True/False
Indicate whether the
statement is true or false.
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Ch 22: Property and Liability
Insurance
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1.
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Renters must insure their own property as well as their part of the building
they rent.
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2.
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Hazards include risks such as fire, water, wind, and smoke that may cause
physical damages to property.
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3.
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Generally, people insure the contents of their house for at least half the value
of the building.
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4.
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A homeowner’s property inventory needs to be more detailed than a
renter’s household inventory.
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5.
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Typically, every loss a renter or homeowner suffers will be covered by property
insurance.
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6.
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Insurance will reimburse the actual cash value of a loss unless your policy
includes a replacement value clause.
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7.
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The main component of homeowners insurance is protection against financial loss
due to damage or destruction.
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8.
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Homeowners are typically held liable for damages to both guests and
trespassers.
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9.
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Comparison shopping can save renters and homeowners a considerable amount of
money on their insurance.
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10.
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Only a handful of states require minimum automobile insurance.
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11.
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Insurance companies typically charge higher premiums on family cars than on
sports cars.
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12.
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When all of the five basic types of auto insurance are purchased together in a
single policy, it is known as comprehensive coverage.
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13.
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Steffi was in an automobile accident that was not her fault. Her own automobile
liability insurance will NOT pay for damage to Steffi’s vehicle
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14.
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Buying a car with extra airbags and antilock brakes can reduce the cost of
personal injury protection.
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15.
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Automobile insurance that pays for your injuries when the other driver is
legally liable but unable to pay is called umbrella liability insurance.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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Ch 22: Property and Liability
Insurance
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16.
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This type of risk includes the cost of another person’s losses for
injuries at your property.
a. | liability | c. | crimes | b. | hazards | d. | perils |
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17.
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A building insured for $300,000 is likely to have contents covered for at
least
a. | $30,000 | c. | $150,000 | b. | $75,000 | d. | $300,000 |
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18.
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The cost of replacing an item regardless of its actual cash value is
called
a. | opportunity cost | c. | the deductible | b. | replacement value. | d. | exclusionary
costs |
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19.
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The most complete homeowners insurance policy coverage is called
a. | broad form | c. | comprehensive | b. | special form | d. | basic |
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20.
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Which of the following items would NOT be covered by most homeowners insurance
policies?
a. | living room furniture | c. | kitchen appliances | b. | a car stereo | d. | all of the above would be
covered |
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21.
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Which of these people would be considered an uninvited guest on your
property?
a. | your brother, who you’ve asked to come watch the ballgame with
you | b. | a burglar who breaks into your house to rob it | c. | a plumber who comes
to fix a leaking faucet in your bathroom | d. | the letter carrier who delivers your
mail |
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22.
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Automobile insurance premiums are based on a number of different factors. Which
of the following would NOT be one of those factors?
a. | occupation of the driver | c. | age of the
driver | b. | model of the car | d. | location of the driver |
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23.
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If you are in an auto accident that is your fault and your insurance company has
to pay claims,
a. | your insurance will immediately be canceled. | b. | you will have to pay
the insurance company back. | c. | your premium will probably go
up. | d. | your insurance company will require you to take a driving refresher
course. |
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24.
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Hassan has liability insurance coverage at 100/300/50. How much will
Hassan’s insurer pay for property damage per accident?
a. | up to $50,000 | b. | up to $100,000 | c. | up to
$300,000 | d. | $50,000 for the first accident, $100,000 for the second, and $300,000 for the
third |
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25.
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Which type of auto insurance protects your own car against damage from auto
accidents?
a. | comprehensive | c. | liability | b. | personal injury protection | d. | collision |
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Matching
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Ch 22: Property and Liability
Insurance a. | Package | f. | coinsurance | b. | floater | g. | Comprehensive | c. | endorsement | h. | assigned-risk | d. | Umbrella | i. | exclusions | e. | driving | j. | attractive |
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26.
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__________ policies include several types of insurance coverage in a
single contract and usually carry a lower premium than you would pay for each coverage purchased
separately.
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27.
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A written amendment to an insurance policy is called a(n) __________.
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28.
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A(n) __________ clause is a provision included in most property insurance
policies that requires policyholders to insure their building for a stated percentage of its
replacement value in order to receive full reimbursement for a loss
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29.
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Items that insurance policies specifically will not cover are called
__________
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30.
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A personal property __________ is insurance coverage for the insured’s
movable property wherever it may be located.
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31.
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A(n) __________ nuisance is a dangerous place, condition, or object that is
particularly tempting to children.
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32.
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Your __________ record includes the number and type of traffic tickets
you’ve received along with the number of accidents in which you’ve been involved.
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33.
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__________ coverage protects you from damage to your vehicle from causes such
as fire, theft, falling objects, and acts of vandalism.
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34.
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Every state has a(n) __________ pool that consists of people who are unable to
obtain auto insurance due to the high risk they present.
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35.
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__________ liability insurance supplements your basic auto and property
liability coverage by expanding limits and including additional risks.
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