Risk Management

1. Which of the following doesn’t affect auto insurance premiums:

• Vehicle make and model, for example, truck versus sports car, etc.

• Whether the vehicle is stolen more than others

• Installed safety equipment

• Fuel efficiency

1. Which of the following could cause your premiums to increase?

• Moving to a larger, more expensive city

• Taking a defensive driving course

• Both a and b.

1. TRUE or FALSE: Your school grades may influence your auto premiums.

• TRUE

• FALSE

1. TRUE or FALSE: Using your vehicle for weekly recreation and not for a daily commute may lower your auto premiums.

• TRUE

• FALSE

1. You left the water running and your bathtub overflowed. The water also flooded the condo unit below yours and damaged your neighbor’s property. Your policy…

• Only takes care of damage to your property, not your neighbor’s

• Covers damage to your property and damage to your neighbor’s property.

• Doesn’t cover any of the damages

You are cooking dinner and there is a small grease fire in your kitchen. There is a lot of damage in the kitchen. What type of insurance do you need?

• auto insurance

• homeowners insurance

• disability insurance

• liability insurance

You break your arm playing football. You require an emergency room visit and surgery to repair the damage. What type of insurance do you need?

• health insurance

• homeowners insurance

• renters insurance

• long term care insurance

Your father expresses concern about how your mother will pay the bills in the event of his death. What type of insurance is needed?

• health insurance

• disability insurance

• life insurance

• long term care insurance

Your apartment you rent catches on fire. The firefighters put it out and saved most of your stuff. However, most of the furniture is destroyed and there are a lot of repairs needed to the apartment. What type of insurance is needed?

• life insurance

• homeowners insurance

• renters insurance

• health insurance

Risk has three components. Which of the following is NOT a component?

• An event that might cause harm

• An undesirable outcome

• Insurance with liability

• Probability: What are the changes this will happen?