Finance - Chapter 10 Questions
Which of the following risks are covered by homeowner's insurance?
- coverage for the financial risks associated with injuries to others. - coverage for your place of residence. - coverage for the financial risks of damage to personal property.
Which of the following risks are covered by homeowner's insurance?
- coverage for your place of residence - coverage for the financial risks of damage to personal property - coverage for the financial risks associated with injuries to others
Most of the money automobile insurance companies pay in claims goes for:
- legal expenses - medical expenses - other costs that arise when someone is injured
The main types of risks related to a home and an automobile are:
- your responsibility for injuries to others - damage or loss to your property - your responsibility for damage to the property of others
Which of the following best defines homeowner's insurance?
Coverage for your residence and its financial risks.
True or False: Increasing your deductibles will increase your premiums for your homeowner's policy.
False
True or False: Insurance for your home should cover the amount you paid for the home.
False
True or False: The amount you can recover with collision insurance is limited to the purchase price of your vehicle.
False
True or False: The main types of risks related to a home and an automobile are property damage and loss of income due to premature death.
False
The protection against possible loss that gives you peace of mind is called ______
Insurance
True or False: Comparison shopping can usually help to lower the premiums on your homeowner's insurance policy.
True
True or False: Completing driver training and maintaining a safe driving record will help reduce your automobile insurance premiums.
True
True or False: Lending institutions require home mortgage borrowers to have home insurance.
True
True or False: Physical damage to a property is caused by hazards such as fire, wind, water, and smoke.
True
True or False: Your driver classification is one of the main factors that affects the premium for your vehicle insurance.
True
Increasing your _________ lowers your premium.
deductible
Defective house wiring is an example of a(n) _____ that increases the chances of fire.
hazard
Banks require home mortgage borrowers to have ________ insurance.
homeowner's
_______ is the legal responsibility for the financial loss due to injuries to others or damage to property for which you are responsible.
liability
The goals of insurance include minimizing personal, _______, and liability risks.
property
The main factors that influence premiums for automobile insurance are:
vehicle type, rating territory, and driver classification
Which of the following are covered by renter's insurance?
- additional living expenses - personal liability - personal property
The four risk management methods include: risk _______, risk ______, risk ______, and risk ______.
- avoidance - reduction - assumption - shifting
Which of the following are general risk management techniques?
- avoidance - reduction - assumption
Which of the following financial losses can you insure against?
- loss of home or belongings - catastrophic illness - personal and property damage when driving
What are some ways of reducing premiums on automobile insurance?
- maintaining a safe driving record - completing driver training - comparison shopping for automobile insurance - installing security devices
The goals of insurance include:
- minimizing liability risks - minimizing personal risks - minimizing property risks
Which of the following are covered by a homeowner's policy?
- personal property - house - other structures
The coverage of HO-3 policies includes which of the following perils?
- smoke - theft - fire and lightning - freezing
The main bodily injury coverages are:
- uninsured motorist's protection - medical payments coverage - bodily injury liability
True or False: Your homeowner's insurance covers damage to your home, other structures on your property, and your automobile.
False
Wage loss insurance will reimburse you for:
any salary or income lost due to injury in an automobile accident
Hazards increase the likelihood of a(n) ______ through a peril.
loss
Liability is the legal responsibility for the financial cost of another person's financial _______.
loss
You shouldn't select a company based on ______ alone.
price
The purpose of a financial responsibility law is to force drivers to __________.
show their ability to cover the costs of damage or injury from automobile accidents.
A _______ is state legislation that requires drivers to prove their ability to cover the cost of damage or injury caused by an automobile accident.
Financial responsibility law
Most homeowner's policies cover many perils, but not:
Flood
The amount you can collect with collision insurance is limited to the actual _______ value of the automobile at the time of the accident.
cash
_____ damage to a property is caused by events such as fire, wind, water, and smoke.
physical
Insurance similar to homeowner's that is available for tenants is ______.
renter's insurance
Your insurance protection for your home should be based on the amount needed to ________ or repair your house and not the amount you originally paid for the home.
replace
Towing and emergency road service coverage pays for the cost of getting your vehicle to a ___________.
service station, but not for the cost of repairs
