Deck 37: Property, Casualty and Automobile Insurance

Question 1

Property damaged by a hit-and-run driver is covered by uninsured motorist insurance.

Answer 1

False

Question 2

Insurance policies cannot be assigned before a loss occurs without the insurer's permission.

Answer 2

True

Question 3

A false statement on an insurance policy application

A) voids the policy.
B) has no effect on the validity of the policy.
C) raises the premium.
D) may permit the insurer to void the policy.

Answer 3

D

Question 4

Any risk not covered is known as a deductible.

Question 5

Damage to one's car caused by an accident would be covered by

A) no-fault insurance.
B) uninsured motorist coverage.
C) inland marine coverage.
D) none of these.

Question 6

Damage caused to a vehicle by a falling tree would be covered by collision insurance.

Question 7

Reimbursement for a loss is called

A) subrogation.
B) indemnification.
C) release.
D) deductible.

Question 8

A property owner always has an insurable interest.

Question 9

Any false statement on an application allows the insurer to cancel the policy.

Question 10

Insurance may be sold only by an insurance company agent.

Question 11

Any increased risk caused by the insured releases the insurer from liability.

Question 12

An insurance company is liable for claims only up to the limits of the policy.

Question 13

In an insurance contract, the person buying the insurance is called the insured, and the insurance company is called the insurer.

Question 14

The amount of an insurance policy premium may depend upon the risk involved.

Question 15

A person who fails to file an accident report may have his or her driver's license revoked as a result.

Question 16

Damage caused by rioters is covered by a standard fire insurance policy.

Question 17

An all-risk policy will cover loss of property due to the insured's negligence.

Question 18

Damage to your car caused by hitting a tree would be covered by

A) property damage liability insurance.
B) uninsured motorist coverage.
C) collision insurance.
D) comprehensive insurance

Question 19

Additional coverage can be added to insurance policies through riders.

Question 20

Insurance purchased from a broker is effective when

A) the application is filled out.
B) the first premium is paid.
C) the company accepts it.
D) a binder is issued.

Question 21

____________________ is a means of sharing risks with other people to limit economic loss.

Question 22

Comprehensive insurance covers damage to the insured's car from all of the following except

A) collision.
B) theft.
C) vandalism.
D) flood.

Question 23

An example of a multi-peril policy is a(n)

A) all-risk policy.
B) marine policy.
C) liability policy.
D) homeowners policy.

Question 24

The guest laws relieve a driver of all liability for injuries to

A) all passengers
B) guests unless there is negligence.
C) passengers unless there is any negligence by the driver.
D) none of these.

Question 25

That part of a loss that an insured must pay is called a

A) subrogation.
B) deductible.
C) risk of loss.
D) casualty.

Question 26

Damage to one's boat would be covered by a(n)

A) renter's policy.
B) marine policy.
C) ocean policy.
D) personal policy.

Question 27

Coverage for loss that is limited to a specific amount is called

A) limited coverage.
B) open coverage.
C) valued coverage.
D) minimum coverage.

Question 28

Under no-fault insurance laws, an injured person collects from

A) the insurance company of the person at fault.
B) his or her own insurance company.
C) the state insurance fund.
D) all of these.

Question 29

The ____________________clause provides protection for a car owner and anyone who drives the car with the owner's permission.

Question 30

A homeowners policy covers loss caused by

A) fire.
B) explosion.
C) burglary.
D) all of these.

Question 31

A property insurance policy may be canceled

A) at any time by the insurer or the insured.
B) by the insured only.
C) by the insurer only.
D) by the insurance agent only.

Question 32

To collect under an insurance policy for a theft loss, the insured must

A) notify the police.
B) notify the insurance company.
C) provide proof of the loss.
D) all of these.

Question 33

A(n) ____________________ protects against loss prior to an insurance policy being issued.

Question 34

To insure against the loss of a camera caused by leaving it on a bus, one would purchase

A) an all-risk policy.
B) a burglary policy.
C) an inland marine policy.
D) none of these.

Question 35

To collect for damage, the insured must have an insurable interest

A) at the time the application is filed.
B) at the time the policy is issued.
C) at the time the loss occurs.
D) all of these.

Question 36

An insured whose car damages another's property is protected by ____________________ insurance.

Question 37

Collision insurance

A) usually has a deductible.
B) covers damage to a vehicle regardless of the amount.
C) covers only collision with another vehicle.
D) provides no coverage if the driver is negligent.

Question 38

A document adding to an insurance policy is called a

A) codicil.
B) subrogation.
C) release.
D) rider.

Question 39

An extended coverage rider would not cover loss caused by

A) burglary.
B) smoke.
C) explosion.
D) windstorm.

Question 40

A(n) ____________________ sells insurance for the company by whom he or she is employed.

Question 41

Wilson sold a valuable coin collection to Blake. Since the insurance policy on the collection still had two years to run, Wilson turned it over to Blake without notifying the insurance company. A year later, the collection was stolen. Is the insurance company liable for the loss?

Question 42

Transferring an insurance policy to another person is called a(n) ____________________.

Question 43

Kline signed a contract to buy a house and insured the house against fire and loss. Prior to closing, a fire destroyed the house. Can Kline collect the proceeds of the insurance policy?

Question 44

Balzotti placed a sofa too close to a baseboard heater. The fabric on the sofa was severely scorched in several places. Can Balzotti recover under a standard fire insurance policy?

Question 45

The ____________________ is the agreed-upon amount of a loss paid by the insured.

Question 46

Payment by an insurance company of a specific amount for a loss is called ____________________ coverage.

Question 47

Boyd's car, which originally cost $20,000, has a market value of $12,000. She has collision insurance on the car with a $250. deductible. One night she skidded on some ice, slammed into a building, and completely destroyed her car. How much can she collect from the insurance company?

Question 48

____________________ protects an insured against loss or damage to real or personal property.

Question 49

An insurance policy that covers losses from different types of damage is called a(n) ____________________ policy.

Question 50

Lutz took out a standard fire insurance policy on her home from two different companies. When the house was destroyed by fire, Lutz tried to collect the full amount from both companies. Will she succeed?