Insurance Basics Quiz

Policyholder = A person who owns an insurance policy Peril = The cause of a possible loss, such as fire, windstorms, robbery Hazard = Something that increases the likelihood of a loss, such as driving drunk Premium = The amount of money a policy holder is charged for an insurance policy

Personal risks = Include loss of income and premature death Property risks = Involve direct damage of assets Liability risks = Result in loss due to injury or harm to others Speculative risk = Involves chances of loss or gain and is uninsurable

Risk avoidance = To avoid the chance of loss altogether Risk reduction = To reduce chances of a loss occurring Pure risk = A risk in which there is only a chance of loss (insurable) Speculative risk = The chance of loss or gain and uninsurable

<p>Step 1: Set and prioritize insurance goals = Plan to reduce the impact of various losses Step 2: Develop a plan to reach the goals = Think about relevant risks and how to handle them Step 3: Put plan into action = Implement the developed risk management plan Step 4: Review the results = Evaluate the outcomes of the risk management actions</p> Signup and view all the answers

<p>Liability protection = Responsibility for injuries to others and damage to others' property Negligence = Failure to take ordinary or responsible care Strict liability = Being held responsible for intentional or unintentional actions Vicarious liability = One person being responsible for the actions of another person</p> Signup and view all the answers

<p>Physical damage to a property and loss of use = Coverage for damage to property and inability to use it Personal articles endorsement = Coverage for specific personal belongings Umbrella policy = Supplements basic personal liability coverage Depreciated value = Reduction in value of an object based on age</p> Signup and view all the answers

<p>Rider = Used to add or remove coverage from a standard insurance policy Voluntary medical payments = Coverage for medical expenses of others due to your actions Replacement value of the home = Cost to rebuild a house after a covered event, not its market value Homeowners Insurance Coverage = Protection for a place of residence and its financial risks</p> Signup and view all the answers