Chapter 8 Questions
Cheyenne has a home insured for $300,000. It would cost $320,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70% of value, how much of her household belongings would be covered?
$210,000
Last month some of your friends were injured in an accident. Their total injuries were as follows: • Brenda $ 85,000 • Raquel $ 125,000 • Louis $ 40,000 Coverage was 100/300/50. What was the total medical coverage in this accident?
$225,000
All of the following are acceptable types of documentation for a household inventory except
A listing of items and their details in your memory.
Amber had permission from Bradley to borrow his car to run some errands. Unfortunately, while Amber was driving, she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist. Based on her experience, which of the following would be true?
Amber's insurance policy should cover any property damage claims since she was driving Bradley's car with his permission.
Medical payments coverage applies to medical expenses of
Anyone who is injured in your vehicle, including you.
Homeowner's insurance covers all of the following except
Automobiles.
Home insurance policies include coverage for all of the following except
Business property.
Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his
Comprehensive physical damage coverage.
Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her
Comprehensive physical damage coverage.
Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his
Comprehensive physical damage coverage.
Barbara left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The skateboard was a
Hazard
The main goal when setting insurance goals is to
Minimize personal, property, and liability risks.
The failure to take ordinary or reasonable care to prevent accidents from happening is called
Negligence
Barbara left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The fact that Barbara didn't put away the skateboard is called
Negligence.
Paul was driving his kids to a piano lesson in a 2005 minivan. While driving, he was hit by an uninsured motorist. Although Paul and his kids had only minor injuries, their vehicle was totaled. Based on this information, which of the following is correct?
Paul's uninsured motorist protection should cover the cost of injuries for Paul and his kids.
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
Insurance that covers valuable items, such as an expensive musical instrument, is called
Personal property floater.
Personal property insurance covers
Personal property items up to 55-75% of the insured value of the home
What is the fee that a policyholder pays when an insurance company agrees to take on the risk?
Premium
Madeline had a severe allergy attack and crashed her car into a telephone pole while sneezing. The damage to the telephone pole would be covered under Madeline's
Property damage liability coverage.
Patrick has an old car and wants to keep his insurance costs down, but he wants coverage in case he damages the property of others, including street signs and telephone poles. In order to minimize the financial impact of an accident he may cause, he should, at a minimum, carry which type of insurance?
Property damage liability coverage.
Which of the following is NOT correct about renter's insurance?
Renter's insurance covers the building and other structures on the site.
If you choose to take responsibility for the negative results of a risk, you are using
Risk assumption.
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.
Which of the following is NOT correct?
The cost and number of claims you have should not affect your premium.
Liability is defined as
The legal responsibility for the financial cost of another person's losses or injuries.
Sandra is contacting several insurance companies to compare coverage for her home. Which of the following should NOT affect her premium?
The location of her employer.
Homeowner's insurance covers all of the following except
Theft of jewelry valued at $25,000.
A policy that supplements your basic personal liability coverage is called a(n)
Umbrella policy.
Various states are trying to reduce the time and cost of settling vehicle injury cases. One alternative is
Using the no-fault system.
