Deck 10: Protecting Your Property

Question 1

The "other-insurance clause" helps prevent the violation of the principle of indemnity.

Answer 1

True

Question 2

A trampoline in your back yard is an example of a hazard.

Answer 2

True

Question 3

Liability claims may result from alleged negligent acts.

Answer 3

True

Question 4

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

Question 5

Liability insurance generally provides some coverage for legal fees.

Question 6

Actual cash value is defined as replacement cost minus depreciation.

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

Earthquakes are covered under most homeowner's policies.

Question 12

A peril is a cause of loss.

Question 13

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

Question 14

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

Question 15

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

Question 16

The principle of indemnity does not apply to life and health insurance.

Question 17

The right of subrogation allows the insurer to get reimbursed for claims paid.

Question 18

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 19

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

Question 20

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

Question 21

An HO-3 form with one insurance company may provide completely different coverage than an HO-3 form with another insurance company.

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

An 80 percent co-insurance clause requires the insured to carry insurance protection equal to 80% of the original cost of the home.

Question 32

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 33

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 34

A co-insurance 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 35

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

Question 36

Replacement cost and actual cash value is the same thing.

Question 37

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

Question 38

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

Question 39

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

Question 40

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 41

When you charge your car rental to your credit card,collision insurance may be offered under the umbrella of the credit card..

Question 42

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 43

A captive agent represents many insurance companies.

Question 44

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

Question 45

Personal umbrella policies are intended primarily for wealthy families who are often viewed as targets for large liability claims.

Question 46

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

Question 47

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

Question 48

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

Question 49

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

Question 50

The automobile insurance policy normally does not cover the theft of personal property left in the insured vehicle.

Question 51

State financial responsibility laws require only auto liability insurance.

Question 52

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 53

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

Question 54

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

Question 55

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

Question 56

Automobile medical payments coverage applies to the named insured and family members who are injured while occupying any automobile.

Question 57

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

Question 58

Your automobile liability insurance covers the damage caused to your automobile when you are at fault in an accident.

Question 59

A person need not be occupying an automobile when the accidental injury occurs to be eligible for benefits from a PAP.

Question 60

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

Question 61

The advisable dollar limit for any one auto accident is $250,000.

Question 62

Your standard HO policy will not include coverage for damage done by

A)flood.
B)windstorm.
C)falling objects.
D)fire.
E)theft.

Question 63

A standard HO policy covers damage from most weather-related perils except

A)snow and freezing.
B)windstorms and earthquakes.
C)earthquakes and floods.
D)floods and volcanic eruption.
E)Freezing and volcanic eruption.

Question 64

A liability suit could result when

A)lightning strikes your home.
B)your son falls down the stairs of your home.
C)your auto is stolen.
D)your dog bites the neighbor.
E)smoke from the fireplace fills your house.

Question 65

Negligence results when a person

A)is not insured.
B)acts as a "reasonable person."
C)fails to act as a "reasonable person."
D)admits it.
E)is more than 18 years old.

Question 66

Section I of a homeowner's insurance policy covers the insured's dwelling,accompanying structures,and personal property.

Question 67

The principle of ____ states that an insured should not be compensated by an insurance company in an amount exceeding the economic loss.

A)subrogation
B)insurable interest
C)coinsurance
D)indemnity
E)none of these

Question 68

Section I of a homeowner's insurance policy covers medical payments.

Question 69

Some common liability risks include:

A)driving a car
B)entertaining guests at home
C)being careless in performing professional duties
D)all of the above

Question 70

Age of home affects insurance premiums the most.

Question 71

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

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

You are single and age 35.Getting married will lower your auto insurance premiums.

Question 74

The 80 percent co-insurance clause in a homeowner's policy would cause a reduction in the claim payment for a covered loss to the dwelling of $30,000 in which of the following cases?

A)Policy dwelling limit of $75,000, replacement cost of dwelling $90,000, actual cash value of dwelling $85,000
B)Policy dwelling limit of $75,000, replacement cost of dwelling $100,000, actual cash value of dwelling $90,000
C)Policy dwelling limit of $90,000, replacement cost of dwelling $90,000, actual cash value of dwelling $90,000
D)Policy dwelling limit of $110,000, replacement cost of dwelling $110,000, actual cash value of dwelling $90,000
E)Policy dwelling limit of $120,000, replacement cost of dwelling $100,000, actual cash value of dwelling $90,000

Question 75

The asset most likely to be specifically itemized in a personal property floater is

A)sofa.
B)clothing.
C)jewelry.
D)garden equipment.
E)all of these.

Question 76

Section II of a homeowner's insurance policy covers personal property.

Question 77

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 78

The federal government subsidizes the flood insurance program.

Question 79

Which Homeowners' policy is best suited for a resident of a rented apartment to cover that person's personal property?

A)HO-3
B)HO-4
C)HO-5
D)HO-8
E)A Homeowners' policy will not apply since the real estate involved is not owned by the insured.

Question 80

Lenders typically require collision coverage on cars they finance.