Deck 10: Protecting Your Property

Question 1

Fire is an example of a peril.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

Floods and earthquakes are specifically included in most homeowner's policies.

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

A peril is a cause of loss.

Question 12

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

Question 13

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 14

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

Question 15

Liability insurance generally provides some coverage for legal fees.

Question 16

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

Question 17

Liability exposures may result from alleged negligent actions.

Question 18

Actual cash value is defined as replacement cost minus depreciation.

Question 19

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

Question 20

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

Question 21

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

Question 22

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

Question 23

Replacement cost and actual cash value are the same thing.

Question 24

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

Question 25

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

Question 26

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 27

Homeowner's co-insurance requires the insured to carry insurance protection equal to the market value of the house.

Question 28

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

Question 29

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 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

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 35

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 HO-2 policy will cover this loss.

Question 36

Your section II homeowner's policy will pay if you carelessly,but unintentionally,knocked someone down your stairs.

Question 37

Earthquakes are covered under most homeowner's policies.

Question 38

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

Question 39

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 40

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

Question 41

No-fault automobile insurance is a system under which each insured party is compensated by his or her own company,regardless of which party caused the accident.

Question 42

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 43

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

Question 44

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

Question 45

State financial responsibility laws require only auto liability insurance.

Question 46

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 47

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

Question 48

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

Question 49

Personal liability umbrella policies often include limits of $1 million or more.

Question 50

Automobile medical payments insurance normally contains an indemnity clause.

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

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 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

The federal government subsidizes the flood insurance program.

Question 62

A captive agent represents many insurance companies.

Question 63

The asset most likely to be specifically itemized in a property insurance endorsement is:

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

Question 64

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

Question 65

The best place to buy automobile insurance is your insurance agent.

Question 66

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

Question 67

Your standard homeowner's policy will not include coverage for damage done by:

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

Question 68

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

Question 69

Age of home affects insurance premiums the most.

Question 70

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

A) proof of loss
B) personal property inventory
C) values of items in inventory at the time of the loss
D) all of the above
E) none of the above

Question 71

A standard homeowner's policy covers damage from most 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 72

Never discuss liability at the scene of an accident

Question 73

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

Question 74

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 75

The basic principles of property and liability insurance pertain to:

A) the types of exposure.
B) the principles of indemnity.
C) co-insurance.
D) all of the above
E) none of the above

Question 76

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
E) none of the above

Question 77

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

Question 78

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

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

Getting married will lower your auto insurance premiums.