Question 1

Renter's insurance would include coverage for:

Accepted Answer

Renter's insurance typically covers personal property, not the house or other structures (which would be the responsibility of the landlord's insurance), flood damage or earthquake damage (which may require separate policies), or umbrella liability (which is a separate type of liability coverage).

Question 2

Georgette Valentine has expensive photography equipment for use in her hobby.Which one of the following types of coverage would pay for damage or theft of this equipment?

Accepted Answer

A personal property floater is a type of insurance that covers expensive items of personal property, outside of a standard homeowners or renters insurance policy. It typically provides coverage for damage or theft of the specific items listed in the policy, such as photography equipment.

Question 3

If a homeowner leaves toys on stairs that results in injury to a delivery person,this may be ruled as:

Accepted Answer

Leaving toys on the stairs can be considered negligence, as it poses a foreseeable risk of harm to others who may use the stairs. The homeowner had a duty to maintain a safe environment and by failing to remove the toys, they breached that duty. Therefore, the homeowner may be held liable for any resulting injuries as a result of their negligence.

Question 4

An umbrella policy is designed to cover:

Accepted Answer

An umbrella policy is an insurance policy that provides additional coverage above the limits of your existing homeowner's or auto insurance policies. It is specifically designed to cover major personal liability claims, such as lawsuits resulting from a serious car accident or an injury on your property. It does not cover personal property, additional buildings, travel, or flood damage.

Question 5

Which one of the following is not covered by renter's insurance?

Accepted Answer

Renter's insurance typically covers financial loss due to damage or loss of personal property, additional living expenses, and personal liability. However, damage to the building's roof from faulty wiring would typically be covered by the landlord's property insurance, not the renter's insurance.

Question 6

High winds cause damage to trees,shrubs,and plants.This insurance claim would be covered under the ____________ component of homeowner's insurance.

Accepted Answer

Damage to trees, shrubs, and plants would fall under the "house and other structures" component of homeowner's insurance, which covers damage to structures not attached to the main dwelling, such as sheds, garages, or fences.

Question 7

Kelly and Bob Walton recently purchased a new home and desire coverage for all causes of loss or damage except those specially excluded by the policy.They should obtain the ____________ form of homeowner's policy.

Accepted Answer

The special form of homeowner's policy provides coverage for all causes of loss or damage except those specifically excluded. This is the most comprehensive form of coverage and would be the best choice for Kelly and Bob Walton who are looking for coverage for all possible risks.

Question 8

The legal responsibility for the financial cost of another person's losses or injuries is referred to as:

Accepted Answer

Liability refers to the legal responsibility for the financial cost of another person's losses or injuries. Theft and robbery refer to criminal acts, assigned risk refers to a type of insurance pool, and collusion refers to a secret agreement or cooperation between parties for an illegal or deceitful purpose.

Question 9

Which of the following would be covered by a home insurance policy?

Accepted Answer

Damage to your roof from hail is typically covered under a home insurance policy, as it is considered a form of property damage.

Answer: B 
 Some home insurance policies may provide coverage for injury to animals, birds, or fish, depending on the specific policy and circumstances.

Note: A, C, and E are not typically covered by a home insurance policy. Medical expenses for injuries sustained by others would generally be covered by liability insurance, while theft of business supplies would typically require a separate business insurance policy.

Question 10

The ____________ coverage of a home insurance policy would cover accidental damage to another person's property by a member of your family.

Accepted Answer

The answer of The ____________ coverage of a home insurance...

Question 11

Negligence refers to:

Accepted Answer

Negligence refers to the failure to take ordinary or reasonable care. It is a legal concept that involves a breach of duty of care that results in harm to another person or property.

Question 12

Which of the following is considered personal property for home insurance coverage?

Accepted Answer

Furniture is personal property that is typically covered under home insurance coverage. Automobiles, garages, houses, and trees and shrubs are not considered personal property for home insurance coverage.

Question 13

Most home insurance policies provide coverage for minor accidental injuries on your property under:

Accepted Answer

Medical payments coverage typically provides coverage for minor accidental injuries that occur on your property, such as a guest slipping and falling. This coverage is meant to cover small medical expenses without the need for a liability claim. Earthquake damage, flood damage, umbrella liability, and personal property floaters do not typically provide coverage for minor accidental injuries on your property.

Question 14

Starting a small business that may or may not succeed is an example of ___________ risk.

Accepted Answer

Speculative risk refers to the risk associated with starting a new business venture where the outcome is uncertain, and there is a chance of gain or loss. This type of risk involves taking a calculated risk, and the potential returns are usually higher than for other types of risk.

Question 15

Eating a balanced diet and exercising is an example of risk _____.

Accepted Answer

Eating a balanced diet and exercising reduces the risk of developing various health problems and diseases, such as obesity, diabetes, and heart disease.

Question 16

Wearing a seat belt in an automobile to protect yourself against the risk ofinjury in an automobile accident is an example of risk _____.

Accepted Answer

Wearing a seat belt reduces the risk of injury in an automobile accident, thus it is an example of risk reduction. Risk acceptance is when an individual accepts the potential consequences of a risk without taking any action to mitigate it. Risk pooling is a strategy of combining and sharing risks with others to reduce individual risk. Risk shifting is transferring the risk to another party, such as purchasing insurance. Risk avoidance is when an individual avoids a risky situation altogether.

Question 17

The additional living expenses component of a homeowner's insurance policy is designed to:

Accepted Answer

The additional living expenses component of a homeowner's insurance policy typically covers the costs of temporary housing, food, and other expenses if you need to live elsewhere while your home is being repaired due to a covered loss, such as a fire or natural disaster.

Question 18

Which form of a homeowner's policy expands coverage to include replacement cost on contents?

Accepted Answer

The Comprehensive Form (HO-5) policy offers the most extensive coverage for homeowners, including replacement cost coverage for both the dwelling and the contents without requiring the actual cash value settlement. This makes it the most inclusive option for homeowners seeking broad protection for their property and belongings.

Question 19

While cleaning your home,a worker damages some furniture.You take action against the worker's employer to cover the cost of the damage.This is an example of a ____________ liability.

Accepted Answer

Vicarious liability refers to a situation where one party is held responsible for the actions of another party. In this case, the worker's employer is being held responsible for the worker's actions that caused damage to the furniture.

Question 20

Your home insurance provides for replacement value for personal property losses.A microwave is stolen.It cost $300 two years ago and has an expected life of six years.A comparable microwave costs $400 today.What amount will the insurance company pay?

Accepted Answer

Since the policy provides for replacement value, the insurance company will pay the cost of a comparable microwave today, which is $400.

Quiz 10: Property and Motor Vehicle Insurance