Insurance & Probability Unit Assessment

Which term refers to the maximum amount your insurance policy will pay out for covered claims in a given year?

• Premium

• Deductible

• Out-of-pocket maximum

• Coverage limit

The premium and the deductible for your renters insurance policy have an inverse relationship. What does that mean?

• If you pay a higher premium, you will receive a lower deductible

• If you pay a higher premium, you will receive a higher deductible

• If you pay a higher premium, your insurance company will pay a higher deductible

• If you pay a higher premium, it does not impact your deductible at all

Which of the following people is likely to have the LOWEST auto insurance premium?

• Mila: 25-year-old with an expensive car and no tickets

• Celine: 26-year-old with a cheap car and no tickets

• Jared: 27-year-old with a cheap car and 1 texting-while-driving ticket

• Theo: 32-year-old with an expensive car and 2 speeding tickets in the last year

List these amounts in order from least to greatest:

• Deductible, copay, out-of-pocket maximum

• Copay, deductible, out-of-pocket maximum

• Deductible, out-of-pocket maximum, copay

• Copay, out-of-pocket maximum, deductible

If Nessa buys an umbrella policy of $2 million, she will...

• Pay $2 million in premiums over her lifetime

• No longer need to buy separate auto or homeowners insurance

• Have $2 million extra liability coverage over the liability limits of her auto and homeowners insurance

• Use it to pay for unexpected health care expenses her family has

Which car insurance coverage do all states require?

• Liability coverage

• Collision coverage

• Comprehensive coverage

• Uninsured/underinsured coverage

What is a health insurance deductible?

• The amount you can deduct from your taxes due to having insurance coverage all year

• The fixed amount you need to pay for every medical claim before your insurance covers the rest

• The amount you can subtract from your premiums as long as you go without making an insurance claim

• The cumulative amount that you have to pay for medical costs before your insurance pays anything

Insurance companies operate by charging each insured individual regular premiums and then using the collected money to make payments when people file a claim (for example, someone is in an auto accident or needs to see a doctor). This concept is known as...

• Comprehensive coverage

• Risk pooling

• Underwriting

• Risk management

A standard renters insurance policy will pay for each of the following claims EXCEPT...

• A new roof for the building

• Replacement of the renter’s TV damaged by lightning strike

• A lawsuit from a guest injured at the renter’s home

• Repairs to the renter’s furniture damaged when a pipe burst