Insurance Basics Quiz
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Questions and Answers

What does liability insurance cover?

  • Damage or injury you cause to others (correct)
  • Damage or injury caused by natural disasters
  • Damage or injury to your own vehicle
  • Damage or injury caused by theft

    • What is the purpose of an insurance premium?

  • To cover the administrative costs of the insurance company
  • To generate profit for the insurance company
  • To provide financial protection against losses (correct)
  • To compensate for uninsured losses

    • What is a deductible in insurance?

  • The amount the insurance company charges for providing coverage
  • The maximum amount the insurance company will pay for a claim
  • The percentage of the claim that the policyholder is responsible for
  • The amount the policyholder pays before the insurance coverage kicks in (correct)

    • True or false: Insurance is a form of risk management to help protect against financial loss.

    <p>True</p> Signup and view all the answers

    True or false: Insurance provides a guarantee of complete protection against all potential risks.

    <p>False</p> Signup and view all the answers

    True or false: Home insurance covers damage caused by natural disasters such as earthquakes and floods.

    <p>False</p> Signup and view all the answers

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