Question 1

If your neighbor falls down the steps in your home and sues,you could be held responsible for their injuries.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Given the large number of uninsured drivers,uninsured motorist coverage is needed.

Accepted Answer

A) True 
 B)False

Question 4

Auto insurance can be very expensive if you

Accepted Answer

A) have a new car. 
B) are a male under 25. 
C) have not taken a driver training course. 
D) have an older car without air bags. 
A) have a new car. 
B) are a male under 25. 
C) have not taken a driver training course. 
D) have an older car without air bags.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is not true concerning comprehensive and collision insurance?

Accepted Answer

A) If you are financing a car,this insurance is required by the lender. 
B) Financially,it is advisable to take out the lowest deductible possible. 
C) You may want to drop this coverage on an older car that is not being financed. 
D) The deductible is really a form of self insurance. 
A) If you are financing a car,this insurance is required by the lender. 
B) Financially,it is advisable to take out the lowest deductible possible. 
C) You may want to drop this coverage on an older car that is not being financed. 
D) The deductible is really a form of self insurance.

Question 7

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
(a)$600
(b)$900
(c)$240
(d)$360

Accepted Answer

(c)$600/5 years = $1

Question 8

Comprehensive coverage would cover financial losses due to

Accepted Answer

A) injuries caused by a driver without insurance. 
B) damage to your car in an accident for which you were at fault. 
C) damage to your car caused by wind or hail. 
D) damage to a neighbor's tree with your car. 
A) injuries caused by a driver without insurance. 
B) damage to your car in an accident for which you were at fault. 
C) damage to your car caused by wind or hail. 
D) damage to a neighbor's tree with your car.

Question 9

The additional living expenses component of a homeowner's policy is designed to

Accepted Answer

A) pay for temporary housing while your home is repaired from covered damage. 
B) cover damage to your property while you are away from home. 
C) reimburse a homeowner for damage done by a visitor. 
D) pay for medical expenses or people injured on your property. 
A) pay for temporary housing while your home is repaired from covered damage. 
B) cover damage to your property while you are away from home. 
C) reimburse a homeowner for damage done by a visitor. 
D) pay for medical expenses or people injured on your property.

Question 10

The ________ is the amount that you will need to pay if your car is damaged in an accident that was your fault.

Accepted Answer

The answer of The ________ is the amount that you...

Question 11

Homeowner's insurance provides insurance in the event of property damage or personal liability relating to home ownership,but not theft.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The comprehensive or collision premium of a Rolls-Royce in relationship to a Chevy

Accepted Answer

A) will be higher because a Rolls-Royce costs more than a Chevy. 
B) will be lower because Rolls-Royce drivers will be more careful. 
C) depends on the state insurance rate structure in which the car is insured. 
D) is a poor investment. 
A) will be higher because a Rolls-Royce costs more than a Chevy. 
B) will be lower because Rolls-Royce drivers will be more careful. 
C) depends on the state insurance rate structure in which the car is insured. 
D) is a poor investment.

Question 14

The factor that will not reduce your insurance rate is

Accepted Answer

A) increasing your deductible. 
B) paying all speeding tickets promptly. 
C) purchasing older,less expensive vehicles. 
D) moving to a less risky town. 
A) increasing your deductible. 
B) paying all speeding tickets promptly. 
C) purchasing older,less expensive vehicles. 
D) moving to a less risky town.

Question 15

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 16

More than half of every dollar of auto insurance premiums received by insurance companies is used to cover costs associated with lawsuits.

Accepted Answer

A) True 
 B)False

Question 17

To significantly reduce your automobile insurance premiums and still have adequate coverage,you should

Accepted Answer

A) take the minimum levels of liability coverage. 
B) raise the deductibles on comprehensive and collision. 
C) waive medical payments coverage. 
D) waive uninsured motorist coverage. 
A) take the minimum levels of liability coverage. 
B) raise the deductibles on comprehensive and collision. 
C) waive medical payments coverage. 
D) waive uninsured motorist coverage.

Question 18

Most home insurance policies provide coverage for

Accepted Answer

A) earthquake damage. 
B) liability. 
C) flood damage. 
D) additional personal property floaters. 
A) earthquake damage. 
B) liability. 
C) flood damage. 
D) additional personal property floaters.

Question 19

The liability component of your homeowner's policy will cover all of the following situations except one.Which situation will not be covered?

Accepted Answer

A) Your dog bites a guest and the guest sues you 
B) While your accountant is visiting you,she trips on your carpet and sues you 
C) Your neighbor who thinks you have promised to trim a tree in his yard sues you for not doing it 
D) An uninvited salesman walking up your sidewalk trips and falls.He sues you. 
A) Your dog bites a guest and the guest sues you 
B) While your accountant is visiting you,she trips on your carpet and sues you 
C) Your neighbor who thinks you have promised to trim a tree in his yard sues you for not doing it 
D) An uninvited salesman walking up your sidewalk trips and falls.He sues you.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 11: Auto and Homeowners Insurance

If your neighbor falls down the steps in your home and sues,you could be held responsible for their injuries.

Independent insurance agents

Given the large number of uninsured drivers,uninsured motorist coverage is needed.

Auto insurance can be very expensive if you

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

Which of the following statements is not true concerning comprehensive and collision insurance?

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 (a)$600 (b)$900 (c)$240 (d)$360

Comprehensive coverage would cover financial losses due to

The additional living expenses component of a homeowner's policy is designed to

The ________ is the amount that you will need to pay if your car is damaged in an accident that was your fault.

Homeowner's insurance provides insurance in the event of property damage or personal liability relating to home ownership,but not theft.

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

The comprehensive or collision premium of a Rolls-Royce in relationship to a Chevy

The factor that will not reduce your insurance rate is

The 100 in 100/300/50 refers to the

More than half of every dollar of auto insurance premiums received by insurance companies is used to cover costs associated with lawsuits.

To significantly reduce your automobile insurance premiums and still have adequate coverage,you should

Most home insurance policies provide coverage for

The liability component of your homeowner's policy will cover all of the following situations except one.Which situation will not be covered?

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

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

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