Homeowner's and Renters Insurance

Abigail has a renters insurance policy with a coverage limit of $25,000. While she’s on vacation a fire breaks out, ruining $9,000 worth of possessions before the fire department puts it out. Her deductible is $500. How much will Abigail and the insurance company each pay?

• Abigail pays $0, while the insurance company pays $500

• Abigail pays $0, while the insurance company pays $9,000

• Abigail pays $500, while the insurance company pays $8,500

• Abigail pays $500, while the insurance company pays $24,500

What is the liability portion of a homeowners insurance policy meant to cover?

• The cost of a lawsuit if someone sues you for injuries they got on your property

• The cost of repairing the physical structure of your home

• The cost of floods and earthquakes not covered by a standard policy

• The cost of replacing personal property that you, yourself, damage within your home

If you rent your house, this is the type of insurance policy that provides payment to renters to cover the damage and loss of property in a rental unit in addition to liability losses.

• renters insurance

• homeowners insurance

• automobile insurance

Dwelling coverage does not generally cover which of the following:

• tornado

• fire

• flood

A deductible is . . .

• the amount that the insurance company pays

• the amount that the homeowner must pay

• neither of the above

If someone falls on your property, does your homeowners insurance cover that?

• yes

• no

The personal liability portion of your policy would protect against which one of the following?

• A visitor falls down the steps in your home breaking an ankle

• Someone breaks into your house and steals your tv.

• You get sick on some bad food you ate a restaurant earlier in the day.

• Your deck collapses

Jagger has an original Picasso painting stored in his home, how should he protect it?

• Add specialized coverage to your homeowners policy.

• It is covered under the personal liability coverage of his policy

• Wrap it in plastic and place it in a box.

• It falls under an additional living expense and is protected.

When you have a loan on your house, the bank will require you to have homeowners insurance. Why?

• Because until your loan is paid off, the bank is a part owner of the house and they want it to be protected.

• Because they don't want you to try to sue them if your stuff gets damaged.

• So you don't sue them if there is damage

If your home is paid off, you are not required to buy homeowners insurance. Should you still pay for it anyway?

• No, you can save yourself some money and if anything goes wrong, you can just fix it yourself.

• Yes, your home could be your biggest investment and it's best to keep it safe.

• Trick question. Once your loan is paid off your insurance is free.