Deck 10: Protecting Your Property

Question 1

War,nuclear radiation and mysterious disappearances are but a few limitations and/or exclusions in insurance policies.

Answer 1

True

Question 2

Antiques,collections,and boats are adequately protected under a standard homeowner's policy.

Answer 2

False

Question 3

Property insurance is meant to protect property owners from two basic types of exposures,physical loss of property and loss through depreciation.

Answer 3

False

Question 4

The terms "perils" and "losses" refer to the same thing.

Question 5

The principle of indemnity states that the insured can be compensated for an amount equal to his economic loss.

Question 6

A written inventory of personal property is required by insurance companies for property insured under the unscheduled general contents coverage.

Question 7

A peril is a cause of loss.

Question 8

Floods are specifically defined in homeowner's policies.

Question 9

Property inventories are important to identify insurance needs and to substantiate claims.

Question 10

Personal property floaters provide increased coverage for jewelry and other collectable items at an additional premium.

Question 11

Actual cash value provides coverage at the current market value of your property.

Question 12

Taking pictures is a good way to supplement a personal property inventory.

Question 13

Actual cash value is defined as replacement cost minus depreciation.

Question 14

You would be considered to be negligent when you,a dependent,or another named insured's action causes harm or property loss.

Question 15

Liability claims may result from alleged negligent acts.

Question 16

Fire is an example of a hazard.

Question 17

Liability insurance generally provides some coverage for legal fees.

Question 18

Losses as the result of war are covered under most standard homeowners' policies.

Question 19

One should keep his personal property inventory in a separate location other than at home.

Question 20

The most common definition of actual cash value is purchase price less depreciation.

Question 21

Other-insurance clauses help prevent the violation of the principle of indemnity.

Question 22

The Principle of Indemnity does NOT apply to life and health insurance.

Question 23

Earthquakes are covered under most homeowners policies.

Question 24

A coinsurance clause will cause insurers to proportionately reduce claims payments unless you carry insurance up to a specific amount,such as 80 percent of the replacement value.

Question 25

HO-4 and HO-6 are for renters and owners of condominiums,respectively.

Question 26

If your insurance company makes a payment to you,subrogation is the right of the company to collect from the person causing the accident or from his/her insurance company.

Question 27

While you were away on your summer vacation,raccoons took up residence in your attic.They did $5,000 damage.Your H0-2 policy will cover this loss.

Question 28

Everything else being equal,a brick house costs more to insure under an unendorsed HO-3 policy than a wood frame house.

Question 29

The HO-3 form is a good policy for first-time buyer owners because it is a named perils policy.

Question 30

As a tenant,you would purchase a HO-3 policy.

Question 31

Under a coinsurance requirement of 80 percent,property with a replacement cost of $120,000 and an actual cash value of $90,000 is adequately insured with a policy for $80,000.

Question 32

The principle of indemnity generally limits the amount that the insured may collect to the actual cash value of the property.

Question 33

Homeowner policy forms are fairly standardized from one company to another.

Question 34

An HO-1 policy lists more perils for which you are insured than an HO-3 does.

Question 35

Nancy's house has been completely destroyed by fire.Prior to the accident,the house had a value of $100,000.Nancy had two separate policies totaling $60,000 each.She may collect $60,000 from each insurance company.

Question 36

More HO-1 policies are sold each year than the HO-2 and HO-3 policies combined.

Question 37

A house with a replacement value of $110,000 is currently insured for $90,000.The house has suffered a $15,000 loss from windstorm damage.The insurance company will pay the full $15,000 less the deductible.

Question 38

The Right of Subrogation allows the insured to get reimbursed for claims paid.

Question 39

HO coinsurance requires the insured to carry insurance protection equal to the market value of the house.

Question 40

While you were away on winter vacation,there was a severe snowstorm that caused your roof to cave in causing a $20,000 loss.Your H0-2 policy will cover this loss.

Question 41

Under a pure no-fault system insurance would not pay for medical expenses.

Question 42

A rental car could be a covered auto under a personal auto policy liability section.

Question 43

Your homeowner's policy will pay for damage to the neighbor's property when your 10 year old son throws a rock through her picture window.

Question 44

Internal limits are normally specified in the homeowners' insurance contract for some categories of personal property.

Question 45

The premiums for homeowners' insurance are based on size of deductible,internal limits,and standard coverage.

Question 46

Automobile medical payments insurance normally contains an indemnity clause.

Question 47

An inflation rider is a recommended addition to a homeowners' policy.

Question 48

The insurance company will provide defense for a covered person against both civil and criminal charges involving her motor vehicle.

Question 49

Replacement cost coverage is available for renters but requires and extra premium.

Question 50

You will insure your house for $90,000.The premium on an HO-3 policy will be greater than that of an HO-2 policy.

Question 51

Connie rented a hotel room while on vacation.If someone breaks into her room,her HO-4 policy will cover her stolen property.

Question 52

The automobile liability insurance policy covers the insured and residents of his/her household when driving an owned automobile.

Question 53

Replacement cost and actual cash value is the same thing.

Question 54

Protection for personal property both at home and away from home is a provision of the homeowners' policy.

Question 55

Like standard homeowners' policies,a renters' policy liability coverage includes coverage away from home.

Question 56

To save premium costs,one should decrease her deductible and liability coverage on a homeowners' policy.

Question 57

Careful drivers have limited need for liability protection,because they are not likely to be at fault in an accident.

Question 58

A $100,000/$300,000 bodily injury liability automobile policy could pay up to $100,000 to one person or up to $300,000 to several people seeking damages.

Question 59

Automobile liability claims could potentially be more costly to you than car damage claims.

Question 60

Covered liability perils do not include claims for libel,slander,or character defamation.

Question 61

A captive agent represents many insurance companies.

Question 62

The named insured and her passengers would be covered under automobile medical payments insurance.

Question 63

Uninsured motorist coverage covers passengers in your car from losses caused by your negligence.

Question 64

A personal liability umbrella policy typically includes coverage for auto related liability losses in excess of the limits purchased in a personal auto policy.

Question 65

The federal government subsidizes the flood insurance program.

Question 66

Uninsured motorist protection usually provides protection to your car if a hit-and-run incident occurs.

Question 67

The minimum limit for personal umbrella policies is generally $1,000,000.

Question 68

A college student from Chicago would see his auto insurance premiums go up when he takes his car to a small community to attend school.

Question 69

A personal property floater and a personal liability umbrella policy offer similar coverage.

Question 70

The personal liability umbrella policy typically includes coverage for liability losses that are in excess of the limits purchased in the comprehensive personal liability coverage provided in the homeowners' policy.

Question 71

The type of car you drive has little effect on your auto insurance premiums.

Question 72

The basic principles of property and liability insurance pertain to:

A) types of exposure
B) the principles of indemnity
C) coinsurance
D) all of the above

Question 73

Collision coverage would pay for damages to your car if a tree falls on it.

Question 74

Collision insurance pays for damage to your automobile regardless of who is at fault.

Question 75

Financial responsibility laws in most states are high enough to adequately meet one's auto liability needs.

Question 76

All property insurance companies require you to show the following when making a claim:

A) Proof of loss
B) Personal property inventory
C) Values at the time of inventory
D) All of the above.

Question 77

Getting married will lower your auto insurance premiums.

Question 78

The no-fault automobile insurance movement has had a major effect on auto insurance premiums.

Question 79

One should never admit fault at the scene of an accident.

Question 80

State financial responsibility laws require only auto liability insurance.