Personal Finance Chapter 8 Assessment

Cheyenne has a home insured for $300,000. It would cost $320,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70% of the home's value, how much of her household belongings would be covered

$210,000

Last month some of your friends were riding in a car together and were injured in an accident. Their total injuries were as follows: Brenda $85,000 Raquel $125,000 Louis $40,000 Coverage was 100/300/50. What was the total medical coverage in this accident?

$225,000

Which of the following questions should one ask when developing a risk management plan?

-What do I need to insure? -How much should I insure something for? -What kind of insurance should i buy? -Whom should I buy insurance from? ALL OF THESE QUESTIONS SHOULD BE ASKED WHEN DEVELOPING A RISK MANAGEMENT PLAN

Tom wanted to receive as many discounts on his home insurance as possible. Which of the following would NOT provide a discount

-the existence of a smoke detector in his home -having a fire extinguisher in his kitchen -installing deadbolt locks on his doors -the existence of an alarm system ALL OF THESE SHOULD RESULT IN A DISCOUNT FOR TOM

Which of the following is the type of motor vehicle insurance available to drivers

-wage loss insurance -towing and emergency road service coverage -rental reimbursement coverage ALL OF THESE MAY BE AVAILABLE TO DRIVERS

Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her:

Comprehensive physical damage coverage

Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his

Comprehensive physical damage coverage

Which of the following is NOT correct about renter's insurance

Renter's insurance covers the building and other structures on the site

If you have a loss due to a flood

You must have already purchased special coverage if you live in an area that has frequent floods in order to be covered

An individual who purchases an insurance policy is called

a policyholder

Homeowner's insurance typically covers all of the following except

automobiles

Barbara left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The skateboard was a

hazard

The best place to keep a household inventory is

in a safe deposit box

The main goal when setting insurance goals is to

minimize personal, property, and liability risks

The failure to take ordinary or reasonable care to prevent accidents from happening is called:

negligence

Which of the following is NOT one of the commonly used general risk management techniues

risk maximization

Liability is defined as

the legal responsibility for the financial cost of another person's losses or injuries

Sandra is contacting several insurance companies to compare coverage for her home. Which of the following should NOT affect her premium

the location of her employer

What is the fee that a policyholder pays when an insurance company agrees to take on the risk

the premium

Various states are trying to reduce the time and cost of setting vehicle injury cases. One alternative is

using the no-fault system