U.E.T Taxila

COURSE TITLE : FREE 101

TRUE/FALSE QUESTIONS (1 TO 37)

Chapter 8

1)Insurance is protection against possible financial loss.

2. Samuel should buy insurance in order to eliminate his risk. .
3. An example of a peril is a robbery.
4. An example of a hazard is defective house wiring.
5. An example of a peril is defective wiring.

Defective wiring is a hazard.

6. Risk avoidance is an organized plan for protecting yourself, your family, and your property.

7. Risk management is an organized plan for protecting yourself, your family, and your property.

8. The first step to setting up an insurance program is to set insurance goals.
9. Jim and Sandy are setting up their insurance program. One of their goals should be to reduce the possible loss of income due to fire or theft.

10. An important question that should be asked when setting up an insurance program is: "What do I need to insure?"

11. Once a risk management plan is in place, the insurance programs that were set up should remain the same even as one's family needs change.

12. An insurance claim is a request for payment to cover financial losses.
13. Caroline was found liable in an accident. This was probably not due to negligence on her part.

14. A homeowner policy provides coverage for additional living expenses after a fire.
15. Homeowner's insurance excludes detached structures.

16. A household inventory should be stored in a home office.

17. Robby fell on a piece of ice on Peter's front steps and broke his arm. This is an example of a liability.

18. Another name for a homeowner's insurance policy is an umbrella policy.
19. The National Flood Insurance Program makes flood and earthquake insurance available for all homeowners.

20. A landlord is responsible for paying renter's insurance.

The renter is responsible.

21. Insurance coverage for a rental is more expensive than insurance coverage for a mobile home.

22. Mortgage lenders require that homeowners purchase home insurance.

23. Sam's house should be insured for the amount he originally paid for it.

24. The actual cash value method of settling claims is based upon the replacement cost of an item less depreciation.

25. A brick home should cost less to insure than a similar structure made of wood.
26. Angela should decrease her deductible from $1000 to $250 in order to reduce her home insurance premium

27. If you need information to compare Acme Home Insurance and Zebra Home Insurance, you should contact the state insurance commissioner or a consumer organization that deals with insurance.

28. Every state in the United States has a law requiring people to carry motor vehicle insurance.
29. Motor vehicle insurance falls into two categories: protection for bodily injury and protection for property damage

30. Uninsured motorist's protection automatically covers you and your family members as well as damage to the vehicle itself.

.

31. Collision insurance covers your vehicle against risks such as falling objects and hail.
32. Emergency road service coverage includes coverage for a tow to a service station as well as repairs to make the vehicle drivable.

.

33. If you drive a model of vehicle that is frequently stolen, you should expect to pay a higher premium for your auto insurance.

34. If you live in a city, you should expect to pay a higher premium for your auto insurance than someone who lives in a rural area.

35. An assigned risk pool is a method of calculating the insurance premiums for various groups of drivers.

36. It is illegal to use a credit score to determine the premium to charge an individual.

37. One way to keep auto insurance rates down is to insure each vehicle you own with a different insurer.

38. An individual who purchases insurance is
39. What is the fee that a policyholder pays when an insurance company agrees to take on the risk?
40. Insurance allows someone to
41. Barbara left a skateboard on her front steps. Her neighbor then tripped on the skateboard and was injured. The skateboard is a
42. Barbara left a skateboard on her front steps. Her neighbor then tripped on the skateboard and was injured. The fact that she didn't put away the skateboard is called
43. Barbara left a skateboard on her front steps. A windstorm then swept the skateboard up and through her window. The windstorm is a
44. The most common risks are
45. Anything that pay possibly cause a loss is called a
46. The failure to take ordinary or reasonable care to prevent accidents from happening is called

47. An insurance company will
48. Which of the following is NOT one of the commonly used general risk management techniques?
49. If you choose to avoid the risk of a traffic accident by not driving to work, you are using
50. If you choose to wear your seatbelt, you are using
51. If you choose to take responsibility for negative results of a risk, you are using
52. If you choose to insure your home or your vehicle, you are using
53. An insurance program
54. Which of the following questions should one ask when developing a risk management plan?

55. Which of the following is correct?
56. The two basic types of risk that people face regarding their personal property are
57. Liability is defined as:
58. Homeowner's insurance covers all except
59. Homeowner's insurance covers all excep

60. Homeowner's insurance covers all except
61. The best place to keep a household inventory is
62. All of the following are acceptable types of documentation for a household inventory except
63. Insurance that covers valuable items, such as an expensive harp, is called
64. Personal property insurance covers
65. Personal liability coverage does NOT protect
66. A policy that provides supplemental your basic personal liability coverage is called a(n)
67. When Stanley was visiting Elaine, he tripped on her front porch step and sprained his ankle. His injuries were covered by
68. If you have a loss due to a flood
69. Which of the following is NOT correct about renter's insurance?
70. Homeowner's insurance includes all of the forms listed except
71. Home insurance policies include coverage for all except
72. Vincent is applying for insurance for his new home. Which of the following is correct?

73. Yogi is applying for insurance for his new home. Which of the following is correct?
74. Zach is applying for insurance for his new home. Which of the following is most correct?
75. Andrew is applying for insurance for his new home. Which of the following is correct?
76. Barnaby is applying for insurance for his new home. Which of the following is correct?
77. Sandra is contacting several insurance companies to compare coverage for her home. Which of the

following should NOT affect her premium?

78. Cindy was contacted by her home insurance agent to discuss ways to decrease her premium.

Which of

the following should NOT reduce her premium?

79. Tom wanted to receive as many discounts from his home insurance as possible. Which of the following

80. Motor vehicle crashes cost more than                                      in lost wages and medical bills every year.
81. Amber had permission from Bradley to borrow his car to run some errands. Unfortunately, while Amber was driving, she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist. Based on her experience, which of the following would be ?

82. Motor vehicle coverage typically includes all except
83. Medical payments coverage applies to medical expenses of
84. Paul was driving his kids to a piano lesson in a 2005 minivan. While driving, he was hit by an uninsured motorist. Although Paul and his kids had only minor injuries, their vehicle was totaled. Based on this information, which of the following is correct?
85. Timothy was driving his friend Nick to football practice. While driving, he was hit by driver who had coverage of 100/300/50. Tim and Nick each suffered some physical injuries. Based on this information, which of the following is correct?

86. Sammy was driving on the highway and drove over a piece of metal that was on the highway. The metal punctured her gas tank. This damage would be covered under her
87. Madeline had a severe allergy attack and crashed her car into a telephone pole while sneezing. The damage to the telephone pole would be covered under Madeline's
88. Henry was driving at dusk and hit a deer running across the road. His damage would be covered under
89. Patrick has an old beater car and wants to keep his insurance costs down. In order to minimize the financial impact of an accident he may cause he should, at a minimum, carry which type of insurance?
90. Al left his vehicle parked on the street in the front of his house when he went on vacation. While he was

gone, his street flooded and his car was severely damaged. This damage would be covered under

91. Zachary lived in a neighborhood that was known for gang activity. One day, he noticed that his car had been vandalized. This damage would be covered under his
92. Various states are trying to reduce the time and cost of settling vehicle injury cases. One of those alternatives is
93. Which of the following is NOT a type of motor vehicle insurance available to drivers?

94. Which of the following is NOT correct?
95. Which of the following should reduce your auto insurance premium?
96. Cheyenne has a home insured for $400,000. It would cost $420,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70 percent of value, how much of her belongings would be covered?

97. Sally was driving her own car and collided with a pick-up truck. Sally sustained $150,000 in injuries and her passenger sustained $1,000 in injuries. If her coverage was 100/300/50, what are the total medical expenses the insurance company would pay for this accident?

98. Last month, some of your friends were injured in an accident. Their total injuries were as follows:

-Brenda - $75,000