Insurance Quiz

What is an insurance premium?

• The amount you pay to have insurance, regardless of whether you use any services

• A list of the procedures covered by your insurance carrier

• An added cost you pay in order to receive higher quality services

• The amount you pay out-of-pocket for a specific procedure or service

Insurance companies make money by...

• Refusing to pay out claims to policyholders

• Collecting money from the government

• Collecting more in premiums than they need to pay out each year

• Keeping costs low with minimal advertising

Insurance companies charge individuals different prices for coverage depending on their risk levels. Then, they collect all of the premiums together and use the money to make payments when policyholders file claims. This concept is known as...

• Comprehensive coverage

• Risk pooling

• Underwriting

• Risk management

A person who buys insurance, may also be called the insured or a...

• Beneficiary

• Policy Holder

• Provider

• Trustee

Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?

• Health Insurance

• Auto Insurance (if they have a car)

• Life Insurance

• Renter's Insurance (if they rent)

In general, how do insurance companies decide how much to charge an individual for their monthly premiums?

• They assess the individual's risk factors and assign higher premiums to higher risk individuals

• They look at the individual's tax filings from the previous year to assess overall wealth and ability to pay

• They charge the same premium for every individual eligible for coverage

• They increase or decrease premium rates based on the stock market

What type of auto insurance are you required to carry in almost every state?

• Collision Insurance

• Liability Insurance

• Uninsured Motorist Insurance

• Comprehensive Insurance

When setting your premium, your auto insurance company may consider each of the following EXCEPT...

• How many miles you drive per year

• Your age

• Your driving record

• Your ethnicity

Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance covers this damage?

• Collision Insurance

• Liability Insurance

• Uninsured Motorist Insurance

• Comprehensive Insurance

What kind of automobile insurance provides protection to the policyholder if he or she is injured by a driver that does not possess car insurance?

• Liability insurance

• Uninsured motorist’s protection

• Collision insurance

• Comprehensive insurance