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