Question 1

Which of the following statements regarding auto insurance is not true?

Accepted Answer

A)   No-fault insurance programs do not hold a specific driver liable for causing an accident.
B)   Exaggerated personal injury claims result in additional insurance expenses of about $100 million per year.
C)   One reason for high auto insurance premiums is auto insurance fraud.
D)   If you drive a car, you need to have auto insurance.

Question 2

It is possible that some of the expenses you incurred in an accident are not covered by your policy.

Accepted Answer

A) True 
 B)False

Question 3

Since insurance is a regulated industry,the rates for automobile policies are relatively the same among different companies operating in a state.

Accepted Answer

A) True 
 B)False

Question 4

A replacement cost rider is important to add to your homeowner's policy because

Accepted Answer

A)   it replaces property that breaks or otherwise stops working.
B)   in the event of a loss, your property is valued at the cost of replacement regardless of age or depreciation.
C)   it will pay you depreciated value plus inflation for your property loss.
D)   it is not important and is an expensive but low value rider.

Question 5

Given the large number of uninsured drivers,uninsured motorist coverage is needed.

Accepted Answer

A) True 
 B)False

Question 6

You are in an auto accident with someone who does not have insurance.You should do all of the following except

Accepted Answer

A)   take pictures.
B)   call the police.
C)   file a claim.
D)   try to settle the claim without involving the police or your insurance company.

Question 7

Your home insurance provides for replacement value for personal property losses.Your china hutch was vandalized and completely destroyed.Your hutch cost $400 four years ago,but a new one will cost you $600.How much will the insurance company pay?

Accepted Answer

A)   $400
B)   $200
C)   $600
D)   Nothing, vandalism is not covered.

Question 8

List four ways to reduce your auto insurance premiums.

Accepted Answer

Any four of the following:
∙ Buy a less ...

Question 9

Which of the following is covered by renter's insurance?

Accepted Answer

A)   Damage to a stove that the landlord purchased before you moved in.
B)   Your dog bites the tenant who lives across the hall from you.
C)   A collapsed roof.
D)   Stereo system stolen from the car you are leasing.

Question 10

Use the following two columns of items to answer the matching questions below:
-collision coverage

Accepted Answer

A)  requires individuals who drive cars to purchase a minimum amount of liability insurance
B)  pays for injuries to you or people in your car in an accident where you (the driver)  are at fault
C)  a set dollar amount that you are responsible for paying before any coverage is provided by your insurer
D)  covers damage to your car as a result of theft, fire, vandalism, or various other events
E)  vehicle insurance to cover various injuries, your property, and the property of othersF) covers damage to your car when you are at fault in an accident

Question 11

Before you increase your homeowner's insurance deductible you should evaluate

Accepted Answer

A)   if you are going to have a claim in the next year or two.
B)   if you can afford to "self insure" the deductible amount in the event of a loss claim.
C)   your auto insurance liability levels and liability deductible.
D)   Stop; it is never a good idea to increase your deductible.

Question 12

Once drivers are labeled as "high risk," they will not be able to get automobile insurance at any price.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not true regarding medical payments coverage?

Accepted Answer

A)   It covers both family and nonfamily members.
B)   It is not recommended or needed if you have health insurance.
C)   It may even cover funeral expenses.
D)   Insurance professionals recommend coverage of about $10,000 per person.

Question 14

A common form of auto insurance fraud is

Accepted Answer

A)   faking an accident or injury.
B)   stealing merchandise from a car.
C)   driving without a valid license.
D)   None of the above.

Question 15

You can use the Internet to obtain

Accepted Answer

A)   estimates on auto insurance rates.
B)   new car prices.
C)   blue book values on used vehicles.
D)   All of the above.

Question 16

Under a cash value policy,the loss of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

Accepted Answer

A)   $600.
B)   $900.
C)   $240.
D)   $360.

Question 17

Insurance is not a good option for managing risk when

Accepted Answer

A)   the probability of loss is very small and the expected loss is small.
B)   the benefits outweigh the costs.
C)   you want to protect your existing and future net worth.
D)   there is a likelihood that an event will cause a large financial loss.

Question 18

Of the following statements,which is not true regarding no-fault insurance?

Accepted Answer

A)   Not all states have no-fault insurance.
B)   It helps determine which driver is at fault and which has no fault.
C)   It is intended to avoid costly legal battles.
D)   It does not prevent insurance fraud.

Question 19

Which of the following is true of renter's insurance?

Accepted Answer

A)   You only need to buy it if you have possessions of considerable value.
B)   It will not cover your liability if a picture falls off the wall and injures a guest in your apartment.
C)   Your renter's insurance covers only your own property, not the property of your landlord.
D)   Because premiums are small, most people who need it have renter's insurance.

Question 20

A personal scheduled property floater should be added to your homeowner's insurance policy if

Accepted Answer

A)   you or your spouse has expensive jewelry or watches
B)   you have valuable original art in your home
C)   you own an antique car and keep it in your garage
D)   Both A and B are correct

Exam 11: Auto and Homeowners Insurance

A common form of auto insurance fraud is

Correct AnswerverifiedShow Answer

Given the large number of uninsured drivers,uninsured motorist coverage is needed.

Correct AnswerverifiedShow Answer

Under a cash value policy,the loss of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

Correct AnswerverifiedShow Answer

You can use the Internet to obtain

Correct AnswerverifiedShow Answer

List four ways to reduce your auto insurance premiums.

Correct AnswerverifiedAny four of the following:∙ Buy a less ...View AnswerShow Answer

Which of the following is not true regarding medical payments coverage?

Correct AnswerverifiedShow Answer

Insurance is not a good option for managing risk when

Correct AnswerverifiedShow Answer

A personal scheduled property floater should be added to your homeowner's insurance policy if

Correct AnswerverifiedShow Answer

Once drivers are labeled as "high risk," they will not be able to get automobile insurance at any price.

Correct AnswerverifiedShow Answer

Your home insurance provides for replacement value for personal property losses.Your china hutch was vandalized and completely destroyed.Your hutch cost $400 four years ago,but a new one will cost you $600.How much will the insurance company pay?

Correct AnswerverifiedShow Answer

A replacement cost rider is important to add to your homeowner's policy because

Correct AnswerverifiedShow Answer

You are in an auto accident with someone who does not have insurance.You should do all of the following except

Correct AnswerverifiedShow Answer

Which of the following is true of renter's insurance?

Correct AnswerverifiedShow Answer

Since insurance is a regulated industry,the rates for automobile policies are relatively the same among different companies operating in a state.

Correct AnswerverifiedShow Answer

It is possible that some of the expenses you incurred in an accident are not covered by your policy.

Correct AnswerverifiedShow Answer

Before you increase your homeowner's insurance deductible you should evaluate

Correct AnswerverifiedShow Answer

Which of the following statements regarding auto insurance is not true?

Correct AnswerverifiedShow Answer

Use the following two columns of items to answer the matching questions below: -collision coverage

Correct AnswerverifiedShow Answer

Which of the following is covered by renter's insurance?

Correct AnswerverifiedShow Answer

Of the following statements,which is not true regarding no-fault insurance?

Correct AnswerverifiedShow Answer

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∙ Buy a less ...
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