Insurance Unit Study Guide
Uma's renters insurance policy has a premium of $15/month, a deductible of $1000, and a personal property coverage limit of $40,000. Her apartment is burglarized and $5,600 of possessions are stolen or destroyed. How much will Uma pay in order to replace her stuff?
$1000
It's a good idea to have renters insurance in case...
A guest is injured while inside your apartment
You let your friend Drucella borrow your car for the weekend while hers is in the shop. She turned on a "No Right on Red" and hit another car. What will happen since Drucella was at-fault?
Because you own the car, you can be held responsible for the accident that she caused.
If your car is broken into and you have to get new windows, what kind of coverage must you have in order for the insurance company to cover the cost of repairs?
Comprehensive
What is one difference between an HSA and an FSA?
FSA funds must be used up annually, while HSA funds can accumulate year over year.
How is long term disability insurance different from health insurance?
Health insurance only covers the cost of healing the injury/illness, while long term disability covers a percentage of your income while you are away from work due to the injury/illness.
What are the average MONTHLY costs for homeowners and renters insurance across the US?
Homeowners = $100, Renters = $15
The number one reason risk pooling is valuable to the insurance industry is...
It brings together many individuals' premiums so that there is money to cover the select few with losses.
Which of the following auto insurance coverages are you REQUIRED to carry in most states (49 out of 50)?
Liability
Optional insurance plans, such as cell phone and pet insurance, can be useful for people who have a history of frequent visits to repair shops or vets. For folks who do not often need these services, which of the following options is the BEST alternative to these types of insurance plans?
Setting aside the monthly premium amount into a savings account as an emergency fund.
If someone gets their health insurance through Medicaid, that means...
Their premium is likely covered by the Federal and/or state government.
All of the following represent a compelling reason to pay a higher insurance premium EXCEPT...
You will receive a higher level of customer service and better care
The actuarial value of a plan is...
the percentage of costs the insurance company will cover.
Going to an in-network doctor is a good idea, because...
you will save on overall costs when compared to seeing an out-of-network doctor.
Which of the following statements about opting in to your employer sponsored healthcare plan vs. getting an individual healthcare plan is TRUE?
An employer sponsored healthcare plan means that your employer likely pays the majority of your premium.
A standard homeowners policy will include all of these coverage bundles except...
Earthquake and Flood
After getting into a car accident, you should immediately...
Move you and your car to a safe area if possible and check to see if anyone is hurt.
Margaret opened her mail this morning and is shocked to see her total hospital bill for her recent injury. She's worried she can't afford to pay this bill. What is the BEST thing she can do?
Negotiate a repayment plan in which she can pay the bill back in installments.
Ricardo was not paying attention to the flow of traffic and rear-ended the car in front of him. Both cars have damage, but he doesn't have car insurance. What will most likely happen?
Ricardo will have to pay out-of-pocket for auto repair and possible medical bills for the person he hit.
Sloane is 17 years old and after talking with her parents wants to purchase life insurance. How can she benefit from life insurance as a teenager?
She will guarantee insurability while she's young and healthy.
Allison just turned 26 and is thinking of signing up for a Catastrophic Plan since she doesn't need a lot of medical care. Which of the following is TRUE?
She will have a high deductible.
Where does funding for Social Security come from?
Social Security payroll taxes
What is the difference between a declaration page and an agreement when referring to your homeowners insurance policy?
The declaration page outlines the premiums, deductibles, and coverage limits, while the agreement provides details on exact coverage
Each of the following factors affect your monthly auto insurance premium EXCEPT...
Your local auto shop's customer service reviews.
If you feel your insurance company is not upholding your policy correctly and you can't resolve it directly with the company, you will likely have the most success by contacting...
Your state's Department of Insurance or Insurance Bureau
