Module 11

Why is it important to compare auto insurance premiums?

Different insurance companies, even in the same geographic area, can have premiums that vary as much as 100%.

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 the new home.

Factors that insurance companies consider when determining premiums for auto insurance include all of the following, except:

Household income

All of the following are characteristics of pure risks, except: Property risks Only a chance of loss and not the potential for gain. Liability risks Non-insurable Losses must be the result of accidents and unintentional.

Non-insurable

If you choose to insure your home or your vehicle, you are using

Risk shifting.

Peril is defined as:

The cause of a possible loss, such as accidents, fire, windstorm, robbery, disease, or death.

In split limit coverage, the second number represents:

The limit for claims that can be paid to all individuals involved in an accident where you are liable.

Timothy was driving his friend Nick to football practice. While driving, he was hit by a driver who had coverage of 100/300/50. Tim and Nick each suffered some physical injuries. Based on this information, which of the following is correct?

The policy would provide a maximum of $100,000 for each person who was injured, and no more than $300,000 for total injuries of all parties in the accident.

Which of the following is not a method discussed in the video as a way to deal with risk?

Risk Exchange

Assume your 10-year old home originally cost $300,000 and is expected to have a 50 year life. Unexpectedly, a fire totally destroys your home and the home is now worth $350,000. Under the actual cash value method, what will the insurance company pay you?

$280,000

Assume your 10-year old home originally cost $300,000. Unexpectedly, a fire totally destroys your home. Over the past 10 years, your home has increased in value by 20 percent and is now worth $360,000. Under the replacement value coverage, what will the insurance company pay you?

$360,000

Medical payments insurance provides medical benefits or the cost of health care to:

You and individuals injured in your automobile.

Uninsured and underinsured motorist's protection provides protection for you and your family against all of the following, except:

You are in an accident caused by a person with high premium auto insurance.

All of the following are situations that could cause your insurance premium to increase or decrease, except:

Your neighborhood has a Homeowner's Association.

Albert left his vehicle parked on the street in the front of his house when he went on vacation. While he was gone, his street flooded and his car was severely damaged. This damage would be covered under his

Comprehensive physical damage coverage.

Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his

Comprehensive physical damage coverage.

All of the following are actions that you can take to reduce your auto insurance premiums and qualify for discounts, except:

Keeping poor driving habits

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's protection should cover the cost of injuries for Paul and his kids.

Medical payments coverage applies to medical expenses of

Anyone who is injured in your vehicle, including you.

If you choose to wear your seatbelt, you are using

Risk reduction.