Chapter 10 Review: Property and Motor Vehicle Insurance

The purpose of insurance is to help protect you and your family against possible financial loss.

• True

• False

An umbrella policy provides additional personal liability coverage beyond the basic amounts in most homeowner policies.

• True

• False

A home made of wood is more expensive to insure than a comparable brick structure.

• True

• False

No-fault insurance systems always reduce the time and costs involved in settling auto injury claims.

• True

• False

Starting a small business that may or may not succeed is an example of ________ risk.

• speculative

• pure

• personal

• liability

Wearing a seat belt in an automobile to protect yourself against the risk of injury in an automobile accident is an example of risk ________.

• shifting

• reduction

• avoidance

• pooling

The legal responsibility for the financial cost of another person's losses or injuries is referred to as:

• theft.

• robbery.

• liability.

• collusion.

Which of the following is considered personal property for home insurance coverage?

• Automobile

• Shrubs and trees

• Furniture

• Garage

An umbrella policy is designed to cover:

• expensive personal property.

• additional buildings on your property.

• major personal liability claims.

• flood damage.

Renter's insurance would include coverage for:

• flood damage.

• personal property.

• house and other structures.

• umbrella liability.