Question 1

Which form of homeowner's policy provides coverage for the most risks?

Accepted Answer

A)   Special
B)   Basic
C)   Broad
D)   Tenants
E)   Modified coverageF) C) and D)
G) B) and E)

Question 2

Home insurance costs are affected most directly by:

Accepted Answer

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

Question 3

What does the term subrogation mean as it relates to motor vehicle property damage coverage?

Accepted Answer

Subrogation is defined as the ...

Question 4

Kevin Brown rides his bicycle to work so that he doesn't have to worry about getting in a car accident. How is Kevin managing his risk?

Accepted Answer

A)   Avoidance
B)   Reduction
C)   Assumption
D)   Shifting
E)   CreationF) C) and D)
G) A) and B)

Question 5

Personal risks, property risks, and liability risks are types of ________ risk.

Accepted Answer

A)   speculative
B)   avoided
C)   assumed
D)   pure
E)   reducedF) B) and E)
G) A) and B)

Question 6

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) B) and C)
G) A) and B)

Question 7

Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?

Accepted Answer

A)   Personal property floater
B)   An endorsement
C)   Coinsurance clause
D)   Umbrella coverage
E)   Assigned risk clauseF) C) and E)
G) None of the above

Question 8

Which statement is not true about no-fault insurance systems?

Accepted Answer

A)   They are intended to reduce the time and cost associated with the settlement of automobile injury cases.
B)   The systems vary from state to state.
C)   Some states include property damage in the coverage.
D)   Some states set limits on medical expenses, lost wages, and other claim settlements.
E)   In recent years, all 50 states had some variation of the system.F) A) and E)
G) None of the above

Question 9

The uncertainties of direct and indirect losses to personal or real property due to fire, wind, accident, theft, etc., are called ____________ risks.

Accepted Answer

A)   personal
B)   business
C)   property
D)   liability
E)   speculativeF) B) and C)
G) None of the above

Question 10

Which one of the following coverages would pay for medical care for people who were injured in your automobile?

Accepted Answer

A)   Medical payments
B)   Bodily injury liability
C)   Collision
D)   Uninsured coverage
E)   Underinsured coverageF) B) and C)
G) A) and B)

Question 11

Defective house wiring is an example of a:

Accepted Answer

A)   hazard.
B)   peril.
C)   risk.
D)   speculation.
E)   planned danger.F) All of the above
G) B) and C)

Question 12

A system that requires each insurance company operating in a state to provide coverage to individuals who have been unable to obtain other insurance is referred to as:

Accepted Answer

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

Question 13

Georgette Valentine has expensive photography equipment for use in her hobby. Which one of the following types of coverage would pay for damage or theft of this equipment?

Accepted Answer

A)   Umbrella policy
B)   Personal liability
C)   Additional living expense coverage
D)   Personal property floater
E)   Coinsurance floaterF) All of the above
G) B) and D)

Question 14

Which one of the following would not be considered personal property by a homeowner's insurance policy?

Accepted Answer

A)   Furniture
B)   Jewelry
C)   Outside deck
D)   Computer lost while on vacation
E)   iPodF) A) and C)
G) B) and E)

Question 15

The legal responsibility for the financial cost of another person's losses or injuries is referred to as:

Accepted Answer

A)   theft.
B)   robbery.
C)   liability.
D)   assigned risk.
E)   collusion.F) B) and C)
G) None of the above

Question 16

The most common method of dealing with risk is:

Accepted Answer

A)   risk avoidance.
B)   risk reduction.
C)   risk shifting.
D)   risk assumption.
E)   None of theseF) B) and E)
G) A) and B)

Question 17

Another term for liability coverage that protects you from claims if a client holds you responsible for errors or you fail to perform as promised is:

Accepted Answer

A)   umbrella policy.
B)   personal property floater.
C)   errors and omissions.
D)   endorsement.
E)   self-insurance.F) B) and E)
G) A) and D)

Question 18

Possible losses due to negligence resulting in bodily harm or property damage to others are called ____________ risks.

Accepted Answer

A)   speculative
B)   liability
C)   property
D)   personal
E)   commercialF) A) and B)
G) None of the above

Question 19

Evan McWilliams accidentally collided with a car driven by Francis Sullivan. It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital. What part of Evan's automobile insurance policy would cover Francis's injuries?

Accepted Answer

A)   Bodily injury liability
B)   Medical payments coverage
C)   Property damage liability
D)   Collision
E)   Comprehensive physical damageF) All of the above
G) A) and C)

Question 20

What type of coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others?

Accepted Answer

A)   Medical payments
B)   Liability
C)   Floater
D)   Comprehensive
E)   Personal propertyF) B) and C)
G) C) and E)

Exam 10: Property and Motor Vehicle Insurance

Home insurance costs are affected most directly by:

Correct AnswerverifiedShow Answer

Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?

Correct AnswerverifiedShow Answer

Defective house wiring is an example of a:

Correct AnswerverifiedShow Answer

The most common method of dealing with risk is:

Correct AnswerverifiedShow Answer

Kevin Brown rides his bicycle to work so that he doesn't have to worry about getting in a car accident. How is Kevin managing his risk?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The legal responsibility for the financial cost of another person's losses or injuries is referred to as:

Correct AnswerverifiedShow Answer

Which form of homeowner's policy provides coverage for the most risks?

Correct AnswerverifiedShow Answer

Which one of the following coverages would pay for medical care for people who were injured in your automobile?

Correct AnswerverifiedShow Answer

Which one of the following would not be considered personal property by a homeowner's insurance policy?

Correct AnswerverifiedShow Answer

The uncertainties of direct and indirect losses to personal or real property due to fire, wind, accident, theft, etc., are called ____________ risks.

Correct AnswerverifiedShow Answer

A system that requires each insurance company operating in a state to provide coverage to individuals who have been unable to obtain other insurance is referred to as:

Correct AnswerverifiedShow Answer

Personal risks, property risks, and liability risks are types of ________ risk.

Correct AnswerverifiedShow Answer

What type of coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others?

Correct AnswerverifiedShow Answer

What does the term subrogation mean as it relates to motor vehicle property damage coverage?

Correct AnswerverifiedSubrogation is defined as the ...View AnswerShow Answer

Another term for liability coverage that protects you from claims if a client holds you responsible for errors or you fail to perform as promised is:

Correct AnswerverifiedShow Answer

Possible losses due to negligence resulting in bodily harm or property damage to others are called ____________ risks.

Correct AnswerverifiedShow Answer

Which statement is not true about no-fault insurance systems?

Correct AnswerverifiedShow Answer

Georgette Valentine has expensive photography equipment for use in her hobby. Which one of the following types of coverage would pay for damage or theft of this equipment?

Correct AnswerverifiedShow Answer

Evan McWilliams accidentally collided with a car driven by Francis Sullivan. It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital. What part of Evan's automobile insurance policy would cover Francis's injuries?

Correct AnswerverifiedShow Answer

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Subrogation is defined as the ...
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