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Exam 11: Auto and Homeowners Insurance

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Question 71

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If you are in an auto accident,you should leave the scene of the accident to go home and call the police from home.

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Question 72

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In general,the cost of comprehensive and collision insurance is the most expensive part of your automobile policy and represents about 60% of the cost.

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Question 73

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Your automobile insurance policy contains policy limits of 200/300/100.If you have an accident in which you are deemed at fault and two people sustain bodily injuries that result in combined claims of $450,000,how much of the claim will not be covered under your insurance policy?

Auto insurance rates are based upon

The most important reason to purchase an umbrella policy is

During an unusually heavy rain,the basement of your house flooded and an antique dresser from the 1860s was destroyed.The dresser was originally purchased for $1,300 10 years ago and was recently appraised for $2,600; you recently received an offer from an antique collector for $3,100.Under a standard homeowner's policy,how much would you receive from your insurance company to cover this loss?

Since insurance companies rely mostly on their premiums to cover claims,they price their insurance policies to reflect the probability of a claim and the size of the claim.

Having adequate amounts of auto and homeowner's insurance affects your financial plan by

A higher deductible reduces the amount of coverage provided by homeowner's insurance,and therefore results in a lower insurance premium.

________ is not a suggested risk management method.

Medical payments coverage insures against costs of medical care for you and other passengers in your car when you are at fault in an accident.

In general,the most expensive part of your automobile policy is ________ coverage.

One method of managing risk is to limit your exposure to a financial loss.

Insurance should be considered even when there is a high likelihood than an event will cause a small financial loss.

The most popular forms of insurance for individuals are property and casualty,life insurance,and health insurance.

Comprehensive coverage would cover financial losses due to