Module 13

An insurance company will pay for a loss as covered in an insurance policy if the insured submits a claim .

claim

What must policyholders submit to get their insurer to pay for a loss

claim

Another word for indemnify is...

compensate.

How much the insurance company will pay in the event of an accident is called the...

coverage

A water pipe in your basement freezes and bursts, causing water damage.

covered

The ? for a health insurance policy determines how much the insured must pay before the insurance company pays for healthcare expenses.

deductible

The amount that the insured is responsible for before a loss is paid by an insurance company is the insurance policy's

deductible.

A landlord's insurance covers the personal property of renters that is located in rental units.

false

A lower deductible will reduce the premium for homeowners' insurance.

false

A worker laid off during a recession can only receive unemployment benefits if they purchased an unemployment insurance policy from an insurance company.

false

Anyone who is not working can receive unemployment insurance benefits.

false

Automobile insurance companies must cover every

false

Catastrophic health care plans cover routine healthcare services.

false

Coinsurance is the amount the insured has to pay for doctor's visits.

false

Everyone should buy only the minimum amount of automobile insurance coverage required by law in their state.

false

Gold health insurance plans provide better care than silver health insurance plans.

false

Health insurance can be denied to an individual based on preexisting conditions.

false

If a premium is not paid, an insurance policy will continue to cover any losses.

false

LTD insurance covers lost income for missed work if the insured misses work for any period over a week

false

LTD insurance replaces 100% of a person's income if they must miss work due to an accident or illness.

false

Liability insurance covers damage to your car.

false

People nearing retirement usually buy life insurance for the death benefit.

false

Renters' insurance never covers personal property that is not inside the rental unit.

false

Your credit score cannot be used to determine your eligibility for car insurance.

false

When healthier people buy more insurance than less healthy people, it is known as

propitious selection

What do policyholders pay regularly to the insurer?

premium

Which of the following is a cost of insurance?

premiums

Insurance companies make a profit if...

premiums exceed payouts.

If an insurance policy covers individual losses up to $2,000 and has a deductible of $200, the insured will be paid how much in the event of a covered loss of $2,500?

$2,000

In 2019, workers paid an average of _____ in health insurance premiums.

$6,000

Since 2009, the average deductible for health insurance policies has increased by...

150%

No-fault insurance

Allows drivers to assume no fault in an accident so they can ask their own insurance companies to pay the bills.

Bodily injury liability

Covers legal or medical expenses for injuries in an accident you caused.

Comprehensive physical damage

Covers repairs to a car damaged by an event other than an accident with another car.

Property damage liability

Covers repairs to a car damaged by an event other than an accident with another car.

Collision insurance

Covers the cost of repairs to damage caused by hitting or getting hit by another car.

Comprehensive car insurance covers which of the following?

Damage to your car from hail or lightning

insurance covers the insured if they are unable to work for an extended period of time due to an injury.

Disability

Individuals who purchase a house with a mortgage might be required to purchase which of the following?

Homeowners' insurance, Title insurance, Mortgage insurance

Uninsured/underinsured motorist protection

Insurance coverage that lets you get your own insurance company to pay your bills if you are in an accident with a motorist who has little or no insurance.

Medical payments coverage

Insurance coverage that pays your medical bills and those of your passengers after a car accident.

Renter's insurance

Insurance that covers possessions but not the dwelling.

liability

Legal responsibility to cover the costs of injuries to others or damage to the property of others.

Which type of insurance protects the insured from the cost of lawsuits?

Liability

Which of the following types of health insurance plans provides the most flexibility in selecting a doctor?

PPO

Personal property

Personal possessions you keep in your house—not the house itself.

The car owner is responsible for damage to another car when their friend is driving the car.

True

Endorsement

Special coverage for catastrophic events, such as earthquakes.

Floater insurance

Special coverage for high-value personal property, such as jewelry.

If you face a risk of loss from property damage, you can do which of the following?

Transfer the risk through insurance and Take precautions

Loss of use

When property insurance covers the costs of living elsewhere.

The payment for insurance coverage is called the...

premium

Asymmetric information in the health insurance market exists because consumers have...

more information about their health than insurers do.

While at the grocery store, you slip in the dairy aisle and sprain your wrist.

not covered

If you are liable in an accident, it means you are...

responsible.

A room-by-room inventory of your possessions is useful in the event of a renters' insurance claim.

true

Accidents and tickets will decrease a person's ability to buy automobile insurance.

true

Deductibles are a cost of insurance.

true

HMOs (Health Maintainence Organizations) have lower costs but less flexibility than other types of health insurance plans.

true

Higher premiums are associated with lower deductibles.

true

LTD insurance provides income replacement for lost wages resulting from an accident or injury.

true

Life insurance can be an important part of estate planning.

true

Most renters' policies pay for actual cash value.

true

Renters' insurance can sometimes include liability coverage.

true

Renters' insurance often includes loss-of-use coverage to pay for somewhere to stay if you can't stay in your rental unit.

true

The deductible for a health insurance policy is the amount the insured must pay for medical care in a year before the insurance company pays.

true

The premium for a homeowners' insurance policy might be higher for a house that is far away from a fire department.

true

Virginia requires car owners to carry automobile liability insurance.

true

You should always file an insurance claim if someone was injured at the scene of an accident.

true