Question 1

Which of the following is the best case for the need for third party liability insurance coverage?

Accepted Answer

A) You cause a car accident and damage your Honda Civic. 
B) You cause a car accident and destroy the other driver's Maserati. 
C) You cause a car accident which disables a pedestrian. 
D) You cause a car accident and the injuries cause you to miss six months of work.

Question 2

In the context of insurance,the term liability is used to mean that you may be required to pay someone for damages that you caused.

Accepted Answer

A) True 
 B)False

Question 3

If your neighbour falls down the steps in your home and sues you for damages,you could be held responsible to pay compensation for his or her injuries and rehabilitation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is 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) If you were in an accident,this coverage could enable you to replace your older car with a new one. 
D) The deductible is really a form of transferring insurance.

Question 5

A 46-inch HDTV originally purchased for $5000 has a life expectancy of seven years.It is five years old and has been destroyed in a fire.Today a similar TV would cost $2100.Your cash value policy will

Accepted Answer

A) pay you $2100 to replace it with a similar model available now. 
B) pay you the $5000 original purchase price. 
C) pay you $1429 as settlement in full. 
D) pay you the accumulated depreciation value of $3571.

Question 6

Use specific examples to discuss whether it is justifiable that government sets rules for requiring people to have liability insurance coverage.Should individuals be allowed to choose whether or not they are prepared to accept risk? When,if ever,is it justifiable for government to impose regulations on this?

Accepted Answer

The answer of Use specific examples to discuss whether it...

Question 7

Insurance agents for an insurance company

Accepted Answer

A) market insurance policies. 
B) calculate the risks of specific policies. 
C) decide what insurance policies to offer. 
D) decide what premiums to charge.

Question 8

Legal expenses incurred by an insurance company when defending you against a lawsuit are deducted from your limits of liability coverage.

Accepted Answer

A) True 
 B)False

Question 9

If Peter caused an accident,and his passenger,John,had to miss work for a month while he recovered,Peter's bodily injury liability coverage could cover medical expenses and loss of income for John.

Accepted Answer

A) True 
 B)False

Question 10

Consider the loss from fire damage of furniture which cost $6000 thee years ago and has an expected life of ten years.This furniture would cost $9000 to purchase today.Under a replacement cost policy,how much would the insurance company pay you for this loss?

Accepted Answer

A) $6000. 
B) $9000. 
C) $4200. 
D) $6300.

Question 11

Underwriters for an insurance company

Accepted Answer

A) calculate the risks of specific insurance requests from the public. 
B) market insurance policies. 
C) recommend insurance policies that fit customers' needs. 
D) invest the premiums of policies to make their company a profit.

Question 12

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.

Question 13

For auto insurance,which area has the highest level of insurance coverage required by law?

Accepted Answer

A) Comprehensive coverage 
B) Accident benefits coverage 
C) Uninsured motorist coverage 
D) Third party liability coverage

Question 14

Which of the following actions is a suggestion to reduce your homeowner's insurance?

Accepted Answer

A) Install better locks or a security system. 
B) Make prompt small claims against your policy. 
C) Compare rates and change insurance companies whenever you find better rates. 
D) Stay with one insurance company throughout your life.

Question 15

How much coverage would be provided under a standard homeowner's cash value policy which deems furniture to be fully depreciated in ten years,if your antique dresser from the 1860s is destroyed by fire? You purchased the dresser eleven years ago for $1300 and it was recently appraised at $2600,and you have an offer from an antique collector to purchase it for $3100.

Accepted Answer

A) $0 
B) $1300 
C) $2600 
D) $3100

Question 16

Comprehensive coverage would cover financial losses due to

Accepted Answer

A) damage to your car caused by a hit and run collision. 
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 neighbour's fence caused by your car.

Question 17

Which of the following is True of tenants insurance?

Accepted Answer

A) You only need to buy it if you have possessions of considerable value. 
B) It will not cover you if a visitor sues you for an injury received in your apartment. 
C) It covers only your own property,not the property of your landlord. 
D) Because premiums are low,most people who need it have renter's insurance.

Question 18

Since insurance companies rely mostly on their premiums to cover claims,they price their insurance policies to reflect the probability of a claim and the size of the claim.

Accepted Answer

A) True 
 B)False

Question 19

More than sixty percent of homeowner's insurance premiums go towards settling claims.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is True about pure no-fault insurance?

Accepted Answer

A) No one is deemed to be at fault when an accident occurs. 
B) You cannot sue the at-fault driver for pain and suffering and economic loss. 
C) It is the most cost effective insurance because there are no legal expenses. 
D) The dollar value of accident benefits is much lower.

Exam 8: Protecting Your Wealth - Auto and Homeowner's Insurance

Which of the following is the best case for the need for third party liability insurance coverage?

In the context of insurance,the term liability is used to mean that you may be required to pay someone for damages that you caused.

If your neighbour falls down the steps in your home and sues you for damages,you could be held responsible to pay compensation for his or her injuries and rehabilitation.

Which of the following statements is True concerning comprehensive and collision insurance?

A 46-inch HDTV originally purchased for $5000 has a life expectancy of seven years.It is five years old and has been destroyed in a fire.Today a similar TV would cost $2100.Your cash value policy will

Insurance agents for an insurance company

Legal expenses incurred by an insurance company when defending you against a lawsuit are deducted from your limits of liability coverage.

If Peter caused an accident,and his passenger,John,had to miss work for a month while he recovered,Peter's bodily injury liability coverage could cover medical expenses and loss of income for John.

Consider the loss from fire damage of furniture which cost $6000 thee years ago and has an expected life of ten years.This furniture would cost $9000 to purchase today.Under a replacement cost policy,how much would the insurance company pay you for this loss?

Underwriters for an insurance company

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

For auto insurance,which area has the highest level of insurance coverage required by law?

Which of the following actions is a suggestion to reduce your homeowner's insurance?

Comprehensive coverage would cover financial losses due to

Which of the following is True of tenants insurance?

Since insurance companies rely mostly on their premiums to cover claims,they price their insurance policies to reflect the probability of a claim and the size of the claim.

More than sixty percent of homeowner's insurance premiums go towards settling claims.

Which of the following is True about pure no-fault insurance?