Test 3 (7-9)
Barbara left a skateboard on her front steps. A windstorm then swept the skateboard up and through her window. The windstorm is a
Peril
Which of the following is an advantage of renting?
Renters have fewer responsibilities than homeowners
If you choose to wear your seatbelt, you are using
Risk reduction
An example of a hazard is defective house wiring
True
If you live in a city, you should expect to pay a higher premium for your auto insurance than someone who lives in a rural area
True
A disadvantage of home ownership is the deductibility of mortgage interest and real estate tax payments.
False
A household inventory should be stored in a home office.
False
A landlord is responsible for paying renter's insurance
False
Caroline was found liable in an accident. This was probably not due to negligence on her part.
False
Collision insurance covers your vehicle against risks such as falling objects and hail
False
One way to keep auto insurance rates down is to insure each vehicle you own with a different insurer.
False
When interest rates are high and the demand for homes is low, prices of homes will likely be at a premium
False
A homeowner's house should be insured for the amount he or she originally paid for it.
Fasle
Which of the following is NOT a benefit of home ownership?
Maintenance and costs of repairs and home improvements
Sally was driving her own car and collided with a pick-up truck. Sally sustained $150,000 in injuries and her passenger sustained $1,000 in injuries. If her coverage was 100/300/50, what are the total medical expenses the insurance company would pay for this accident?
$101,000
What should a home buyer consider when evaluating a house?
All of these should be evaluated
Medical payments coverage applies to medical expenses of
Anyone in your vehicle, including you
When Nancy buys her house, the mortgage company will probably conduct a (n) _______.
Appraisal
Sammy was driving on the highway and drove over a piece of metal that was on the highway. The metal punctured her gas tank. This damage would be covered under her
Collision
Al 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
Comprehensive physical damage
Madeline wants to purchase a larger house. However, she had not yet sold her current home. She may want to include a (n) ________ in her offer.
Contingency clause
Which of the following is a form of housing in which the units are owned by a nonprofit organization?
Cooperative housing
Frank and Diane wanted to buy a house. Which of the following do they need before they purchase a house?
Down payment
Which of the following is a disadvantage of renting?
Tenants cannot take tax deductions for mortgage interest and property taxes
Which of the following is NOT correct?
Traditional financial guidelines suggest that your home should cost about 5 times your annual income
Robby fell on a piece of ice on Peter's front steps and broke his arm. This is an example of a liability.
True
If you have a loss due to a flood
You need to have purchased special coverage if you live in an area that has frequent floods in order to be covered
