Focus on Personal Finance - Chapters 8,
9, 10 Exam Questions and Answers
Graded A+
Insurance Company/Insurer - Correct answer-A risk-sharing firm that assumes
financial responsibility for losses that may result from an insured risk
Claim - Correct answer-A request for payment to cover financial losses
Assigned Risk Pool - Correct answer-Consists of people who are unable to obtain
automobile insurance due to poor driving or accident records and must obtain
coverage at high rates through a state program that requires insurance companies to
accept some of them
Endorsement - Correct answer-An addition of coverage to a standard insurance
policy
Peril - Correct answer-The cause of a possible loss (fire, windstorms, explosions,
robbery, accidents)
Insurer - Correct answer-An insurance company
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Deductible - Correct answer-The set amount that the policyholder must pay per
loss on an insurance policy
Personal Property Floater - Correct answer-Additional property insurance to cover
the damage or loss of a specific item of high value
Hazard - Correct answer-A factor that increases the likelihood of loss through some
peril
Risk - Correct answer-Chance or uncertainty of loss; also used to mean "the
insured"
Actual Cash Value (ACV)
DO NOT WANT - Correct answer-A claim settlement in which the insured
receives payment based on the current replacement cost of a damaged or lost item,
less depreciation
Bodily Injury Liability - Correct answer-Coverage for the risk of financial loss due
to legal expenses, medical costs, lost wages, and other expenses associated with
injuries caused by an automobile accident for which the insured was responsible
Premium - Correct answer-The amount of money a policyholder is charged for an
insurance policy
Insurance - Correct answer-Protection against possible financial loss
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, Policy - Correct answer-A written contract for insurance
Uninsured Motorists Protection - Correct answer-Automobile insurance coverage
for the cost of injuries to a person and members of his or her family caused by a
driver with inadequate insurance or by a hit-and-run driver
Negligence - Correct answer-Failure to take ordinary or reasonable care in a
situation
Insured - Correct answer-A person covered by an insurance policy
Homeowner's Insurance - Correct answer-Coverage for a place of residence and its
associated financial risks, Damages or destruction of the building in which you
live, and other structures on the property
Coverage - Correct answer-The protection provided by the terms of an insurance
policy
Umbrella Policy - Correct answer-Supplementary personal liability coverage; also
called a "personal catastrophe policy"
Financial Responsibility Law - Correct answer-State legislation that requires
drivers to prove their ability to over the cost of damage or injury caused by an
automobile accident
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
9, 10 Exam Questions and Answers
Graded A+
Insurance Company/Insurer - Correct answer-A risk-sharing firm that assumes
financial responsibility for losses that may result from an insured risk
Claim - Correct answer-A request for payment to cover financial losses
Assigned Risk Pool - Correct answer-Consists of people who are unable to obtain
automobile insurance due to poor driving or accident records and must obtain
coverage at high rates through a state program that requires insurance companies to
accept some of them
Endorsement - Correct answer-An addition of coverage to a standard insurance
policy
Peril - Correct answer-The cause of a possible loss (fire, windstorms, explosions,
robbery, accidents)
Insurer - Correct answer-An insurance company
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Deductible - Correct answer-The set amount that the policyholder must pay per
loss on an insurance policy
Personal Property Floater - Correct answer-Additional property insurance to cover
the damage or loss of a specific item of high value
Hazard - Correct answer-A factor that increases the likelihood of loss through some
peril
Risk - Correct answer-Chance or uncertainty of loss; also used to mean "the
insured"
Actual Cash Value (ACV)
DO NOT WANT - Correct answer-A claim settlement in which the insured
receives payment based on the current replacement cost of a damaged or lost item,
less depreciation
Bodily Injury Liability - Correct answer-Coverage for the risk of financial loss due
to legal expenses, medical costs, lost wages, and other expenses associated with
injuries caused by an automobile accident for which the insured was responsible
Premium - Correct answer-The amount of money a policyholder is charged for an
insurance policy
Insurance - Correct answer-Protection against possible financial loss
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, Policy - Correct answer-A written contract for insurance
Uninsured Motorists Protection - Correct answer-Automobile insurance coverage
for the cost of injuries to a person and members of his or her family caused by a
driver with inadequate insurance or by a hit-and-run driver
Negligence - Correct answer-Failure to take ordinary or reasonable care in a
situation
Insured - Correct answer-A person covered by an insurance policy
Homeowner's Insurance - Correct answer-Coverage for a place of residence and its
associated financial risks, Damages or destruction of the building in which you
live, and other structures on the property
Coverage - Correct answer-The protection provided by the terms of an insurance
policy
Umbrella Policy - Correct answer-Supplementary personal liability coverage; also
called a "personal catastrophe policy"
Financial Responsibility Law - Correct answer-State legislation that requires
drivers to prove their ability to over the cost of damage or injury caused by an
automobile accident
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
