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