Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Personal Finance > Chapter 10: Protecting your Property > Flashcards

Chapter 10: Protecting your Property Flashcards

You may prefer our related Brainscape-certified flashcards:
Series 65 flashcards Series 63 flashcards Series 66 flashcards Series 7 Top-off Exam flashcards SIE Exam flashcards CFA flashcards Series 79 Top-Off Exam flashcards
1
Q

insurance that guards against catastrophic losses of real and personal property caused by perils such as fire, theft, vandalism, wind storms, and other calamities.

A

property insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

insurance that offers protection against financial consequences that may arise from the insured’s responsibility for personal loss or personal injuries to others.

A

liability insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what are the 2 types of exposures?

A
  1. property losses
  2. liability exposures
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what 2 things must one do to obtain proper insurance to protect against property loss?

A
  1. inventory property
  2. identify perils
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

property inventory is important in case of loss because you must provide “proof of loss” to insurance companies.

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

fill out and safely stash away what form w/ accompanying photos as proof of property ownership?

A

a personal property inventory form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

it’s important to identify perils because…

A

insurance companies limit certain perils that will be covered.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

liability exposures mostly result from…

A

negligence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

liability insurance protects against losses and high legal fees in lawsuits that result.

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

principle where the insured must not be compensated by the insurance company in an amount exceeding the insured’s economic loss.

A

principle of indemnity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

when the policyholder causes losses to collect insurance payments, this is called…

A

moral hazard.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q
  1. actual cash value
  2. right of subrogation
  3. other-insurance clause

These are included in what principle?

A

principle of indemnity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

replacement cost - value of physical depreciation =

A

actual cash value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

allows insurance company to request reimbursement from person who caused loss or their insurance company after they pay out a claim to the one who lost.

A

right of subrogation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

states that if a person has more than one insurance policy on a property, each company is only responsible for a prorated amount of the loss based on its proportion of the total insurance covering the property.

A

other-insurance clause

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

requires policy holders to buy insurance in an amount equal toa specified percentage of the replacement value of their property.

A

co-insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

homeowner’s insurance policy that covers all perils expect those specifically excluded.

A

comprehensive policies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

homeowner’s insurance that names the particular perils covered.

A

named peril policies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

does Section I or Section II of homeowner’s insurance policies insure perils against which the home and its contents are protected?

A

section I

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

does Section I or Section II of a homeowner’s insurance policy include comprehensive personal liability coverage offers protection against personal liability resulting from negligence?

A

section II

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

premiums on homeowner’s insurance depend on:
1. structure type
2. location
3. credit score
4. extras: trampolines, dog, pool, etc.

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

the dwelling unit, accompanying structures, and personal property of the owner and their families, including lawn/plants and business property (up to $2,500) are all covered by…

A

homeowner’s insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

provides scheduled coverage of items not adequately covered in standard HO policy.

A

personal property floater (PPF)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

does an unscheduled or scheduled personal property floater provide maximum protection?

A

unscheduled PPF

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

does an unscheduled or scheduled personal property floater provide supplemental coverage?

A

scheduled PPF

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

what HO form is renter’s insurance on personal possessions of the renter inside the rented unit that provides coverage against HO-2 perils (common perils)?

A

HO-4 form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

which HO form is for owners of a condominium and provides a minimum of $1,000 of protection for building alterations?

A

HO-6 form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

pays actual costs of replacing articles w/ comparable ones.

A

replacement cost insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

what 3 types of losses are covered by homeowner’s insurance?

A
  1. direct property damage
  2. indirect loss
  3. additional expenses resulting from loss
30
Q

covers:
1. cost to defend insured
2. reasonable expenses incurred in helping insurance company’s defense
3. payment of court costs

These are covered by what type of insurance policy?

A

homeowner’s policy

31
Q

what persons are covered under homeowner’s insurance?

A

persons named in policy
residents
family members moved out (limited)
guests (limited)

32
Q

homeowner’s insurance provides worldwide coverage when off premises temporarily.

A

true

33
Q

amount needed to repair, rebuild, or replace an asset at today’s prices.

A

replacements cost

34
Q

Coverage A = 10-40%
Coverage B = 10%
Coverage C = 75%
Coverage D = 100%
Coverage E = $100,000
Coverage F = $1,000/person
Liability Coverage = $100,000+

these are the policy limits on homeowner’s insurance

A

true

35
Q

reduces insurance premiums by doing away w/ frequent, small-loss claims that are proportionally less expensive to administer.

A

deductibles

36
Q

percentage deductibles are more commonly used by insurance companies.

A

true

37
Q

what are the 2 types of deductibles?

A
  1. percentage
  2. named peril
38
Q

each type of property damage coverage is subject to $250+ deductible.

A

true

39
Q

adding an inflation rider, increased coverage of replacement value, scheduling items, increasing liability/medical payment limits all increase…

A

premiums.

40
Q

increase deductible to reduce…

A

premiums.

41
Q

a comprehensive auto policy that is easy to understand.

A

personal automobile policy (PAP)

42
Q

what are the 4 parts of a personal automobile policy (PAP)?

A
  1. Part A: liability coverage
  2. part b: medical payments coverage
  3. part c: uninsured motorists coverage
  4. part d: coverage for physical damage to vehicle
43
Q

insurance that pays for collision damage to insured automobile no matter who’s at fault.

A

collision insurance

44
Q

insurance that protects against loss to insured auto caused by any peril other than collision.

A

comprehensive automobile insurance

45
Q

insurance where each insured party is compensated by their own insurance company regardless of who is at fault.

A

no-fault automobile insurance

46
Q
  1. rating territory (geographic location)
  2. use of auto (mileage)
  3. driver’s personal characteristics (age, sex, marital status)
  4. auto type
  5. driving record
  6. personal credit history

These all influence what?

A

premiums

47
Q

what 2 things can be used to reduce car insurance premiums?

A
  1. discounts
  2. deductibles
48
Q

law requiring motorists to buy a specified minimum amount of auto liability insurance or provide other proof of financial responsibility.

A

financial responsibility laws

49
Q

laws that require motorists to show evidence of coverage before receiving license plates.

A

compulsory auto insurance laws

50
Q

financial responsibility laws require motorists to show coverage after they are involved in an accident.

A

true

51
Q
  1. earthquake insurance
  2. flood insurance
  3. transportation insurance

These are examples of supplemental property….

A

insurance.

52
Q

policy that provides added liability coverage for homeowner’s and auto insurance for mid- to high-level income/net worth people.

A

personal liability umbrella policy

53
Q

you should get insurance protection for losses that seldom occur, but are potentially substantial.

A

true

54
Q

insurance agent that represents 1 company.

A

captive agent

55
Q

insurance agent that represents 2-10 different companies.

A

independent agent

56
Q

who should? :
1. review total property/liability exposures
2. inventory property and identify exposures
3. determine appropriate covered perils, limits, deductibles, and floater policies.
4. have a CPCU or CIC designation

A

a good insurance agent

57
Q
  1. financial soundness of insurance company
  2. claim-settlement practices
  3. geographic range of operations

These are all topics you should discuss with?

A

your insurance agent

58
Q

What process is this? :
1. Record names, addresses, and phone numbers of all witnesses of accident w/ license plates
2. notify law enforcement and insurance company/agent
3. insurance company investigates
4. show proof of loss (sworn statement)
5. insurer will decide whether they have an obligation to cover the damage

A

settling claims (process)

59
Q

when both the insured and insurer bring a 3rd party to solve the dispute on the company’s responsibility to cover damage, they must use…

A

arbitration.

60
Q

an insurance specialist who works for the insurance company as an employee, independent adjustor, or for an adjustment bureau.

A

claims adjustor

61
Q

whose job is to diligently question/investigate an insurance claim while offering services to minimize settlement delays and financial hardship.

A

claims adjustor

62
Q

when insuring property people need to consider not only replacing and restoring actual property in the event of loss, but also the liability arising from the insured’s…

A

responsibility for property loss.

63
Q

auto insurance is needed primarily as protection against the cost of significant…

A

loss.

64
Q

the reimbursement of the cost of repairing or replacing damaged structures without deducting depreciation.

A

replacement-cost coverage

65
Q

a liability suit could result against you if your dog bits your neighbor.

A

true

66
Q

For what 2 reasons does it pay to comparison shop insurance policies?

A
  1. large variation in premiums
  2. large variation in services
67
Q

even though homeowners are eligible for reimbursement on a full replacement-cost basis if they keep their home insured for at least 80% of the amount it would cost to build them today, inflation can cause the actual amount of coverage to fall…

A

below 80%.

68
Q

a higher insurance cost may result from a low credit score of the insured.

A

true

69
Q

standard homeowner’s policies won’t include coverage for damage done by flood.

A

true

70
Q

what does a $300,000/$500,000 bodily injury liability auto policy pay as a total to all injured victims in one accident?

A

$500,000

71
Q
A

Personal Finance (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions