The uncertainties of direct and indirect losses to personal or real property due to fire, wind, accident, theft, etc., are called ____________ risks. |
property |
Defective house wiring is an example of a |
hazard |
Possible losses due to negligence resulting in bodily harm or property damage to others are called ____________ risks. |
liability |
Starting a small business that may or may not succeed is an example of ___________ risk. |
speculative |
The legal responsibility for the financial cost of another person’s losses or injuries is referred to as |
liability |
If a homeowner leaves toys on stairs that results in injury to a delivery person, this may be ruled as |
negligence. |
Negligence refers to |
failure to take ordinary and reasonable care. |
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. |
vicarious |
The additional living expenses component of a home insurance policy is designed to |
pay for temporary housing while your home is repaired. |
Georgette Valentine has expensive photography equipment for use in her hobby. Which of the following coverages would pay for damage or theft of this equipment? |
a personal property floater |
The ____________ coverage of a home insurance policy would cover accidental damage to another person’s property by a member of your family. |
personal liability |
An umbrella policy is designed to cover |
major personal liability suits. |
Most home insurance policies provide coverage for |
medical payments. |
Renter’s insurance would include coverage for |
personal |
Which of the following are not covered by renter’s insurance? |
fire damage of the building’s roof |
Which form of homeowner’s policy provides coverage for the most risks? |
special |
Kelly and Bob Walton recently purchased a new home and desire coverage for all causes of loss or damage except those specially excluded by the policy. They should obtain the ____________ form of homeowner’s policy. |
special |
Tara Guest owns a home in Edmond, Oklahoma. She is worried about a tornado causing damage to her home. The tornado is an example of: |
A peril |
Your home insurance provides for replacement value for personal property losses. A microwave is stolen. It cost $300 two years ago and has an expected life of six years. A comparable microwave costs $400 today. What amount will the insurance company pay? |
$400 |
Which of the following insurance policy provisions requires that the insured must pay for part of the loss of a claim if the property is not insured for the specified percentage of replacement value? |
coinsurance clause |
The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation. |
actual cash value |
Home insurance costs are affected most directly by |
the number of claims in an area. |
Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay? |
$350 |
The purpose of financial responsibility laws is to |
protect the public from financial losses due to auto accidents. |
The 100 in 100/300/50 refers to |
the limit for bodily injury claims that can be paid to one person. |
Henry Edwards was injured in an accident caused by another driver who did not have insurance. Henry’s medical expenses would be covered by |
uninsured motorists protection. |
Which of the following is a system in which drivers involved in an accident collect medical expenses, lost wages, and related injury costs from their own insurance company? |
no-fault insurance |
Comprehensive coverage would cover financial losses due to |
damage to your car caused by wind or hail. |
Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $150,000, $75,000, and $75,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance? |
$50,000 |
Your geographic location is a major factor in determining the ____________ used to calculate your automobile insurance premiums. |
rating territory |
Wind damage occurs to your car costing $800 to repair. If you have a $100 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay? |
$800 |
Which of the following refers to a category based on age, sex, marital status, and driving habits that is used to set automobile insurance premiums? |
driver classification |
Which of the following factors is used to determine a person’s driver classification? |
age |
The purpose of an assigned risk pool is to |
provide insurance for poor drivers. |
A system that requires each insurance company operating in a state to provide coverage to several individuals with poor driving records is referred to as |
an assigned risk pool. |