Financial Literacy Chapter 22
A house's replacement value is $100,000, and it is insured for $150,000. If it is completely destroyed by a fire, the insurance company will pay.
$100,000
Eric owns a home valued at $200,000. His insurance policy has an 80 percent co-insurance clause. He has the property insured for $160,000. If his house incurs storm damage worth $20,000, how much will he be able to collect from the insurance company?
$200,000
You have a 400,000 homeowner's policy and your house has a market value of $150,000. After a fire, you find it will cost $200,000 to rebuild it . How much will you receive as a reimbursement.
$200,000
Sebastian's insurance agent tells him that he is going to receive a 15% premium discount on his auto insurance because of his good grades and successful completion of a driver's education class. Without the discount, the premiums would have been $700/year. What will be the annual cost of premiums with the discount?
$595
With an 80 percent coinsurance clause, a house valued at $100,000 must be insured for at least
$80,000
The is the cost of replacing an item regardless of its actual cash (market) value.
Replacement Value
In question #8, the $200,000 represents the value of the home.
Replacement
Generally, people insure the contents of their home for at least ______ the value of the building.
1/2
A building insured for $200,000 is likely to have contents covered for at least
100,000
To cover a very expensive piece jewelry, the insured would add
A Personal Property Floater
Every state has a(n) that consists of people who are unable to obtain auto insurance due to the high risk they present.
Assigned Risk Pool
A(n) is a dangerous place, condition, or object that is especially attractive to children.
Attractive Nuisance
A(n) clause requires policyholders to insure their building for a stated percentage of its replacement value in order to receive full reimbursement for a loss.
Co-Insurance
A(n) clause is a provision included in most property insurance policies that require policyholders to insure their building for a stated percentage of its replacement value in order to receive full reimbursement for a loss.
Coinsurance
This type of insurance protects your own car against damage from accidents or vehicle overturning.
Collision
Usually has a deductible clause
Collision & Comprehensive
Covers damage to the insured's car resulting from severe weather
Comprehensive
Covers risk of loss from theft of insured's vehicle.
Comprehensive
This type of insurance protects you from damage to your car from causes other than collision.
Comprehensive
Covers loss from fire to the insured's vehicle
Comprehensive Coverage
Covers repairs to the insured's car as a result of a falling rock
Comprehensive Coverage
A(n) is a written amendment to an insurance policy for an additional premium.
Endorsement
True or False: Earthquakes are covered under Homeowner's Insurance
False
True or False: Landlords can insure the property of their tenants as part of their liability policy.
False
This type of insurance protects property owners from property and liability risks.
Homeowners
A minor traffic ticket is called a(n)
Infraction
In question #8, what was the title of the person who came and determined the value of the destroyed property
Insurance Adjuster
Most states require all drivers to at least carry this kind of coverage.
Liability
Protects the insured against claims for property damage caused by the insured's car
Liability
This coverage is insurance to protect against claims for bodily injury to another person or damage to another person's property.
Liability
Covers the insured against claims for bodily injury to another person
Liability Coverage
Type of auto insurance required in most states
Liability Coverage
Coverages provided on a full-coverage policy
Liability Coverage Collision Coverage Comprehensive Coverage Personal Injury Protection Uninsured/Underinsured Motorist Coverage
In question #8, the $150,000 represents the value of the home.
Market
A(n) is any violation of the law committed by the driver of a vehicle while it is in motion.
Moving Violation
is auto insurance in which drivers receive reimbursement for their expenses from their own insurer, regardless of who caused the accident.
No-Fault Insurance
Buying a car with extra airbags and antilock brakes can reduce the cost of which type of auto insurance?
Personal Injury Protection
Pays for funeral costs of insured, regardless of fault
Personal Injury Protection
Pays for medical and hospital costs of the insured and his/her family
Personal Injury Protection
This is auto insurance that pays for medical, hospital, and funeral costs of the insured and his/her family and passengers, regardless of fault.
Personal Injury Protection
This type of insurance protects renters from property and liability risks.
Renters
An increased insurance premium you must pay because you caused an accident is called a(n)
Surcharge
True of False: A burglary is covered under Homeowner's Insurance
True
True or False: Coinsurance effectively prevents people from underinsuring their property.
True
True or False: Homeowners will be held liable for injuries caused by attractive nuisance.
True
True or False: Homowners insurance also covers trees, plants, and fences on the property.
True
True or False: Standard auto insurance policies cover theft of the vehicle.
True
Protects you as a pedestrian if you are hit by an uninsured vehicle
Uninsured/Underinsured Motorist Coverage
A person who is presumed to have permission to be on your property is a(n)
Uninvited Guest
If you are in an auto accident that is your fault and your insurance company has to pay claims,
You're premium will probably go up.
Serious traffic offenses that may incur fines as well as jail time are called
misdemeanors
In the above problem (#8), what is the term used to refer to the problem that exists. ($400,000 policy on a $150,000 home)
over insure
This coverage is auto insurance that pays for your injuries when the other driver is legally liable but unable to pay.
uninsured/underinsured motorist