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Exam 10: Protecting Your Property

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Question 31

Multiple Choice

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Section I of the homeowner's insurance policy covers

A) the home only.
B) the house and the garage.
C) negligence of an insured.
D) the home and its contents.
E) negligence and the house.

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Question 32

Multiple Choice

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Who is covered under medical payment coverage of your automobile policy?

A) Your daughter's friends riding in your car.
B) The driver of the car you hit.
C) The pedestrian you hit while crossing the street..
D) a and c
E) all of the above

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Question 33

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Automobile liability claims could potentially be more costly to you than car damage claims.

The Thomson's house burned to the ground! They felt they were adequately covered (see coverage below) .Their car (market value $10,000) was in the garage and totally destroyed.How much will the Thompsons be reimbursed for their home?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -The Principle of [Indemnity | Peril] states that the insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss.

Coinsurance is a policy provision to discourage the policyholder from being

Other-insurance clauses help prevent the violation of the principle of indemnity.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Actual cash value (ACV)is calculated by subtracting depreciation from the [purchase price | replacement cost] of an item.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Negligent acts must be [intentional | unintentional] in order to be insured.

The principle of indemnity generally limits the amount that the insured may collect to the actual cash value of the property.

Common types of property that are subject to internal limits on homeowner's policies include

HO-4 and HO-6 are for renters and owners of condominiums,respectively.

The Right of Subrogation allows the insured to get reimbursed for claims paid.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Earthquake policy and flood protection [would | would not] be provided by the standard HO policy.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Research shows that people with [lower | higher] credit scores tend to file more insurance claims.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -To save HO insurance premiums,experts recommend that you should decrease your [deductible | liability coverage].

Section II of a homeowner's insurance policy covers personal property and personal liability.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Your house has a replacement value of $120,000.Your HO policy has an 80% co-insurance clause.In order to receive full compensation if your house is totally destroyed,you must carry insurance for [$96,000 | $120,000].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.1779:1779 -Medical payments coverage [would | would not] pay for the medical bills of passengers in your car who are not related to you.

You just purchased an older home with a market value of $100,000 and a replacement value of $180,000.What HO form would meet your needs?