FIN 300-Chapter 8

In general, young drivers under __ and those over __, have more frequent and sever accidents

25; 70

By contacting several insurance agents to compare premiums, you can save as much as or more than ___ on insurance costs A. 75% B. 30% C. 60% D. 50%

30%

In the past, most homeowners policies contained a provision requiring that the building be insured for at least ____ of the replacement value A. 60% B. 80% C. 50% D. 40%

80%

____ insurance usually covers friends, guests, and babysitters

Liability

____ is legal responsibility for the financial cost of another persons losses or injuries

Liability

_____ is the failure to take ordinary or reasonable care to prevent accidents from happening

Negligence

____ risks included losses caused by perils such as fire or theft and hazards

Property

____ is the chance of loss or injury

Risk

____ is setting up a special fund, perhaps from savings, to cover the cost of a loss

Self-insurance

____ type, rating ____, and driver ____ are the three main factors that influence vehicle insurance premiums

Vehicle; territory; classification

Under the ____ cash value method, the payment received is based on the replacement cost of an item minus depreciation

actual

Not purchasing insurance for whatever reason, such as not buying flood insurance on a house is risk _____

assumption

Deductibles are a combination of risk ____ and risk ____

assumption; shifting

Personal belongings of students in ____ housing are usually covered (up to a certain limit) on the home insurance policy of their parents

college

Most homeowners policy will cover personal _____ data up to a certain limit

computer

Medical payments ____ is insurance that applies to the medical expenses of anyone who is injured in your vehicle, including you

coverage

Another risk for property owners is loss or damage caused by ____ behavior such as robbery, burglary, vandalism, and arson

criminal

The financial impact of _____ includes loss of income, loss of services, and final expenses

death

A _____ is the set amount that the policy holder must pay per loss on an insurance policy

deductible

The financial impact of ____ includes the loss of one income, loss of services, and increased expenses

disability

Steps for creating a personal insurance program: 1. Set insurance ____ 2. Develop a ___ to reach your goals 3. Put your plan into _____ 4. Check your ____

goals; plan; action; results

The main types of bodily injury coverages are bodily injury _____, medical ____, and _____ motorist protection

liability; payments; uninsured

Your insurance should be based on the amount of money you would need to rebuild or repair it, not the amount you ____ for it

paid

A person joins a risk-sharing group by purchasing a contract known as a _____

policy

Shifting of risk is done through the purchase of an insurance ____ from an insurance company

policy

An insurance policy requires the payment of an annual ____ as part of a contract to cover the risk

premium

Automobile insurance covers _____ damage and personal damage (bodily injury) caused by the policyholders car

property

Personal risks, property risks, and liability risks are types of ____, or insurable risks

pure

Examples of risk ____ actions include wearing seatbelts in a car and installing smoke alarms

reduction

The financial impact of ____ includes decreased income and unplanned living expenses

retirement

Not eating a high fat diet and exercising lowers the chance of illnesses, this is an example of A. risk shifting B. risk reduction C. risk management D. risk avoidance

risk reduction

Fewer accidents and less vandalism occur in ____ areas than in urban cities

rural

Strategies for reducing the financial cost of property loss include ____ systems, property repair and upkeep, ______ insurance, _____ insurance, and flood insurance

security; automobile; homeowners

An insurance company or insurer is a risk ____ business that agrees to pay for losses that may happen to someone it insures

sharing

The coverage that provides an insured the financial protection when another driver has insurance but not enough to pay for the injuries he or she has caused is known as _____ motorist protection

underinsured

Insurance is protection against possible ____ loss, and provides protection against many ____

financial; risks

The cost o mobile home insurance is most heavily affected by home's ____ and by the method used to attach the housing unit to the _____

location; ground

The main types of risks related to your home and your car is the risk of damage to or _____ of your property, and your responsibility for ____ to other people or damage to their property

loss; injuries

Risk ____ is a long-range financial planning process that helps reduce financial losses caused by destructive events

management

The financial impact of ____ loss includes catastrophic storm damage to property and the repair or replacement cost of theft

property

Completing driver training and maintaining a safe driving record will help ____ your automobile insurance premiums

reduce

An insurer cannot ____ to issue you a home or auto insurance policy solely based on your credit report

refuse

Under the _____ value method for settling claims, you receive the full cost of repairing or replacing an item and depreciation is not considered

replacement

Every state in the US has a financial ____ law that requires drivers to prove that they can pay for damage or injury caused by an automobile accident

responsibility

Starting a small business, buying risky stocks, going to the casinos are all examples of: A. speculative risks B. reasonable risks C. insurable risks D. business risks

speculative risks

_____ insurance for your car covers physical damage to your car from such risks as fire, theft, falling objects, and hitting an animal

Comprehensive

_____ is NOT covered on basic rental policies

Flood

The coverage of _____ policies include the following perils: theft, fire and lightening, windstorms, and smoke; they *exclude* floods, war, and nuclear accidents

HO-3

_____ is anything that increases the likelihood of loss through some peril

Hazard

_____ risks involve losses caused by negligence that leads to injury or property damage

Liability

_____ insurance is a financial strategy to deal with the financial impact resulting from the loss of one income on the death of spouse

Life

____ is anything that may possibly cause a loss

Peril

____ risks involve loss of income or life due to illness, disability, old age, or unemployment

Personal

____ damage for property owners include damage caused by perils such as fire, wind, water, and smoke

Physical

If a fire or other event damages your home, _____ living expense coverage pays fro you to stay somewhere else while your home is being repaired

additional

Expensive replacement parts and ____ repairs due to body style contribute to higher automobile premium rates

complicated

A personal property ____ is additional property insurance that covers the damage or loss of a specific item of high value

floater

In a _____ system, drivers involved in accidents collect medical expenses, lost wages, and related injury costs from their own insurance companies

no-fault

Property damage liability is motor vehicle insurance that applies when you damage the property of ____, in addition, it protects you when you're driving another persons vehicle with the owners ____

others; permission

People buy insurance policies against a wide range of ____

perils

An assigned risk _____ includes all the people who can't get motor vehicle insurance

pool

One of the key goals when planning insurance is to ____ possible loss of income

reduce

Towing and emergency road service coverage pays for the cost of getting your vehicle to a _____ station, but NOT for the cost of repairs

service

Personal property coverage typically limits the payout for the _____ of certain items, such as $5000 for jewelry

theft

An ____ policy, also called a *personal catastrophe* policy, supplements your basic personal liability coverage; this added protection covers you for all kinds of personal injury claims

umbrella

The coverage of tenants form HO-4 covers damages to personal property from all of the following perils EXCEPT: A. war B. vandalism C. malicious mischief D. theft

war

The amount you can collect with collision insurance is limited to the actual ____ value of the automobile at the time of the accident

cash

The _____ form (HO-5) expands the coverage of the special form (HO-3)

comprehensive

Strategies for reducing the financial impact of _____ include savings, investments, practicing safety precautions, and disability insurance

disability

An ____ is an addition to coverage for a home owners policy, such as earthquake insurance

endorsement

One of the strategies available for reducing the financial impact of retirement is to develop ____ and skills that can pay off during retirement

hobbies

A _____ insurance policy provides coverage for the building in which you live and any other structures on the property, additional living expenses, personal property, personal liability and related coverage, and specialized coverage

homeowners

The financial impact of ____ includes loss of one income and catastrophic hospital expenses

illness

The strategies for reducing the financial impact of ____ include practicing health-enhancing behaviors and purchasing health insurance

illness

Examples of negligence actions include _____ supervising children in a swimming pool, and failing to ____ large items from a stairway

improperly; remove

As construction costs rise, you should ____ the amount of insurance coverage

increase

Homeowners insurance covers your household belongs, such as furniture, appliances, and clothing up to 55, 70, or 75% of the ____ value of the home

insured

A household ____ is a list or other documentation of personal belongings, with purchase dates and cost information

inventory

The price for insuring your home and your car should be thought of as an _____ for protecting your resources

investment

Most of the money that motor vehicle insurance companies pay out in claims goes for ___ expenses, ____ expenses, and other costs that arise when someone is injured

legal; medical

You can be held ____ responsible for another persons injury or damage even if it was not your fault

legally

Your personal insurance program should change along without your ____ and goals

needs

All of the following can be classified as criminal behavior, which can cause property losses, EXCEPT: A. negligence B. arson C. burglary D. vandalism

negligence

Not clearing ice from the front steps of your house is an example of ____ which is failure to take ordinary or reasonable care

negligence

The main influences on the ____ paid for home and property insurance include policy type, location of home, and type of structure

premium

A ____ risk is a risk that carries a chance of either loss or gain and are NOT insurable

speculative

Your household inventory can include: A. recollection of your friends B. notarized statements C. video recording or photos D. police reports

video recording or photos