chapter 11 (auto and homeowner's insurance)
most high-risk driver
19 year old male
not a service company that would rate the financial condition of insurance companies?
Kelly's Blue Book
which of the following people would have the lowest insurance
a person living in a small town compared to a large one
one method of managing risk
accept risk by seeking to limit your exposure to a financial loss.
auto insurance rates are based upon all
age driving record gender -the number of miles and the type of driving you do each year
insurance can protect your existing net worth and also
also increase the likelihood that you will be able to increase your net worth in the future.
automobile insurance rates have risen recently in part due to fraud. some common forms of fraud include faking
an accident or injury
if you have a car accident in which another person in the other car is injured, the type of insurance that would protect you from financial loss is
auto insurance
vehicle insurance to cover various injuries, your property, and the property of others
auto insurance
insurance agents who work for one particular company are called
captive agents
all of the following actions are suggestions to reduce your homeowner's insurance except
change insurance companies whenever you renew your policy
comprehensive coverage would cover financial losses due to
damage to your car caused by wind or hail
which of the following is not covered by renter's insurance
fire damage to the buildings roof
considered personal property
furniture
all of the following may qualify for an auto discount
high grades, driver's training program, several cars insured with the same company
not a suggested risk management method
ignoring risks
of the following statements, which is not true regarding no-fault insurance
it helps determine which driver is at fault and which has no fault
which of the following is not true regarding medical payments coverage?
it is not recommended or needed if you have health insurance.
all of the following statements about uninsured motorist coverage are true except
it replaces bodily injury liability when you are at fault
which of the following is not a characteristic of an umbrella policy
it replaces other policies
the 100 in 100/300/50 refers to the
limit for bodily injury claims that can be paid to one person
underwriters for an insurance company do not
market insurance policies
pays for injuries to you or people in your car in an accident where you (the driver) are at fault
medical payments
which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?
medical payments
some states have implemented _______ insurance programs which do not hold a specific driver liable for causing an accident
no-fault
which of the following is not true about the state financial liability laws?
they are the same for all states
the liability component of your homeowner's policy will cover all of the following situations except one. which situation will not be covered?
your neighbor who thinks you have promised to trim a tree in his yard sues you for not doing it
additional coverage on your automobile insurance policy can be purchased for
-the cost of a rental var while your car is being prepared -the cost of towing, even if the problems are not the result of an accident
which of the following may be a reason why an insurance company decides not to renew your policy?
-you caused an accident as a result of drunk driving -your drivers license was suspended
which risk management alternative is feasible when the likelihood of an event that could cause a financial loss is very low and the potential financial loss due to the event is small?
accept risk
auto insurance can be very expensive if you
are a male under 25
most popular forms of insurance
are property and casualty, life insurance, and health insurance
the coverage that is designed to protect you if you cause an accident where the driver or passenger of the other car sustains injuries and sues you is called _______
bodily injury liability
covers damage to your car when you are at fault in an accident
collision coverage
covers damage to your car as a result of theft, fire, vandalism, or other non-accident events
comprehensive
which of the following is covered by renter's insurance
damage to a stove that the landlord purchased before you move in
amount of damage that you will be required to cover if your car is involved in an accident that is your fault is your
deductible
amount of risk you assume through first payment
deductible
the ______ is the amount that you will need to pay if your car is damaged in an accident that was your fault
deductible
one of the problems with no-fault automobile insurance is that it
doesn't penalize drivers who cause accidents to the degree that they should be
people are more willing to purchase or increase their insurance coverage when
economic conditions are favorable and incomes are higher
requires individuals who drive cars to purchase a minimum amount of liability insurance
financial responsibility laws
which of the following statements is not true concerning comprehensive and collision insurance?
financially, it is advisable to take out the lowest deductible possible
not popular form of insurance for individuals
general liability insurance
the best way to reduce your homeowner's insurance premiums is to
increase deductibles
the bodily injury liability coverage of your automobile policy will not pay for
injuries to others in your car due to an accident for which you were at fault
in general, the most expensive part of your automobile policy is ______ coverage
liability
most home insurance policies provide coverage for
liability
primary function of insurance
maintain existing level of wealth
an umbrella policy is designed to cover
major personal liability suits
a deductible is an amount
not paid by the insurance company
the additional living expenses component of a homeowner's policy is designed to
pay for temporary housing while your home is repaired from covered damage
the factor that will not reduce your insurance rate is
paying all speeding tickets promptly
to cover additional personal property not adequately covered by your homeowner's policy, you should take out a(n) ________ policy
personal articles floater
insurance protects you against
potential financial losses or liability that result from unexpected events
the 25 in 50/100/25 refers to _____ coverage
property damage liability
having adequate amounts of auto and homeowner's insurance affects your financial plan by
protecting your net worth and making it larger in the future
to significantly reduce your automobile insurance premiums and still have adequate coverage, you should
raise the deductibles on comprehensive and collision
in general, insurance companies generate their revenues from
receiving payments for policies, investing the proceeds of premiums until the funds are needed to cover losses
lessening your exposure to an illness by getting periodic health checkups is an example of
reducing risks
if you have a poor driving record, , you may be forced to do all of the following except
refrain from filing a claim until your driving record has improved
independent insurance agents
represent many different insurance companies
which of the following statements regarding auto insurance is not true
ten percent of every dollar of auto insurance premiums is used to cover lawsuit costs
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.
insurance is not a good option for managing risk when
the probability of loss is very small
not covered in a standard homeowner's policy
the river you live near overflows its bank and washes your house away
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.
decision to obtain insurance should be determined by
weighing its costs and benefits.
the comprehensive or collision premium of a Rolls-Royce in relationship to a Chevy
will be higher because a Rolls-Royce costs more than a Chevy.
if you have an accident resulting in $2,000 damage to your car and have $500 deductible collision coverage, which of the following statements is true?
you will pay the first $500 and your insurance company will pay $1,500.
events that are typically not covered by your homeowner's insurance include all of the following except
explosion of frozen pipes
homeowners insurance premiums are heavily influenced by all of the following except
number of children who live in the home
