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Insurance Terminology TEST

Total questions: 30

Worksheet time: 15mins

Name
Class
Date
1.

Which of the following terms describes the scope of protection provided under an insurance policy?

a)

Coverage

b)

Premium

c)

Deductible

d)

Risk

2.

Which of the following terms describes the fee the policyholder pays to the insurance company in order to be insured for a defined period of time?

a)

Deductible

b)

Premium

c)

Policy

d)

Coverage

3.

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

a)

Coverage

b)

Policy

c)

Premium

d)

Deductible

4.

________ is the failure to take ordinary or reasonable care to prevent accidents from happening.

a)
Negligence
b)

Risk

c)

Peril

d)

Harzard

5.

Raul has a policy with his auto insurance company. A repair covered by the policy costing $1,500 would require him to pay $600 and then the insurance covers the remaining $900. What is another name for the $600 Raul must pay?

a)

Risk

b)

Deductible

c)

Premium

d)

Coverage

6.

How many price quotes should consumers compare in order to get a reasonable price?

a)

Two

b)

Three

c)

Four

d)

Five

7.

Insurance acts like a safety net for unforeseen events.

a)

True

b)

False

8.

Select all of the following which are important factors when setting insurance goals.

a)

Age

b)

Income

c)

Lifestyle

d)

Personality

9.

Select all of the following, which are important factors when choosing an insurance company.

a)

Financial solidity

b)

Licensing

c)

Location

d)

Price

10.

Which of the following government agencies can confirm whether an insurance company has a valid license?

a)

State Insurance Department

b)

National Association of Insurance Commissioners

c)

American Insurance Association

d)

Global Federation of Insurance Associations

11.

Extremely valuable personal property can be insured by purchasing which of the following types of insurance?

a)

Additional replacement cost coverage

b)

Dwelling coverage

c)

Personal property floater

d)

Green home coverage

12.

Which of the following types of insurance pays the costs of minor accidental injuries to visitors of the policyholder’s home?

a)

Umbrella policy

b)

Medical payments coverage

c)

Hospital indemnity plan

d)

Universal life insurance

13.

Select all of the following factors which affect home insurance prices.

a)

Coverage amount

b)

Home location

c)

Homeowner’s income

d)

Structure of the home

14.

Mortgage protection life insurance is a policy designed specifically to repay mortgage debt in the event of the death of the borrower.

a)

True

b)

False

15.

Felix’s home is less than 10 feet from the nearest water hydrant. As a result, his insurance costs less than those living further away. Which of the following factors are affecting Felix’s home insurance costs?

a)

Type of structure

b)

Location

c)

Coverage amount

d)

Policy type

16.

Insurance rates are lower in high-crime areas.

a)

True

b)

False

17.

A new home is more difficult to insure than an old one.

a)

True

b)

False

18.

Jennifer owns a wood home and pays higher insurance rates than her neighbor, who owns a brick home. Which of the following factors are affecting Jennifer’s home insurance costs?

a)

Type of structure

b)

Location

c)

Coverage amount

d)

Policy type

19.

Which of the following refers to the fact the policyholders are held responsible for any accident which occurs on their property?

a)

Coverage amount

b)

Specialized coverage

c)

HO-1

d)

Personal liability

20.

Homeowner’s insurance covers floods and frozen pipes.

a)

True

b)

False

21.

Automobile insurance is often required by which of the following types of laws?

a)

Passenger Carrier Regulations

b)

Federal Motor Vehicle Safety Standards

c)

Financial Responsibility Laws

d)

National Traffic and Motor Vehicle Safety Act

22.

Insurance that covers damage to the policyholder’s car when it is involved in an accident is:

a)

Collision Insurance

b)

Assigned Risk Pool

c)

Extended Warranty

d)

Comprehensive Insurance

23.

Some states have passed compulsory insurance laws requiring drivers to have ________.

a)

Liability insurance

b)

Personal injury insurance

c)

Responsibility insurance

d)

Simple insurance

24.

Which of the following types of insurance covers costs if an individual is involved in a car accident with an uninsured driver?

a)

Property damage liability

b)

Uninsured motorist protection

c)

Collision insurance

d)

Bodily injury liability

25.

Which of the following types of insurance is required when a car is financed or leased?

a)

Comprehensive insurance

b)

Bodily injury liability

c)

Medical payments coverage

d)

Property damage liability

26.

Jason’s car needs a $1,500 repair and he has a $100 deductible with his auto insurance. How much will the insurance pay for the repair?

a)

$100

b)

$750

c)

$1,400

d)

$1,500

27.

Allison’s insurance price decreased when she moved from the city to the country. Considering this example, the insurance price is affected by which of the following factors?

a)

Amount of coverage

b)

Vehicle type

c)

Rating territory

d)

Driver classification

28.

An imported car costs more to insure because it has more expensive replacement parts. Considering this example, the insurance price is affected by which of the following factors?

a)

Amount of coverage

b)

Vehicle type

c)

Rating territory

d)

Driver classification

29.

Which of the following types of insurance is applied when the policyholder damages the property of another person?

a)

Property damage liability

b)

Uninsured motorist protection

c)

Collision insurance

d)

Bodily injury liability

30.

Which of the following is a coverage payoff which provides coverage beyond a vehicle's actual cash value?

a)

Car loan payoff coverage

b)

Extended warranty

c)

Medical payments coverage

d)

Property damage liability