Question 1

Which of the following is likely to increase your car insurance premium? I.You live in a rural area.
II) You are over 70.
III) You usually carry several passengers.

Accepted Answer

A)   I and II,only
B)   II and III,only
C)   I and III,only
D)   I,II and III
E)   I onlyF) A) and B)
G) A) and C)

Question 2

The purpose of minimum insurance legislation is to

Accepted Answer

A)   risk of injury or death.
B)   possibility of damage,destruction or theft.
C)   third party liability.
D)   A and B are correct.
E)   A,B and C are correct.F) B) and C)
G) A) and E)

Question 3

Increased liability insurance is available with an umbrella policy.

Accepted Answer

A) True 
 B)False  True

Question 4

The additional living expenses component of a home insurance policy is designed to

Accepted Answer

A)   pay for temporary housing while your home is repaired.
B)   cover damage to property while away from home.
C)   reimburse a homeowner for damage done by a visitor.
D)   pay for medical expenses of people injured on your property.
E)   pay for repairs caused by fire or other hazards.F) C) and D)
G) None of the above

Question 5

Personal belongings of a high value can be protected with a personal articles endorsement.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following are not covered by tenant's insurance?

Accepted Answer

A)   medical expenses for injuries to visitors
B)   fire damage of the building's roof
C)   additional living expenses
D)   accidental damage to the property of others
E)   cost of legal action due to personal liabilityF) C) and E)
G) D) and E)

Question 7

Peril is defined as

Accepted Answer

A)   the refusal by an insurance company to pay for the covered loss.
B)   the cause of risk.
C)   the cause of a possible loss.
D)   an uncertainty as to loss.
E)   riskF) A) and B)
G) B) and D)

Question 8

Personal property refers to building and other structures covered by homeowner's insurance.

Accepted Answer

A) True 
 B)False  False

Question 9

While cleaning your home,a worker damages some furniture.You take action against the worker's employer to cover the cost of the damage.This is an example of a(n) ____________ liability.

Accepted Answer

A)   umbrella
B)   assigned
C)   common situation
D)   peril
E)   vicariousF) None of the above
G) A) and B)

Question 10

The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

Accepted Answer

A)   replacement value
B)   actual cash value
C)   umbrella
D)   endorsement
E)   personal articles endorsementF) B) and C)
G) None of the above

Question 11

A system that allows insurance companies to provide coverage to several individuals with poor driving records is referred to as

Accepted Answer

A)   no-fault insurance.
B)   an assigned risk pool.
C)   premium discounts.
D)   comprehensive coverage.
E)   collision coverage.F) A) and B)
G) C) and D)

Question 12

Vicarious liability refers to the failure to take ordinary or reasonable care in a situation.

Accepted Answer

A) True 
 B)False

Question 13

High winds cause damage to trees,shrubs,and other plants.This insurance claim would be covered under the ____________ component of homeowner's insurance.

Accepted Answer

A)   additional living expenses
B)   personal property
C)   building and other structures
D)   personal liability
E)   property damageF) All of the above
G) None of the above

Question 14

The purpose of a high-risk pool is to

Accepted Answer

A)   provide insurance for poor drivers.
B)   reduce medical costs associated with auto accidents.
C)   take unsafe drivers off the road.
D)   reduce auto insurance premiums with state regulation.
E)   offer premium discounts to safe drivers.F) C) and D)
G) A) and B)

Question 15

The requirement for a minimum level of home insurance coverage refers to which of the following?

Accepted Answer

A)   Deductible
B)   Specified perils
C)   Endorsement
D)   Co-insurance
E)   BasicF) B) and C)
G) A) and B)

Question 16

No-fault insurance systems have consistently reduced the time and costs involved in settling claims.

Accepted Answer

A) True 
 B)False

Question 17

In the insurance industry,the term "peril" represents _______________.

Accepted Answer

A)   the chance that something may be lost
B)   the cause of the possible loss
C)   a habit that increases the likelihood of loss
D)   the actual loss experienced
E)   your record of past lossesF) All of the above
G) B) and E)

Question 18

Home insurance costs are affected most directly by

Accepted Answer

A)   the number of claims in an area.
B)   insurance agents' commission.
C)   government regulations that set premiums.
D)   processing costs of claims.
E)   the profits of the insurance company.F) A) and E)
G) B) and C)

Question 19

Which of the following factors is used to determine a person's driver classification?

Accepted Answer

A)   Age
B)   Type and age of vehicle
C)   Claims in your geographic area
D)   Insurance company claim processing costs
E)   State insurance premium regulationsF) D) and E)
G) All of the above

Question 20

The purpose of a household inventory is to

Accepted Answer

A)   reduce insurance costs.
B)   lower the chance of negligence
C)   obtain personal property floater coverage.
D)   increase liability coverage.
E)   verify owned property.F) A) and B)
G) C) and E) E

Exam 8: Home and Automobile Insurance

Which of the following is likely to increase your car insurance premium? I.You live in a rural area. II) You are over 70. III) You usually carry several passengers.

Correct AnswerverifiedShow Answer

The purpose of minimum insurance legislation is to

Correct AnswerverifiedShow Answer

Increased liability insurance is available with an umbrella policy.

Correct AnswerverifiedTrue

The additional living expenses component of a home insurance policy is designed to

Correct AnswerverifiedShow Answer

Personal belongings of a high value can be protected with a personal articles endorsement.

Correct AnswerverifiedShow Answer

Which of the following are not covered by tenant's insurance?

Correct AnswerverifiedShow Answer

Peril is defined as

Correct AnswerverifiedShow Answer

Personal property refers to building and other structures covered by homeowner's insurance.

Correct AnswerverifiedFalse

While cleaning your home,a worker damages some furniture.You take action against the worker's employer to cover the cost of the damage.This is an example of a(n) ____________ liability.

Correct AnswerverifiedShow Answer

The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

Correct AnswerverifiedShow Answer

A system that allows insurance companies to provide coverage to several individuals with poor driving records is referred to as

Correct AnswerverifiedShow Answer

Vicarious liability refers to the failure to take ordinary or reasonable care in a situation.

Correct AnswerverifiedShow Answer

High winds cause damage to trees,shrubs,and other plants.This insurance claim would be covered under the ____________ component of homeowner's insurance.

Correct AnswerverifiedShow Answer

The purpose of a high-risk pool is to

Correct AnswerverifiedShow Answer

The requirement for a minimum level of home insurance coverage refers to which of the following?

Correct AnswerverifiedShow Answer

No-fault insurance systems have consistently reduced the time and costs involved in settling claims.

Correct AnswerverifiedShow Answer

In the insurance industry,the term "peril" represents _______________.

Correct AnswerverifiedShow Answer

Home insurance costs are affected most directly by

Correct AnswerverifiedShow Answer

Which of the following factors is used to determine a person's driver classification?

Correct AnswerverifiedShow Answer

The purpose of a household inventory is to

Correct AnswerverifiedE

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