Question 1

If you need information to compare Acme Home Insurance and Zebra Home Insurance, you should contact the state insurance commissioner or a consumer organization that deals with insurance.

Accepted Answer

A) True 
 B)False  True

Question 2

An insurance claim is a request for payment to cover financial losses.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following should reduce your auto insurance premium?

Accepted Answer

A)   Increase your number of claims
B)   Get a speeding ticket
C)   Maintain good grades in college
D)   Decrease your deductible
E)   Start smoking C

Question 4

Once a risk management plan is put into action, it should remain the same even as family needs change.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

Risk management is an organized plan for protecting yourself, your family, and your property.

Accepted Answer

A) True 
 B)False

Question 9

An example of a peril is defective wiring.

Accepted Answer

A) True 
 B)False

Question 10

Insurance that covers valuable items, such as an expensive musical instrument, is called

Accepted Answer

A)   Buildings and other structures coverage.
B)   Homeowner's insurance.
C)   Personal property floater.
D)   Household inventory insurance.
E)   Personal liability insurance.

Question 11

The main goal when setting insurance goals is to

Accepted Answer

A)   Increase possible loss of income caused by illness.
B)   Increase possible loss of property caused by perils.
C)   Maximize personal property and liability risks.
D)   Keep the coverage constant or unchanged throughout one's life.
E)   Minimize personal, property, and liability risks.

Question 12

Consumer organizations, such as Consumer Reports, rate insurance companies on a regular basis.

Accepted Answer

A) True 
 B)False

Question 13

Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her

Accepted Answer

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

Question 14

If you choose to take responsibility for the negative results of a risk, you are using

Accepted Answer

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

Question 15

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

Accepted Answer

A)   risk reduction
B)   risk assumption
C)   risk shifting
D)   risk avoidance
E)   risk increase

Question 16

Deductibles are a combination of risk assumption and risk shifting where the insured person pays the first part of the claim (deductible) and the rest of the claim is shifted to the insurance company.

Accepted Answer

A) True 
 B)False

Question 17

Yogi 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 to rebuild or repair the new home.
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 insured amount should remain the same as long as he lives in his house.

Question 18

Motor vehicle crashes cost over ______ in lost wages and medical bills every year.

Accepted Answer

A)   $10,000
B)   $750,000
C)   $12 million
D)   $150 billion
E)   $2 trillion

Question 19

Vincent 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 55-75% of his home's insured amount.
E)   His insured amount should remain the same as long as he lives in his house.

Question 20

Personal property insurance covers

Accepted Answer

A)   The theft of jewelry valued at $25,000.
B)   Furniture and appliances, but not clothing or some electronics.
C)   Clothing and some electronics, but not furniture and appliances.
D)   All items up to 200% of the insured value of the home.
E)   Personal property items up to 55-75% of the insured value of the home.

Exam 8: Home and Automobile Insurance

If you need information to compare Acme Home Insurance and Zebra Home Insurance, you should contact the state insurance commissioner or a consumer organization that deals with insurance.

An insurance claim is a request for payment to cover financial losses.

Which of the following should reduce your auto insurance premium?

Once a risk management plan is put into action, it should remain the same even as family needs change.

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

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

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

Risk management is an organized plan for protecting yourself, your family, and your property.

An example of a peril is defective wiring.

Insurance that covers valuable items, such as an expensive musical instrument, is called

The main goal when setting insurance goals is to

Consumer organizations, such as Consumer Reports, rate insurance companies on a regular basis.

Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her

If you choose to take responsibility for the negative results of a risk, you are using

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

Deductibles are a combination of risk assumption and risk shifting where the insured person pays the first part of the claim (deductible) and the rest of the claim is shifted to the insurance company.

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

Motor vehicle crashes cost over ______ in lost wages and medical bills every year.

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

Personal property insurance covers