Question 1

Younger drivers,especially males,between the ages of 16 and 25 are more likely to get in accidents,and therefore pay higher insurance premiums.

Accepted Answer

A) True 
 B)False

Question 2

Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.

Accepted Answer

A) True 
 B)False

Question 3

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.E) C) and D)
F) All of the above

Question 4

A deductible of $300 requires

Accepted Answer

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

Question 5

Which of the following features on your car will not result in lower premiums?

Accepted Answer

A)  Anti-lock brakes
B)  Mercury vapor headlights
C)  Air bags
D)  All of the above will reduce your premiums.E) A) and D)
F) All of the above

Question 6

Which of the following is not covered by renter's insurance?

Accepted Answer

A)  Medical expenses for injuries to visitors
B)  Replacement of personal items such as clothing
C)  Fire damage to the building's roof
D)  Cost of legal action due to personal liability claimsE) A) and B)
F) C) and D)

Question 7

In general,insurance companies generate their revenue from receiving payments for policies and from earning a return from investing the proceeds until the funds are needed to cover claims.

Accepted Answer

A) True 
 B)False

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)  Both A and B are correct.
D)  the increases in value of their corporate stock.E) C) and D)
F) B) and C)

Question 9

If you have good health insurance,you should probably not take out medical payments coverage on your automobile policy.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not covered in a standard homeowner's policy?

Accepted Answer

A)  Lightening hits your house and it burns to the ground
B)  Your house is broken into and all the furniture is stolen
C)  The river you live near overflows its bank and washes your house away
D)  Hailstorm damages the roof of your houseE) B) and D)
F) A) and C)

Question 11

To cover additional personal property not adequately covered by your homeowner's policy,you should take out a(n) ________ policy.

Accepted Answer

A)  personal liability
B)  personal articles floater
C)  extra value
D)  umbrellaE) All of the above
F) A) and B)

Question 12

Independent insurance agents are those that work for one particular company.

Accepted Answer

A) True 
 B)False

Question 13

A cash value home insurance policy pays the actual costs of replacing the damaged property.

Accepted Answer

A) True 
 B)False

Question 14

Insurance is not a good option for managing risk when

Accepted Answer

A)  the probability of loss is very small.
B)  the benefits outweigh the costs.
C)  you want to protect your existing and future net worth.
D)  there is a likelihood that an event will cause a large financial loss.E) A) and C)
F) All of the above

Question 15

The most popular forms of insurance for individuals are property and casualty,life insurance,and health insurance.

Accepted Answer

A) True 
 B)False

Question 16

Your car collides with a vehicle that has just run a red light,and your policy limits are 200/300/100.What is the maximum coverage under your policy for damages to the vehicle that you struck?
(a)$200,000
(b)$300,000
(c)$100,000
(d)Zero

Accepted Answer

(d)Since the other driver was ...

Question 17

Which of the following is considered personal property for home insurance coverage?

Accepted Answer

A)  An automobile
B)  A garage
C)  Furniture
D)  Trees and shrubsE) A) and C)
F) None of the above

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Automobile insurance rates have risen recently in part due to fraud.Some common forms of fraud include faking

Accepted Answer

A)  an accident or injury.
B)  a person's name or relationship to the injured person.
C)  ownership of a car.
D)  All of the above.E) C) and D)
F) A) and B)

Question 20

The first step in the risk management process is to insure against risk.

Accepted Answer

A) True 
 B)False

Exam 11: Auto and Homeowners Insurance

The first step in the risk management process is to insure against risk.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In general,insurance companies generate their revenue from receiving payments for policies and from earning a return from investing the proceeds until the funds are needed to cover claims.

Correct AnswerverifiedShow Answer

A deductible of $300 requires

Correct AnswerverifiedShow Answer

Most states have financial responsibility laws that require individuals who drive cars to purchase a minimum amount of liability insurance.

Correct AnswerverifiedShow Answer

Which of the following is not covered by renter's insurance?

Correct AnswerverifiedShow Answer

Your car collides with a vehicle that has just run a red light,and your policy limits are 200/300/100.What is the maximum coverage under your policy for damages to the vehicle that you struck? (a)$200,000 (b)$300,000 (c)$100,000 (d)Zero

Correct Answerverified(d)Since the other driver was ...View AnswerShow Answer

In general,insurance companies generate their revenues from

Correct AnswerverifiedShow Answer

If you have good health insurance,you should probably not take out medical payments coverage on your automobile policy.

Correct AnswerverifiedShow Answer

Which of the following is considered personal property for home insurance coverage?

Correct AnswerverifiedShow Answer

Which of the following is not covered in a standard homeowner's policy?

Correct AnswerverifiedShow Answer

Automobile insurance rates have risen recently in part due to fraud.Some common forms of fraud include faking

Correct AnswerverifiedShow Answer

Independent insurance agents are those that work for one particular company.

Correct AnswerverifiedShow Answer

To cover additional personal property not adequately covered by your homeowner's policy,you should take out a(n) ________ policy.

Correct AnswerverifiedShow Answer

Younger drivers,especially males,between the ages of 16 and 25 are more likely to get in accidents,and therefore pay higher insurance premiums.

Correct AnswerverifiedShow Answer

Insurance is not a good option for managing risk when

Correct AnswerverifiedShow Answer

The most popular forms of insurance for individuals are property and casualty,life insurance,and health insurance.

Correct AnswerverifiedShow Answer

A deductible is an amount

Correct AnswerverifiedShow Answer

Which of the following features on your car will not result in lower premiums?

Correct AnswerverifiedShow Answer

A cash value home insurance policy pays the actual costs of replacing the damaged property.

Correct AnswerverifiedShow Answer

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(d)Since the other driver was ...
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