 
E)  Building in which you live and any other structures on the property.

Question 13

A brick home will usually cost less to insure than a similar structure made of wood.

Accepted Answer

A) True 
 B)False

Question 14

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 the cost of injuries 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 the cost of injuries 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 15

Which of the following questions should one ask when developing a risk management plan?

Accepted Answer

A)  What do I need to insure? 
B)  How much should I insure something for? 
C)  What kind of insurance should I buy? 
D)  Whom should I buy insurance from? 
E)  All of these questions should be asked when developing a risk management plan. 
A)  What do I need to insure? 
B)  How much should I insure something for? 
C)  What kind of insurance should I buy? 
D)  Whom should I buy insurance from? 
E)  All of these questions should be asked when developing a risk management plan.

Question 16

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 17

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

Accepted Answer

A) True 
 B)False

Question 18

Tom wanted to receive as many discounts on his home insurance as possible. Which of the following would NOT provide a discount?

Accepted Answer

A)  Smoke detector. 
B)  Fire extinguisher. 
C)  Deadbolt locks. 
D)  Alarm systems. 
E)  All of these should provide a discount for Tom. 
A)  Smoke detector. 
B)  Fire extinguisher. 
C)  Deadbolt locks. 
D)  Alarm systems. 
E)  All of these should provide a discount for Tom.

Question 19

Barnaby 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 actual cash value method for settling claims to receive the full cost of repairing or replacing his personal belongings. 
D)  His personal belongings should be covered with his home at 125% of his home's insured amount. 
E)  His coverage should be increased as construction costs rise. 
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 actual cash value method for settling claims to receive the full cost of repairing or replacing his personal belongings. 
D)  His personal belongings should be covered with his home at 125% of his home's insured amount. 
E)  His coverage should be increased as construction costs rise.

Question 20

Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his

Accepted Answer

A)  Uninsured motorist's protection. 
B)  Property damage liability coverage. 
C)  Collision coverage. 
D)  Comprehensive physical damage coverage. 
E)  The vehicle would not be covered because he was not in it when the damage occurred. 
A)  Uninsured motorist's protection. 
B)  Property damage liability coverage. 
C)  Collision coverage. 
D)  Comprehensive physical damage coverage. 
E)  The vehicle would not be covered because he was not in it when the damage occurred.

Samuel should buy insurance in order to eliminate his risk of losses.

The actual cash value method of settling claims is based on the replacement cost of an item less depreciation.

Which of the following is a type of motor vehicle insurance available to drivers?

Collision insurance covers your vehicle against risks such as falling objects, hail, and other nonaccident situations.

It is illegal to use a credit score to determine the premium to charge an individual.

A household inventory should be stored in a home office.

An assigned risk pool includes people who are able to obtain auto insurance due to a great driving record.

Homeowner's insurance includes all of the forms listed here except

Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his

If you are borrowing money to buy a home, the lender will require that homeowners purchase home (property) insurance.

Which of the following is NOT correct?

Homeowner's insurance covers all of the following except

A brick home will usually cost less to insure than a similar structure made of wood.

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?

Which of the following questions should one ask when developing a risk management plan?

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

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

Tom wanted to receive as many discounts on his home insurance as possible. Which of the following would NOT provide a discount?

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

Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 8: Home and Automobile Insurance

Samuel should buy insurance in order to eliminate his risk of losses.

The actual cash value method of settling claims is based on the replacement cost of an item less depreciation.

Which of the following is a type of motor vehicle insurance available to drivers?

Collision insurance covers your vehicle against risks such as falling objects, hail, and other nonaccident situations.

It is illegal to use a credit score to determine the premium to charge an individual.

A household inventory should be stored in a home office.

An assigned risk pool includes people who are able to obtain auto insurance due to a great driving record.

Homeowner's insurance includes all of the forms listed here except

Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his

If you are borrowing money to buy a home, the lender will require that homeowners purchase home (property) insurance.

Which of the following is NOT correct?

Homeowner's insurance covers all of the following except

A brick home will usually cost less to insure than a similar structure made of wood.

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?

Which of the following questions should one ask when developing a risk management plan?

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

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

Tom wanted to receive as many discounts on his home insurance as possible. Which of the following would NOT provide a discount?

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

Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters