Personal Finance: Insurance

Homeowners insurance provides what two basic types of coverage?

• uninsured protection and umbrella insurance

• umbrella coverage and property protection

• property protection and liability protection

• liability protection and under-insured coverage

Which of the following best represents an example of a speculative risk?

• texting while driving

• buying stock in a company

• a tornado touching down

• disability of a family memeber

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 ll accidental situations.

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

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.

David purchased a brand-new television six years ago for $1,200. This year, a fire occurred in his house and damaged his television. IF Davis' property is insured for replacement value, what will he likely receive?

• A check for $500, which is the depreciated value.

• A check for the amount of a television of comparable quality.

• Nothing.

• An exact replacement TV from the same manufacturer.

Contract that defines the type of losses that are covered, amount of coverage in dollars, and other conditions to which the two parties agree.

• Insurance Policy

• Insurance Settlement

• Umbrella Policy

• Automobile Insurance

Eliminates the faultfinding process in settling claims.

• No-Fault Auto Insurance

• Threshold

• Insurance

• Insurance Settlement

Coverage for an insured person's car.

• Automobile Insurance

• Risk Management

• Pure Risk

• No-Fault Auto Insurance

Money paid by a insurance company.

• Umbrella Policy

• Insurance Settlement

• Insurance Claim

• Insurance Deductible

Maximum that can be paid by a insurance company in a no-fault policy.

• Threshold

• Max Endorsement

• Limited Funds

• Capacity Payout