Question 1

(TCO 4) _____ risks refer to potential losses due to negligence resulting in bodily harm or property damage to others.

 Speculative

 Liability

 Property

 Personal

 Commercial

Question 2

(TCO 4) If you always fasten your seat belt in an automobile to protect yourself against injury, this is an example of _____ risk.

 shifting

 assuming

 pooling

 reducing

 avoiding

Question 3

(TCO 4) If a homeowner does not clear ice from stairs for a delivery person in a timely manner, this may result in a case of:

You Answered

 vicarious liability.

 negligence.

 assigned risk.

 umbrella coverage.

 coinsurance.

Question 4

(TCO 4) _____ is the legal responsibility for the financial cost of another person's losses or injuries.

 Theft

 Robbery

 Collusion

 Assigned risk

 Liability

Question 5

(TCO 4) If a home insurance policy contains a component that covers additional living expenses, then this component is designed to

 pay for medical expenses of people injured on your property.

 cover damage to property while away from home.

 reimburse a homeowner for damage done by a visitor.

 pay for temporary housing while your home is repaired.

 pay for repairs caused by fire or other hazards.

Question 6

(TCO 4) When you complete a household inventory, its purpose is to

 reduce insurance costs.

 increase liability coverage.

 obtain personal property floater coverage.

 document owned property.

 lower the chance of negligence.

Question 7

(TCO 4) Renter's insurance covers all but which of the following?

 Medical expenses for injuries to visitors

 Cost of legal action due to personal liability

 Additional living expenses

 Accidental damage to the property of others

 Fire damage of the building's roof

Question 8

(TCO 4) A(n) _____ is an insurance policy provision that requires that the insured pay for part of the loss of a claim if the property is not insured for the specified percentage of the replacement value.

 personal property floater

 endorsement

 umbrella coverage

 coinsurance clause

 assigned risk clause

Question 9

(TCO 4) Your home insurance policy has a $250 deductible. If a small fire causes $900 of damage to your home, what amount of the claim would the insurance company pay?

 $250

 $0

 $900

 $650

 Not able to determine from this information

Question 10

(TCO 4)) The 250 in 250/500/100 refers to

 property damage liability coverage.

 the limit for bodily injury claims that can be paid to one person.

 collision coverage.

 the total coverage for an accident.

 the amount of the deductible.

Question 11

(TCO 4) Financial losses due to _____ are covered through a comprehensive policy.

 injuries caused by a driver without insurance

 damage to your car in an accident for which you were at fault

 damage to your car caused by wind or hail

 legal action against you for an accident

 damage to a neighbor's tree with your car

Question 12

(TCO 4) Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $145,000, $75,000, and $80,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance?

 $45,000

 $100,000

 $75,000

 None. The total amount would be covered by insurance.

 $50,000

Question 13

(TCO 4) Life insurance premiums are determined basically by the  

  forces of supply and demand.

  insurance division of the federal government.

  forces of competition.

  use of mortality tables.

  guesswork of insurance executives.

Question 14

(TCO 4) You probably have little or no need for life insurance if you are

 a single person living alone or with parents.

 divorced and have two children.

 married and your spouse works.

 gainfully employed.

 a household with several children.

Question 15

(TCO 4) Using the nonworking spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

 $50,000

 $70,000

 $90,000

 $110,000

 $140,000

Question 16

(TCO 4) Which type of insurance is sometimes called temporary insurance?

 Whole life  

 Term  

 Straight life

 Ordinary life

 Modified life

Question 17

(TCO 4) All of the following are innovative ways that concerned groups are containing healthcare costs except for

 the establishment of incentives to encourage preventive care.

 encouraging the use of prepaid group practices.

 the establishment of community education programs so people can learn to take better care of themselves.

 encouraging doctors to pay cash for routine medical costs.

 picketing at hospitals and physician offices.

Question 18

(TCO 4) Referring to types of health insurance, additional variations of health insurance can include

 life insurance.

 an annuity.

 personal liability insurance.

 disability insurance.

 an endowment.

Question 19

(TCO 4) Because coverage and costs can vary from company to company, it is important to shop carefully for _____ coverage.

 group health

 individual health

 hospital expense

 surgical expense

 physician's expense

Question 20

(TCO 4) A(n) _____ policy might not cover all of your health insurance needs or may deny benefits if you lose your job.

 comprehensive medical

 individual health

 basic health

 group health

 disability income