UGBA 135 BOARD EVALUATION 2026
GUARANTEED PASS ANSWERS GRADED A+
● When insurance is necessary. Answer: When losses are unlikely but
catastrophic and cannot be self-insured
● Self-insure. Answer: Paying losses yourself using savings rather than
buying insurance
● Insurance premium. Answer: The cost paid to maintain insurance
coverage
● Deductible. Answer: Fixed amount you must pay out-of-pocket before
insurance begins paying
● Catastrophic loss. Answer: A large financial loss that could cause
bankruptcy or major hardship
● Emergency fund. Answer: Savings used as first defense for moderate
financial problems instead of credit cards
● Small losses. Answer: Not worth insuring because premiums and
profits exceed expected benefits
, ● Extended warranties. Answer: Generally overpriced insurance on
small electronics and appliances
● Why not insure small losses. Answer: You lose money over time due
to insurer overhead and profit
● Vacation insurance. Answer: Often unnecessary unless loss would
cause major hardship
● Ways to lower insurance premiums. Answer: Shop multiple quotes,
raise deductible, keep policies simple
● High deductible strategy. Answer: Lowers premiums while keeping
protection for major losses
● Umbrella insurance. Answer: Extra liability coverage beyond
auto/home; unnecessary unless net worth exceeds ~$500k-$1M
● Risk pooling. Answer: Many people pay premiums so losses of the
few are covered
● Correlated risk. Answer: Many losses occurring at the same time
(floods, earthquakes, pandemics)
GUARANTEED PASS ANSWERS GRADED A+
● When insurance is necessary. Answer: When losses are unlikely but
catastrophic and cannot be self-insured
● Self-insure. Answer: Paying losses yourself using savings rather than
buying insurance
● Insurance premium. Answer: The cost paid to maintain insurance
coverage
● Deductible. Answer: Fixed amount you must pay out-of-pocket before
insurance begins paying
● Catastrophic loss. Answer: A large financial loss that could cause
bankruptcy or major hardship
● Emergency fund. Answer: Savings used as first defense for moderate
financial problems instead of credit cards
● Small losses. Answer: Not worth insuring because premiums and
profits exceed expected benefits
, ● Extended warranties. Answer: Generally overpriced insurance on
small electronics and appliances
● Why not insure small losses. Answer: You lose money over time due
to insurer overhead and profit
● Vacation insurance. Answer: Often unnecessary unless loss would
cause major hardship
● Ways to lower insurance premiums. Answer: Shop multiple quotes,
raise deductible, keep policies simple
● High deductible strategy. Answer: Lowers premiums while keeping
protection for major losses
● Umbrella insurance. Answer: Extra liability coverage beyond
auto/home; unnecessary unless net worth exceeds ~$500k-$1M
● Risk pooling. Answer: Many people pay premiums so losses of the
few are covered
● Correlated risk. Answer: Many losses occurring at the same time
(floods, earthquakes, pandemics)
