Final Exam Review (May 2026)

What is an insurance premium?

• Your monthly payment to your insurer, regardless of whether you use any services.
• A list of procedures covered by your insurance.
• 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.

Which of the following statements is TRUE about auto insurance premiums?

• If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company.
• If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease.
• Auto insurance premiums are a fixed price across all insurance companies.
• If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will increase.

Which of the following terms describes the portion of a claim the policyholder must pay before the insurance company provides the benefits?

• Coverage
• Premium
• Policy
• Deductible

Someone broke into Casey's car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?

• Bodily injury liability
• Comprehensive
• Property liability
• Collision

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

• The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals.
• The company looks at the individual's tax filings from the previous year to assess overall wealth and ability to pay.
• The company charges the same premium for every individual eligible for coverage.
• The company increases or decreases premium rates based on the stock market.

A standard renters insurance policy would cover each of the following EXCEPT...

• A small TV and some sneakers, stolen in a robbery.
• A new window when a baseball breaks the original one.
• A lawsuit brought when a visitor hits their head on a low hanging light fixture.
• A week of hotel reservations when the tenant has to move out due to fire damage.

Which type of auto insurance is required by the state of Texas?

• Comprehensive
• Liability
• Dental
• Collision

Which of the following types of insurance will repair your car if you are involved in a car accident with an uninsured driver?

• Uninsured motorist protection
• Property damage liability
• Collision insurance
• Rental insurance

The purpose of insurance is to...

• manage assets.
• build wealth.
• build relationships.
• transfer risk.

The amount you pay to buy an insurance policy is called a ___.

• deductible.
• co-pay.
• premium.
• out-of-pocket maximum.