Question 1

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 2

The best way to reduce your homeowner's insurance premiums is to

Accepted Answer

A)  insure your home for only 60% of its value, since it is unlikely to be completely destroyed. 
B)  drop coverage for medical payments. 
C)  increase deductibles. 
D)  eliminate liability coverage. 
A)  insure your home for only 60% of its value, since it is unlikely to be completely destroyed. 
B)  drop coverage for medical payments. 
C)  increase deductibles. 
D)  eliminate liability coverage.

Question 3

While renter's insurance does protect your property,it does not cover liability in the event that a friend or neighbor is injured while at your apartment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not true about state financial responsibility laws?

Accepted Answer

A)  They require individuals who drive cars to purchase a minimum amount of liability insurance. 
B)  They are the same for all states. 
C)  They may require proof of insurance to register a car. 
D)  They may require proof of insurance when drivers are involved in an accident. 
A)  They require individuals who drive cars to purchase a minimum amount of liability insurance. 
B)  They are the same for all states. 
C)  They may require proof of insurance to register a car. 
D)  They may require proof of insurance when drivers are involved in an accident.

Question 5

The amount of damage that you will be required to cover if your car is involved in an accident that is your fault is your

Accepted Answer

A)  deductible. 
B)  co-payment. 
C)  premium. 
D)  fair share. 
A)  deductible. 
B)  co-payment. 
C)  premium. 
D)  fair share.

Question 6

Liability insurance coverage would cost more for an expensive car than for an inexpensive car of the same age.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?

Accepted Answer

A)  Medical payments coverage 
B)  Bodily injury liability coverage 
C)  Collision coverage 
D)  Comprehensive coverage 
A)  Medical payments coverage 
B)  Bodily injury liability coverage 
C)  Collision coverage 
D)  Comprehensive coverage

Question 8

In general,insurance companies generate their revenues from

Accepted Answer

A)  receiving payments for policies. 
B)  investing the proceeds of premiums until the funds are needed to cover losses. 
C)  the increases in the value of their corporate stock. 
D)  Both A and B are correct. 
A)  receiving payments for policies. 
B)  investing the proceeds of premiums until the funds are needed to cover losses. 
C)  the increases in the value of their corporate stock. 
D)  Both A and B are correct.

Question 9

What do policy limits of 200/300/100 on an automobile insurance policy mean?

Accepted Answer

$200,000 per person injured in

Question 10

Which of the following will not result in lower auto insurance premiums?

Accepted Answer

A)  Living in a rural area 
B)  Driving a more expensive car 
C)  Having a high FICO score 
D)  All of the above will reduce your premiums. 
A)  Living in a rural area 
B)  Driving a more expensive car 
C)  Having a high FICO score 
D)  All of the above will reduce your premiums.

Question 11

The deductible is the amount of damage to your car that you are responsible for paying before any coverage is provided by the insurance company.

Accepted Answer

A) True 
 B)False

Question 12

List two ways to reduce your homeowner's insurance premiums.

Accepted Answer

Any two of the following:
∙ Increase you

Question 13

A deductible of $300 requires

Accepted Answer

A)  the insurance company to pay the first $300 at 100% of damages. 
B)  you to pay the first $300 of damages. 
C)  the insurance company to pay the first $300 at 80% of damages. 
D)  the insurance company of the party at fault to pay. 
A)  the insurance company to pay the first $300 at 100% of damages. 
B)  you to pay the first $300 of damages. 
C)  the insurance company to pay the first $300 at 80% of damages. 
D)  the insurance company of the party at fault to pay.

Question 14

Auto insurance can be very expensive if you

Accepted Answer

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

Question 15

Use the following two columns of items to answer the matching questions below:
-comprehensive coverage

Accepted Answer

A) requires individuals who drive cars to purchase a minimum amount of liability insurance 
B) pays for injuries to you or people in your car in an accident where you (the driver) are at fault 
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 as a result of theft, fire, vandalism, or various other events 
E) vehicle insurance to cover various injuries, your property, and the property of others
F)covers damage to your car when you are at fault in an accident 
A) requires individuals who drive cars to purchase a minimum amount of liability insurance 
B) pays for injuries to you or people in your car in an accident where you (the driver) are at fault 
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 as a result of theft, fire, vandalism, or various other events 
E) vehicle insurance to cover various injuries, your property, and the property of others
F)covers damage to your car when you are at fault in an accident

Question 16

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 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

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 19

A deductible is an amount

Accepted Answer

A)  the person at fault will pay. 
B)  not paid by the insurance company. 
C)  if increased will increase the premium. 
D)  mandated by state law. 
A)  the person at fault will pay. 
B)  not paid by the insurance company. 
C)  if increased will increase the premium. 
D)  mandated by state law.

Question 20

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.

Exam 11: Auto and Homeowners Insurance

Additional coverage on your automobile insurance policy can be purchased for

The best way to reduce your homeowner's insurance premiums is to

While renter's insurance does protect your property,it does not cover liability in the event that a friend or neighbor is injured while at your apartment.

Which of the following is not true about state financial responsibility laws?

The amount of damage that you will be required to cover if your car is involved in an accident that is your fault is your

Liability insurance coverage would cost more for an expensive car than for an inexpensive car of the same age.

Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?

In general,insurance companies generate their revenues from

What do policy limits of 200/300/100 on an automobile insurance policy mean?

Which of the following will not result in lower auto insurance premiums?

The deductible is the amount of damage to your car that you are responsible for paying before any coverage is provided by the insurance company.

List two ways to reduce your homeowner's insurance premiums.

A deductible of $300 requires

Auto insurance can be very expensive if you

Use the following two columns of items to answer the matching questions below: -comprehensive coverage

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

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

Independent insurance agents

A deductible is an amount

The factor that will not reduce your insurance rate is

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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