Personal Finance Chapter 11
Comprehensive coverage insures you against: (Select the best answer below.) A. damages to your car that result from floods, theft, fire, hail, explosions, riots, vandalism, or various other events. B. all damages. C. damages to your car that result from accidents. D. costs of damage to your car resulting from an accident in which you are at fault.
A. damages to your car that result from floods, theft, fire, hail, explosions, riots, vandalism, or various other events.
Risk Management. What is risk? What is risk management? How does insurance fit into risk management? Risk is: (Select the best answer below.) A. exposure to events that can cause a financial loss. B. the acceptance of a financial loss. C. the avoidance of a financial loss. D. the value of a financial loss.
A. exposure to events that can cause a financial loss.
Homeowner's insurance premiums are normally paid on a: (Select the best answer below.) A. yearly basis or are included with your home mortgage payment. B. monthly basis or are included with your home mortgage payment. C. monthly basis or are included with your property tax payment. D. yearly basis or are included with your property tax payment.
A. yearly basis or are included with your home mortgage payment.
Personal Property Floater. What is a personal property floater? What are some common items homeowners add floaters to cover? A personal property floater: (Select the best answer below.) A. is a clause in an insurance policy that enables homeowners to add and remove covered items. B. is an extension of the homeowner's insurance policy. C. is included in all homeowner's insurance policies. D. is an agent that serves homeowner's in several neighboring cities.
B. is an extension of the homeowner's insurance policy.
of Insurance. What is the purpose of insurance? What is meant by the term liability? How can individuals benefit from insurance? Insurance allows you to: (Select the best answer below.) A. avoid liability. B. maintain your existing level of wealth if there are unexpected events. C. increase your wealth. D. invest your financial assets for future earnings.
B. maintain your existing level of wealth if there are unexpected events.
Minimum limits of liability are: (Select the best answer below.) A. suitable for all drivers since they would cover the liability in many accidents. B. not suitable for all drivers since they would not cover the liability in many accidents. C. recommended to most drivers. D. suitable for most drivers since they would cover most of the liability in many accidents.
B. not suitable for all drivers since they would not cover the liability in many accidents.
Liability is: (Select the best answer below.) A. an avoidable expense of owning an asset. B. the responsibility for damages. C. the benefit of collecting on an insurance policy. D. the result of collecting on an insurance policy.
B. the responsibility for damages.
Some common items homeowners add floaters to cover are: (Select the best answer below.) A. expensive computer equipment, jewelry, and all kitchen appliances. B. jewelry and any items with sentimental value. C. expensive computer equipment and jewelry. D. any computer equipment and furniture.
C. expensive computer equipment and jewelry.
Homeowner's insurance provides insurance in the event of : (Select the best answer below.) A. death. B. loss of asset value. C. property damage. D. a car accident.
C. property damage.
Policy Limits. What do policy limits of 25/50/25 mean? Do you think the minimum amounts of liability insurance required by your state are suitable for all drivers? Explain your answer. Policy limits of 25/50/25 means: (Select the best answer below.) A. $25,000 for all bodily injury (for all persons combined); $50,000 for bodily injury for each person injured in an accident you caused; and $25,000 for property damage (to the car or other property). B. $25,000 for property damage (to the car or other property); $50,000 for all bodily injury (for all persons combined); and $25,000 for bodily injury for each person injured in an accident you caused. C. $25,000 for bodily injury for each person injured in an accident you caused; $50,000 for property damage (to the car or other property); and $25,000 for all bodily injury (for all persons combined). D. $25,000 for bodily injury for each person injured in an accident you caused; $50,000 for all bodily injury (for all persons combined); and $25,000 for property damage (to the car or other property).
D. $25,000 for bodily injury for each person injured in an accident you caused; $50,000 for all bodily injury (for all persons combined); and $25,000 for property damage (to the car or other property).
You should consider insurance if: (Select the best answer below.) A. you do not wish to be exposed to a financial loss as a result of the risk. B. you cannot avoid the risk. C. you cannot reduce the risk. D. All of the above.
D. All of the above.
This type of coverage may be required by: (Select the best answer below.) A. schools. B. insurance companies. C. regulators. D. car loan providers.
D. car loan providers.
The first step in risk management is to: (Select the best answer below.) A. decide whether to protect against risk. B. select the type of insurance you need. C. identify who to buy insurance from. D. recognize the risks to which you are exposed.
D. recognize the risks to which you are exposed.
Homeowner's insurance provides insurance in the event of : (Select the best answer below.) A. death. B. civil lawsuits. C. appliance repair. D. theft.
D. theft.
Collision and comprehensive coverage are _____ in _____ state.
optional most