Pers Finance 10 – Flashcards
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The uncertainties of direct and indirect losses to personal or real property due to fire, wind, accident, theft, etc., are called ____________ risks.
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property
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Defective house wiring is an example of a
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hazard
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Possible losses due to negligence resulting in bodily harm or property damage to others are called ____________ risks.
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liability
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Starting a small business that may or may not succeed is an example of ___________ risk.
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speculative
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The legal responsibility for the financial cost of another person's losses or injuries is referred to as
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liability
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If a homeowner leaves toys on stairs that results in injury to a delivery person, this may be ruled as
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negligence.
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Negligence refers to
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failure to take ordinary and reasonable care.
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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(n) ____________ liability.
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vicarious
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The additional living expenses component of a home insurance policy is designed to
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pay for temporary housing while your home is repaired.
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Georgette Valentine has expensive photography equipment for use in her hobby. Which of the following coverages would pay for damage or theft of this equipment?
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a personal property floater
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The ____________ coverage of a home insurance policy would cover accidental damage to another person's property by a member of your family.
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personal liability
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An umbrella policy is designed to cover
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major personal liability suits.
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Most home insurance policies provide coverage for
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medical payments.
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Renter's insurance would include coverage for
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personal
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Which of the following are not covered by renter's insurance?
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fire damage of the building's roof
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Which form of homeowner's policy provides coverage for the most risks?
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special
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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.
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special
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Tara Guest owns a home in Edmond, Oklahoma. She is worried about a tornado causing damage to her home. The tornado is an example of:
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A peril
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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?
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$400
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Which of the following insurance policy provisions requires that the insured must pay for part of the loss of a claim if the property is not insured for the specified percentage of replacement value?
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coinsurance clause
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The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.
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actual cash value
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Home insurance costs are affected most directly by
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the number of claims in an area.
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Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay?
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$350
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The purpose of financial responsibility laws is to
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protect the public from financial losses due to auto accidents.
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The 100 in 100/300/50 refers to
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the limit for bodily injury claims that can be paid to one person.
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Henry Edwards was injured in an accident caused by another driver who did not have insurance. Henry's medical expenses would be covered by
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uninsured motorists protection.
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Which of the following is a system in which drivers involved in an accident collect medical expenses, lost wages, and related injury costs from their own insurance company?
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no-fault insurance
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Comprehensive coverage would cover financial losses due to
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damage to your car caused by wind or hail.
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Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $150,000, $75,000, and $75,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance?
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$50,000
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Your geographic location is a major factor in determining the ____________ used to calculate your automobile insurance premiums.
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rating territory
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Wind damage occurs to your car costing $800 to repair. If you have a $100 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay?
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$800
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Which of the following refers to a category based on age, sex, marital status, and driving habits that is used to set automobile insurance premiums?
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driver classification
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Which of the following factors is used to determine a person's driver classification?
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age
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The purpose of an assigned risk pool is to
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provide insurance for poor drivers.
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A system that requires each insurance company operating in a state to provide coverage to several individuals with poor driving records is referred to as
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an assigned risk pool.
