Question 1

Which one of the following would be an example of the driver classification category that determines insurance rates?

Accepted Answer

Charlie Purciful being 22 years old is an example of the driver classification category that determines insurance rates, as younger drivers are typically charged higher rates due to their lack of experience and increased likelihood of being involved in accidents. The other options do not provide information relevant to driver classification for insurance rates.

Question 2

The 500 in 200/500/50 refers to:

Accepted Answer

The 500 in 200/500/50 refers to the limit for all bodily injury claims from a single accident. The first number represents the limit per person, the second number represents the limit per accident, and the third number represents the limit for property damage liability coverage. Therefore, option E is the correct answer.

Question 3

_________ coverage protects your automobile from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal.

Accepted Answer

Comprehensive coverage is the type of insurance that protects your vehicle from risks like glass breakage, falling objects, vandalism, or damage caused by hitting an animal.

Question 4

Which of the following would not be considered personal property under a typical homeowner's insurance policy?

Accepted Answer

Buildings and other structures are typically covered under the dwelling portion of a homeowner's insurance policy, not the personal property portion.

Question 5

Personal risks are the uncertainties surrounding the loss of income or life due to all except:

Accepted Answer

Professional misconduct is not a personal risk but a professional risk that may affect one's career or reputation. Personal risks refer to events or situations that may directly impact an individual's ability to generate income or support themselves and their family, such as premature death, illness, disability, and unemployment.

Question 6

David Bowers must show a card from his automobile insurance company when he registers his car in the state of Oklahoma each year. Which of the following types of laws is the reason he must show this card each year?

Accepted Answer

David Bowers must show a card from his automobile insurance company when he registers his car each year because of financial responsibility laws. These laws require drivers to maintain a certain level of liability insurance coverage in case of an accident.

Question 7

Ginger Simpson ran off the road and hit a bridge support. She was seriously injured and spent three days in the hospital. What part of Ginger's automobile insurance policy would cover Ginger's injuries?

Accepted Answer

Medical payments coverage typically covers injuries sustained by the driver and passengers of the insured vehicle, regardless of who is at fault for the accident.

Question 8

Which one of the following would be an example of a rating territory that helps determine insurance rates?

Accepted Answer

Rating territories are geographical regions that insurance companies use to determine insurance premiums. Therefore, Kathy Smith living in Guthrie, Oklahoma would be an example of a rating territory.

Question 9

A parent may be held responsible for the actions of their child if those actions cause financial or physical harm to others. This is known as:

Accepted Answer

Vicarious liability holds a person responsible for the actions of another person, in this case a parent for the actions of their child. This applies in situations where the child is not yet old enough to be held legally responsible for their actions, but has caused harm to others. Negligence refers to a failure to exercise reasonable care, strict liability refers to being held responsible for harm caused by a product regardless of fault, umbrella coverage is an additional insurance policy that provides coverage beyond a normal policy, and self insurance refers to an individual or company choosing to cover potential risks on their own without purchasing insurance.

Question 10

Kyle Burroughs left his car parked on the street all night. When he came out in the morning all four of his tires had been slashed by vandals. What part of Kyle's automobile insurance would cover this damage?

Accepted Answer

Comprehensive physical damage coverage typically covers vandalism to a vehicle, such as slashed tires. Collision coverage is for damage caused by a collision with another object or vehicle, and property damage liability covers damage caused by the insured to another person's property. Bodily injury liability and medical payments coverage are for injuries sustained by others in an accident.

Question 11

Your home insurance policy has a $500 deductible. If a windstorm causes $2,000 damage to your home, what amount of the claim would the insurance company pay?

Accepted Answer

The insurance company would pay for the damage amount above the deductible, which is $1,500 ($2,000 - $500). Therefore, the correct answer is option C.

Question 12

Which of the following might qualify Amy Farmer for a premium discount on her automobile insurance?

Accepted Answer

All of the listed options can qualify a person for a premium discount on their automobile insurance. Completing a driver's training program can demonstrate responsible driving habits, earning good grades can show responsibility and potentially lower risk, installing an alarm system can deter theft and vandalism, and carpooling can reduce mileage and lower risk.

Question 13

Which of the following is not something you should do when you are involved in an automobile accident?

Accepted Answer

It is important to avoid admitting liability or discussing fault immediately after an accident, as this can impact any legal or insurance proceedings that may follow. It is best to stick to sharing only necessary information such as contact details and insurance information with the other parties involved.

Question 14

Hermione Granger borrowed her best friend's car and was in an accident. She was at fault. The car was totaled. What part of Hermione's automobile insurance policy would cover the damage to her friend's car?

Accepted Answer

Property damage liability coverage is the part of an automobile insurance policy that covers damage caused by the policyholder to someone else's property, including their vehicle. In this case, Hermione's friend's car was damaged in the accident, so property damage liability coverage would cover the cost of repairing or replacing it.

Question 15

Georgia Owen was in an accident in which her car was totaled. What part of Georgia's automobile insurance would cover the damage to her car?

Accepted Answer

The collision coverage of Georgia's automobile insurance would cover the damage to her car in this situation.

Question 16

Personal risks, property risks, and liability risks are types of ________ risk.

Accepted Answer

Personal risks involve the individual's well-being and health. Property risks are related to damage or loss of property. Liability risks arise from legal obligations or responsibilities. All of these risks are inherent in everyday life and fall under the category of pure risk. Speculative risk involves the chance of loss or gain, such as gambling or investing in the stock market, which is not included in these options. Avoided and reduced risks are strategies to manage or mitigate risk, but not types of risk themselves. Assumed risk refers to a situation in which an individual knows of a risk but still engages in the activity, which is not a type of risk itself.

Question 17

Evan McWilliams accidentally collided with a car driven by Francis Sullivan. It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital. What part of Evan's automobile insurance policy would cover Francis's injuries?

Accepted Answer

Bodily injury liability coverage in automobile insurance provides coverage for injuries to other persons that the policyholder is responsible for. This would cover Francis's injuries in the scenario described.

Question 18

Which one of the following would not be considered personal property by a homeowner's insurance policy?

Accepted Answer

Homeowner's insurance policies typically do not consider structures that are permanently attached to the house, such as decks, as personal property. They are instead considered part of the dwelling coverage.

Question 19

What type of coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others?

Accepted Answer

Liability coverage is designed to protect a homeowner from legal action taken against them if they are found to be legally responsible for injury or property damage to others. This coverage can pay for legal fees, court costs, and settlements or judgments up to the limit of the policy. Medical payments coverage provides coverage for medical expenses regardless of fault, while a floater provides additional coverage for specific high-value items. Comprehensive coverage typically covers damage to a home from non-collision events such as fire, theft, or weather-related damage. Personal property coverage protects personal belongings from damage or loss.

Question 20

What type of personal liability coverage is also called a personal catastrophe policy?

Accepted Answer

An umbrella policy is also known as a personal catastrophe policy. It provides additional liability coverage above and beyond the limits of a person's primary insurance policies, such as auto and homeowner's insurance.

Quiz 10: Property and Motor Vehicle Insurance