Chapter 8
an individual who purchases an insurance policy is called
a policyholder
which of the following questions should one ask when developing a risk management plan
all of these are questions that should be asked
homeowner's insurance covers all of the following EXCEPT
automobiles
Sam's house should be insured for the amount that he originally paid for it
false
a household inventory should be stored in a home office
false
it is illegal to use a credit score to determine the premium to charge an individual
false
barbara left a skateboard on her front steps. her neighbor tripped on the skateboard and was injured. the skateboard was a
hazard
yogi is applying for insurance for his new home. which of the following is correct
he should base the amount of insurance on the price to rebuild or repair it
the best place to keep a household inventory is
in a safe deposit box
Cindy was contacted by her home insurance agent to discuss ways to decrease her premium. which of the following should NOT reduce her premium
increasing the amount of coverage
which of the following should reduce your auto insurance premium
maintain good grades in college
barbara left a skateboard on her front steps. her neighbor tripped on the skateboard and was injured. the fact that barbara did not put the skateboard away is called?
negligence
the failure to take ordinary or reasonable care to prevent accidents from happening is called
negligence
anything that may possibly cause a loss is called a
peril
barbara left a skateboard on her front steps. a windstorm swept the skateboard up and through her window. the windstorm was a
peril
what is the fee that a policyholder pays when an insurance company agrees to take on the risk
premium
if you choose to avoid the risk of a traffic accident by not driving to work, you are using
risk avoidance
if you choose to wear your seat belt, you are using
risk reduction
if you choose to insure your home or your vehicle, you are using
risk shifting
sandra is contacting several insurance companies to compare coverage for her home. which of the following should NOT affect her premium
the location of your employer
Every state in the united states has a law requiring people to carry motor vehicle insurance
true
a homeowner's insurance policy provides coverage for additional living expenses so you can stay somewhere else if a fire damages your home
true
an insurance claim is a request for payment to cover financial losses
true
if you live in a large city, you should expect to pay a higher premium for auto insurance than someone who lives in a rural area
true
insurance is protection against possible loss
true
motor vehicle insurance falls into two categories: protection for bodily injury and protection for property damage
true
one of the four questions that should be asked when developing a risk management plan is "what do I need to insure"
true
risk management is an organized plan for protecting yourself, your family, and your property
true
