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Exam 10: Managing Property and Liability Risk

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Question 21

True/False

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Policy limits are the maximum dollar amounts that will be paid under the policy.

A) True
B) False

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Question 22

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Insurance is one of the least-understood purchases we make.

A) True
B) False

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Question 23

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is the auto insurance coverage that would yield the most significant savings if eliminated.

In no-fault states,the insurance company's rights to subrogate may be limited.

In order for a potential loss to be insurable it must be

Property insurance protects you from financial losses resulting from the damage to or destruction of your property or possessions.

To meet the replacement-cost requirement,a homeowner must insure his or her home for at least 80 percent of its replacement value.

Most insurance underwriting is done by the insurance company rather than the insurance agent.

Earthquake insurance is covered under the standard homeowner's insurance policies.

Always notify the police and file a report when involved in an auto accident.

Both property and liability insurance protect you from financial losses resulting from damage to or destruction of your property.

Your auto liability coverage will usually protect you for liability claims when you drive a rental car.

____ are independent business people who act as third-party links between insurers and insureds.

After purchasing a new computer,Sally met her friend Jason for lunch.On returning to her car,Sally discovered that her car had been broken into and her computer was gone.____ insurance will cover the damage to her car,and ____ insurance will cover the stolen computer. ​

Amy Lou Young purchased a health insurance policy with a $500 deductible and 40 percent coinsurance.If Amy Lou incurs $6,500 in covered medical expenses,her policy will pay

Subrogation rights allow an insurer to take action against a negligent third party (and that party's insurance company)to obtain reimbursement for payments made to an insured.

Dana Garcia has a renter's policy with a maximum limit for personal property of $30,000.When her apartment suffered fire damage,$15,000 of her personal property was destroyed.The insurance would pay no more than ____ in this case.

Insurance is designed to help people be better off after a loss than before the loss.

Buying an alarm system as an option on your new sports car is an example of​

The insurance will pay the lesser of either the value that the insurance company puts on the vehicle or repair cost a vehicle that has been in a collision.