FIN 138 EXAM 3 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Deductibles are requirements that the insured pay an initial portion of any loss. - Answers T
Risk is the uncertainty about whether a financial loss will occur and how large the loss will be. -
Answers T
Insurance can be purchased for a speculative risk but not for a pure risk. - Answers F
When shopping for insurance, your goal should be to "buy" what you need and not be "sold" more or
less coverage. - Answers T
An insurance rate - Answers all of these
____ insurance is required in most states. - Answers Automobile
What is the first step in the risk-management process? - Answers Identify sources of risk
Robert and Louisa have identified the following potential loss exposures, but they are not sure
whether they should purchase insurance to reduce these risks:
1.
Loss of their health, which could cause extensive medical bills and loss of income
2.
Loss to their car, which would cause automobile repair or replacement
3.
Liability claims related to their car, which could require them to pay for other person's losses
When Robert and Louisa prioritize their insurance choices, ____ would be categorized as important,
but not necessary. - Answers auto collision and comprehensive insurance
The reduction of risk that occurs with purchasing insurance is primarily due to the - Answers law of
large numbers
The primary difference between a speculative risk and a pure risk is that there is a chance for ____ in
a speculative risk but a chance for ____ in a pure risk. - Answers gain and loss, only loss
Risk management is the process of identifying and evaluating situations involving speculative risk to
determine and implement the appropriate means for its management. - Answers T
Buying insurance is the preferable way to handle risk for nearly all potential losses faced. - Answers F
All insurance is sold and serviced through insurance agents. - Answers T
In insurance, risk is defined as the ____ a financial loss will occur. - Answers uncertainty about
whether
Which of the following is a not peril? - Answers smoking
The loss of property itself, extra expenses that may arise because the property is unusable for a
period of time, and loss of income if the property was used in the insured's work are all types of ____
losses. - Answers property
Which of the following HO forms is especially written renters? - Answers HO-4
The principle of indemnity is very difficult to apply to ____ insurance. - Answers life
If a homeowner is considering insuring the home computer used in his or her home office, which of
the following losses should be identified and evaluated? - Answers all of these
When trying to save money on automobile insurance it is better to select a higher deductible than to
lower your liability coverage limits. - Answers T
Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost. -
Answers T
Most of the HO forms of homeowner's insurance policies provide all-risk protection on the house and
named-peril protection on the personal property. - Answers F
The type(s) of insurance you carry but which covers losses suffered by others is called ____ insurance.
- Answers liability
Deductibles are requirements that the insured pay an initial portion of any loss. - Answers T
Risk is the uncertainty about whether a financial loss will occur and how large the loss will be. -
Answers T
Insurance can be purchased for a speculative risk but not for a pure risk. - Answers F
When shopping for insurance, your goal should be to "buy" what you need and not be "sold" more or
less coverage. - Answers T
An insurance rate - Answers all of these
____ insurance is required in most states. - Answers Automobile
What is the first step in the risk-management process? - Answers Identify sources of risk
Robert and Louisa have identified the following potential loss exposures, but they are not sure
whether they should purchase insurance to reduce these risks:
1.
Loss of their health, which could cause extensive medical bills and loss of income
2.
Loss to their car, which would cause automobile repair or replacement
3.
Liability claims related to their car, which could require them to pay for other person's losses
When Robert and Louisa prioritize their insurance choices, ____ would be categorized as important,
but not necessary. - Answers auto collision and comprehensive insurance
The reduction of risk that occurs with purchasing insurance is primarily due to the - Answers law of
large numbers
The primary difference between a speculative risk and a pure risk is that there is a chance for ____ in
a speculative risk but a chance for ____ in a pure risk. - Answers gain and loss, only loss
Risk management is the process of identifying and evaluating situations involving speculative risk to
determine and implement the appropriate means for its management. - Answers T
Buying insurance is the preferable way to handle risk for nearly all potential losses faced. - Answers F
All insurance is sold and serviced through insurance agents. - Answers T
In insurance, risk is defined as the ____ a financial loss will occur. - Answers uncertainty about
whether
Which of the following is a not peril? - Answers smoking
The loss of property itself, extra expenses that may arise because the property is unusable for a
period of time, and loss of income if the property was used in the insured's work are all types of ____
losses. - Answers property
Which of the following HO forms is especially written renters? - Answers HO-4
The principle of indemnity is very difficult to apply to ____ insurance. - Answers life
If a homeowner is considering insuring the home computer used in his or her home office, which of
the following losses should be identified and evaluated? - Answers all of these
When trying to save money on automobile insurance it is better to select a higher deductible than to
lower your liability coverage limits. - Answers T
Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost. -
Answers T
Most of the HO forms of homeowner's insurance policies provide all-risk protection on the house and
named-peril protection on the personal property. - Answers F
The type(s) of insurance you carry but which covers losses suffered by others is called ____ insurance.
- Answers liability
