Question 1. _____ risks refer to potential losses due to negligence resulting in bodily harm or property damage to others.
Speculative
Liability
Property
Personal
Commercial

Question 2. If you decide to install a new home security system with cameras, this is an example of _____ risk.
shifting
accepting
transferring
sharing
reducing

Question 3. The failure to take ordinary and reasonable care is referred to as
negligence.
a benefit.
damage.
high risk.
a hazard.

Question 4. If a worker damages your home while painting several rooms, and you take action against the worker's employer to cover the cost of the damage, this is an example of a(n) _____ liability.
umbrella
vicarious
common situation
peril
assigned

Question 5. Which of the following is not considered personal property for home insurance coverage?
An automobile
A garage
Furniture
Appliances
A permanently installed air conditioning unit

Question 6. State Farm has provided a quote to you for an umbrella policy. This type of policy provides coverage for
expensive personal property.
additional buildings on your property.
property when traveling away from home.
major personal liability suits.
flood damage.

Question 7. When obtaining a home insurance policy, you will find that most will already provide coverage for
earthquake damage.
flood damage.
medical payments.
personal property floaters.
an umbrella liability.

Question 8. If claims need to be settled based on the current replacement cost of a damaged or lost item less depreciation, then the _____ method should be used.
replacement value
actual cash value
umbrella
endorsement
personal property floater

Question 9. Your home insurance policy has a $250 deductible. If a small fire causes $900 of damage to your home, what amount of the claim would the insurance company pay?
$250
$0
$900
$650

Question 10. _____ coverage pays for medical care for people who were injured in your automobile.
Comprehensive
Bodily injury liability
Collision
Medical payments
No-fault insurance

Question 11. The 50 in 100/300/50 refers to _____ coverage.
collision
bodily injury liability
property damage liability
medical payments
comprehensive physical damage

Question 12. If Lisa Johnson is in an accident and the other driver is legally at fault, _____ coverage would pay for damage to her vehicle.
uninsured motorists protection
collision
comprehensive physical damage
property damage liability
assigned risk

Question 13. Individuals and families purchase life insurance primarily to
pay liability claims resulting from accidents.
fill financial needs created by the loss of the breadwinner.
fund lavish retirement vacations.
keep up with people with a similar financial situation.
make early retirement possible.

Question 14. You probably have little or no need for life insurance if you are
a single person living alone or with parents.
divorced and have two children.
married and your spouse works.
gainfully employed.
a household with several children.

Question 15. Your annual income is $50,000. What is your life insurance need based on the easy method?
$245,000
$300,000
$345,000
$400,000
$450,000
Insurance need = $50,000 x .7 x 7 = $245,000

Question 16. Which type of insurance is sometimes called temporary insurance?
Whole life
Term
Straight life
Ordinary life
Modified life

Question 17. All of the following are innovative ways that concerned groups are containing healthcare costs except for
the establishment of incentives to encourage preventive care.
encouraging the use of prepaid group practices.
the establishment of community education programs so people can learn to take better care of themselves.
encouraging doctors to pay cash for routine medical costs.
picketing at hospitals and physician offices.

Question 18. In order to reduce your healthcare costs, you should do your best to
live dangerously.
gain a little extra weight.
smoke and drink.
stay well.
not seek medical care.

Question 19. Because coverage and costs can vary from company to company, it is important to shop carefully for _____ coverage.
group health
individual health
hospital expense
surgical expense
physician's expense

Question 20. A(n) _____ policy might not cover all of your health insurance needs or may deny benefits if you lose your job.
comprehensive medical
individual health
basic health
group health
disability income