Question 1

If your neighbour falls down the steps in your home and sues you for damages,you could be held responsible to pay compensation for his or her injuries and rehabilitation.

Accepted Answer

As the homeowner, you have a responsibility to ensure that your property is safe for others. If your neighbour falls down the stairs in your home and it can be proven that it was due to your negligence in some way, you could be held responsible for their injuries and may be required to pay compensation for their damages and rehabilitation expenses.

Question 2

If Peter caused an accident,and his passenger,John,had to miss work for a month while he recovered,Peter's bodily injury liability coverage could cover medical expenses and loss of income for John.

Accepted Answer

Bodily injury liability coverage typically covers medical expenses and loss of income for injured passengers in an accident caused by the insured person.

Question 3

Brenda inherited some pieces of valuable art which she keeps in her home.She needs full comprehensive coverage to make sure her art is covered for replacement value.

Accepted Answer

The answer of Brenda inherited some pieces of valuable art...

Question 4

Driving carefully and obeying traffic laws is

Accepted Answer

Driving carefully and obeying traffic laws can reduce the risk of accidents and other negative outcomes on the road. It is a way of managing risk by taking steps to prevent or minimize potential dangers.

Question 5

Comprehensive coverage insures Peter against damage to his car that results from something such as hail or vandalism.

Accepted Answer

Comprehensive coverage provides protection against damages to the car that result from non-collision incidents such as theft, vandalism, hail, and other natural disasters. Therefore, Peter will be insured against such damages.

Question 6

An HDTV was purchased for $6500 and is now three years old.If it is stolen and it is deemed to have a life of five years,the insurance company will settle for $3000 under a cash value policy.

Accepted Answer

The cash value policy would consider depreciation, so the settlement would be less than $3000, as the TV has already depreciated over three years.

Question 7

If Eric's dog ran across a road and caused a driver to swerve and injure a passerby,Eric's umbrella personal liability coverage could cover the expenses of both the driver and the injured pedestrian.

Accepted Answer

Eric's umbrella personal liability coverage provides additional coverage beyond the limits of his homeowners or auto insurance policies. It covers bodily injury and property damage caused by him or his family members, including his dog. Therefore, if Eric's dog causes an accident that injures a passerby and the driver swerves to avoid the dog, Eric's umbrella personal liability coverage could cover the resulting expenses for both the driver and the injured pedestrian.

Question 8

A higher insurance deductible reduces the amount of coverage provided by homeowner's insurance,and therefore results in a lower insurance premium.

Accepted Answer

A higher insurance deductible means that the homeowner will pay more out of pocket before the insurance coverage kicks in. This decreases the risk to the insurance company and results in a lower premium. However, it also means that the homeowner has less coverage in the event of a claim.

Question 9

Insurance agents for an insurance company

Accepted Answer

Insurance agents primarily market insurance policies to potential clients. They are responsible for selling the company's insurance products but do not typically calculate risks, decide on the policies to offer, or set premium rates. Those tasks are usually handled by underwriters and actuaries within the company.

Question 10

In general,insurance companies generate their profit from

Accepted Answer

Insurance companies generate their profit mainly by investing the proceeds of premiums until the funds are needed to cover claims. This way, they earn income through interest, capital gains, and dividends on the investments. Over time, this income can exceed the amount paid out in claims, resulting in profits for the company.

Question 11

If you have automobile and homeowner's insurance,there is no reason to purchase an umbrella personal liability policy for additional coverage of $1 million.

Accepted Answer

While having automobile and homeowner's insurance provides some liability coverage, a personal umbrella policy can provide an additional layer of protection in case of a catastrophic event or lawsuit that exceeds the limits of those policies. An umbrella policy can also provide coverage for incidents not covered by those policies, such as libel or slander. Therefore, it may be beneficial to consider purchasing an umbrella policy for additional coverage.

Question 12

While renter's insurance would reimburse you if you had to replace furniture damaged in a fire,it would not pay for the medical expenses for a friend who was injured in your home.

Accepted Answer

Renter's insurance typically includes liability coverage, which can help pay for someone else's medical bills if they are injured in your home.

Question 13

Homeowner's insurance also covers medical payments and loss of income to the policyholder.

Accepted Answer

Homeowner's insurance typically covers damage to the property and personal liability for injuries to others, but it does not cover medical payments or loss of income for the policyholder themselves; those would be covered by health insurance and disability insurance, respectively.

Question 14

Which of the following is the best case for the need for third Chaptery liability insurance coverage?

Accepted Answer

The answer of Which of the following is the best...

Question 15

Refusing to go bungee jumping is

Accepted Answer

Refusing to go bungee jumping is avoiding risk because one is choosing not to engage in an activity that has a known level of risk, and therefore there is no transfer or sharing of risk involved.

Question 16

It is a good idea to list all of your personal assets,estimate the market value of each item,and then film the contents of your house with a video camera to be able to show proof of their existence.

Accepted Answer

This is a good idea for creating a personal inventory and having proof of ownership in case of theft or damage.

Question 17

Getting the flu vaccine is an example of

Accepted Answer

Getting the flu vaccine is a way to reduce the risk of getting infected with the flu. The vaccine doesn't completely eliminate the risk, but it lowers the chances of getting sick and reduces the severity of symptoms if you do get infected.

Question 18

If Zack had a replacement value home insurance policy and had a custom made table that he paid $16000 for a number of years ago and which was recently appraised for $22 000,the insurance company would pay him $16 000 for it,if it were destroyed in a fire.

Accepted Answer

With a replacement value home insurance policy, the insurance company would pay the cost to replace the item, which in this case would be the appraised value of $22,000, not the original purchase price of $16,000.

Question 19

Named perils coverage protects the automobile owner against theft of specific items named in the auto insurance policy.

Accepted Answer

Named perils coverage typically refers to a type of property insurance that covers specifically named events or risks, but it does not necessarily apply to auto insurance in the way described in the statement. Auto insurance policies typically include coverage for theft, but the specific items included may vary depending on the policy and insurer.

Question 20

Using one insurer for all types of insurance will not reduce your homeowner's insurance premium.

Accepted Answer

Using one insurer for multiple types of insurance, such as auto and homeowner's insurance, can often lead to discounts on premiums, including the homeowner's insurance premium, due to bundling policies.

Quiz 3: Protecting Your Wealth - Auto and Homeowner's Insurance