Question 1

Sandra is contacting several insurance companies to compare coverage for her home.Which of the following should NOT affect her premium?

Accepted Answer

Proximity to a school should not affect Sandra's premium as it is not directly related to the risk of damage or loss to her home. The other factors listed - alarm system, amount of coverage, type of structure, and deductible - all directly impact the level of risk and potential cost for the insurance company, which can affect the premium.

Question 2

Homeowner's insurance includes all of the forms listed here except

Accepted Answer

The answer of Homeowner's insurance includes all of the forms...

Question 3

When Stanley was visiting Elaine,he tripped on her front porch step and sprained his ankle.His injuries were covered by

Accepted Answer

Elaine's medical payments coverage typically covers injuries that occur on her property, regardless of who is at fault. This coverage would apply to Stanley's sprained ankle. The other choices are not relevant to this situation.

Question 4

Yogi is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

When applying for insurance for a new home, it is important to base the amount of insurance on the price to rebuild or repair it. This is because the cost to rebuild or repair a home may be different from its market value or purchase price. Insuring the home for the right amount will ensure that Yogi has enough coverage to repair or rebuild the home in case of damage or loss.

Question 5

The best place to keep a household inventory is

Accepted Answer

Keeping a household inventory in a safe deposit box provides a secure location outside of the home in case of theft, fire, or other disaster. It also ensures that the inventory is easily accessible when needed but not at risk of being damaged or lost in the event of an emergency.

Question 6

Cindy was contacted by her home insurance agent to discuss ways to decrease her premium.Which of the following should NOT reduce her premium?

Accepted Answer

Increasing the amount of coverage will not reduce Cindy's premium. In fact, it will likely increase it. All of the other options listed (installing an alarm system, smoke detectors or a fire extinguisher, and increasing her deductible) should help lower her premium.

Question 7

A policy that supplements your basic personal liability coverage is called a(n)

Accepted Answer

An umbrella policy is a type of supplementary policy that provides additional liability coverage beyond the limits of basic personal liability coverage. It can be used to supplement homeowner's insurance, auto insurance, and other types of insurance. It provides extra protection in case you are sued for damages that exceed your basic liability coverage limits.

Question 8

Personal liability coverage does NOT protect

Accepted Answer

The answer of Personal liability coverage does NOT protect
...

Question 9

Motor vehicle crashes cost more than ______ in lost wages and medical bills every year.

Accepted Answer

According to the National Safety Council, motor vehicle crashes cost approximately $150 billion in lost wages, medical expenses, and property damage in the United States every year.

Question 10

Home insurance policies include coverage for all of the following except

Accepted Answer

Home insurance policies typically do not cover business property.

Question 11

If you have a loss due to a flood,

Accepted Answer

Homeowner's insurance typically does not cover flood damage, so homeowners need to purchase separate flood insurance if they live in an area that is prone to floods.

Question 12

Barnaby is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

Insurance policies with inflation protection automatically adjust coverage to account for rising construction costs, ensuring adequate coverage over time.

Question 13

Andrew is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

Using the replacement value method for settling claims ensures that Andrew receives the full cost of repairing or replacing his personal belongings, rather than their depreciated value.

Question 14

Zach is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

When insuring a home, it is important to insure the building for its replacement value, which is the cost to rebuild or repair the home in the event of a loss. This ensures that Zach will receive the full cost of repairing or replacing his home if it is damaged or destroyed. Insuring the home for the price he paid (A) or using the actual cash value method for settling claims on personal belongings (C) may not provide adequate coverage. There is no automatic coverage for personal belongings at 125% of the home's insured amount (D). Zach may need to adjust his insured amount if there are changes to the home or if he acquires additional belongings, so his insured amount may not remain the same (E).

Question 15

Tom wanted to receive as many discounts on his home insurance as possible.Which of the following would NOT provide a discount?

Accepted Answer

All of these options (smoke detector, fire extinguisher, deadbolt locks, and alarm systems) are typically considered safety features by insurance companies. They can reduce the risk of damage or theft, which in turn can lead to discounts on home insurance premiums.

Question 16

Vincent is applying for insurance for his new home.Which of the following is correct?

Accepted Answer

Personal belongings are typically covered at a percentage (often 55-75%) of the home's insured amount in standard homeowners insurance policies.

Question 17

Which of the following is NOT correct about renter's insurance?

Accepted Answer

Renter's insurance typically does not cover the building or other structures on the site as that is the landlord's responsibility. The insurance is designed to protect the renter's personal belongings and provide liability coverage.

Question 18

Insurance that covers valuable items,such as an expensive harp,is called

Accepted Answer

Personal property floater insurance specifically covers individual high-value or unique items, such as a harp or other musical instrument, that may not be fully covered under traditional homeowner's insurance policies.

Question 19

Personal property insurance covers

Accepted Answer

Personal property insurance typically covers personal property items up to a certain percentage of the insured value of the home. The range can vary but it usually falls between 55-75%. Option E reflects that coverage.

Question 20

All of the following are acceptable types of documentation for a household inventory except

Accepted Answer

It is important to prove how much your possessions were worth and that they belonged to you. Committing information to memory will not be sufficient to process a claim.

Quiz 8: Home and Automobile Insurance