FHCE FINAL EXAM QUESTIONS AND ANSWERS FULLY SOLVED LATEST UPDATE

FHCE FINAL EXAM QUESTIONS AND ANSWERS FULLY SOLVED LATEST UPDATE property insurance - Answers What is coverage that protects real and personal property from catastrophic losses? liability insurance - Answers protects against the financial consequences from the insured's responsibility for property losses or injuries to others peril - Answers the cause of a loss; ex. tornado, fire, negligence negligence - Answers failure to act in a reasonable amount of time or to take necessary steps to protect others from harm deductibles - Answers limit what a company must pay for small losses replacement cost - Answers the amount necessary to repair, rebuild, or replace an asset at today's prices premiums - Answers the monthly payment you must pay for insurance coverage homeowners insurance policies - Answers cover multiple types of perils and are sold in six basic versions 6 versions of homeowners insurance - Answers HO-1 Basic form HO-2 Broad form HO-3 special form HO-4 renter's insurance HO-6 Condo owner's insurance HO-8 Modified coverage- older homes insurance HO-1 Basic Form Homeowner's insurance - Answers provides the most limited coverage, $15,000 minimum coverage. covers- fire lightning tornados explosions riots vandalism theft and volcanic eruptions HO-2 Broad Form Homeowner's insurance - Answers covers only named perils (like weight of snow, freezing, falling object) costs about 5-10% more than basic HO-3 special form Homeowner's insurance - Answers covers all direct physical losses to your home, exceptions include floods, wars, earthquakes and nuclear accidents. costs 10-15% more than basic coverage HO-4 renter's or tenants insurance - Answers coverage is equivalent to HO-2 perils. available only to renters. covers personal property rather than dwelling. Provides liability coverage in case an accident, causing damage, is your fault. HO-6 condo owner's insurance - Answers similar to HO4 coverage, same perils as HO2. available to co-op and condo owners. also covers improvements you have made to the dwelling unit HO-8 Older homes homeowner's insurance - Answers similar to HO1 insurance or named perils. Insures the dwelling for the repair cost or market value instead of the replacement value. specifically for older homes Section 1: Property Coverage : coverage A dwelling - Answers protects the dwelling and any attachments, does not cover any damage to the land Section I: Property Coverage B: Other Structures - Answers protects other unattached dwellings on the property, covers landscaping and buildings, does not cover structures used for business purposes Section I: Property Coverage C: Personal Property - Answers covers all personal property owned or used by the policy holder, covers personal property regardless of location, covers property of guests in your home Section I: Property Coverage D: Loss of Use - Answers covers losses incurred as a result of your home being uninhabitable Section II: Personal Liability Coverage - Answers protects the policyholder in case someone is injured on their property, does not cover business or professional liability or negligence. minimum level of coverage is $100,000. medical parents to others covers small medical expenses up to $1,000 per person auto liability insurance - Answers every state requires you to have what type of auto insurance? comprehensive (full coverage) - Answers applies when your vehicle is encumbered by a loan, you must insure against liability and for the value of the vehicle itself Personal Automobile Policy Part A: Liability Coverage - Answers covers bodily injury losses and property damage losses, can be a combined single limit or a split limit coverage, covers losses due to a lawsuit, most states require a minimum coverage Auto Liability Split Coverage Insurance Limits - Answers $100k of bodily injury liability coverage per person, $300k of bodily injury liability coverage for each accident, $50k of property damage liability coverage Auto Liability Combined Single Limit Insurance ($100,000) - Answers total liability insurance regardless of how many ppl involved in an accident Personal Automobile Policy Part B: Medical Expenses Coverage - Answers covers all reasonable medical costs and funeral expenses incurred by the insured or the insured's family members within 3 yrs of accident. Recommended coverage of $50,000 Personal automobile policy part C: uninsured motorist's protection - Answers provides coverage if injured by an uninsured motorist or hit and run driver. The other driver must be at fault to collect on this coverage. Also covers costs in excess of the other driver's liability coverage, if inadequate to pay your losses Personal automobile policy part D: comprehensive physical damage coverage - Answers covers collision loss other that collision or comprehensive physical damage. Collision covers regardless of fault if the other driver was at fault and has liability you should be able to recover losses without collision coverage no- fault insurance - Answers only available in "no fault" states. Your insurance pays for your losses and their insurance pays for their losses- no legal battles gap insurance - Answers coverage that pays for the difference between the vehicles value and what you may still owe on the loan the insurance industry - Answers over one million people are employed by 35,000 insurance companies. Almost 1/12 dollars spent in the US economy goes towards insurance risk - Answers uncertainty with respect to economic loss. the possibility of experiencing harm, suffering, danger or loss is known as risk risk aversion theory - Answers rational people will try to reduce or avoid risk and risk is