Chp 14 Risk Management and Home and Auto Insurance Lesson

Chp 14 Risk Management and Home and Auto Insurance Lesson

By Carly Jorgensen

Multiple Choice

Which of the following best represents an example of a speculative risk, which is a risk that may result in either financial loss or financial gain.

• texting while driving

• buying stock in a company

• a tornado touching down

• disability of a family member

Multiple Choice

Process of measuring risk and finding ways to minimize or manage loss.

• insurance

• financial services

• risk management

• avoidance

Multiple Choice

What are the four common methods of risk management?

• avoid, reduce, transfer, assume

• identify, assess, avoid, transfer

• transfer, reduce, identify, analyze

• avoid, assess, assume, analyze

Multiple Choice

What is the main purpose of insurance?

• To eliminate having to pay for anything in the event of an accident.

• To provide protection against specific types of financial losses.

• To guarantee 100% reimbursement in the event of a loss.

• To allow people to do whatever they want without being held accountable.

Multiple Choice

The amount the insured is responsible for paying when a claim is made is the ___________________.

• claim

• depreciation

• deductible

• policy

Multiple Choice

An amount the insured pays for an insurance policy, usually monthly.

• Deductible

• Premium

• Claim

• Coverage

Multiple Choice

An insurance _________ is a legally binding contract between an insurance company and the person who buys the policy, commonly called the "policyholder", who also is often the person insured.

• Liability

• Claim

• Premium

• Policy

Multiple Choice

Which of the following is true regarding insurance?

• The type and amount of insurance needed varies depending on the person buying it.

• Generally, automobile insurance is included when homeowners insurance is purchased.

• Having insurance guarantees 100% reimbursement in all accidental situations.

• The price of an insurance policy is the only factor to consider when purchasing

  insurance.

Multiple Choice

Homeowners insurance provides what two basic types of coverage?

• uninsured protection and umbrella coverage

• umbrella coverage and property protection

• property protection and liability protection

• liability protection and underinsured coverage

Multiple Choice

Insures the policyholder against financial loss due to damage to or loss of a dwelling and personal property and possessions.

• property insurance

• automobile insurance

• bodily injury liability insurance

Multiple Choice

If you live in a rented apartment, what form of insurance would cover your belongings?

• Homeowner's insurance

• Renter's insurance

• Life Insurance

• Health Insurance

Multiple Choice

Automobile insurance covers passenger vehicles and protects the beneficiary against the financial aspects of a ____________.

• traffic accident

• liability risk

• illness or injury

• home

Multiple Choice

Coverage that protects the person who is responsible for an auto accident that results in the injury or death of others.

• automobile insurance

• bodily injury liability insurance

• property damage liability insurance

Multiple Choice

Which of the following does not impact how much you pay for auto insurance?

• your job

• your personal information

• your vehicle

• your driving record

Multiple Choice

If your deductible is $500 and you had an accident that will cost $2,130 to repair your vehicle, how much will you pay for the repairs?

• $2,130

• $500

• $1000

• $1,630