Is It Covered?
What type of insurance generally covers damage to your car after you hit another vehicle?
Collision coverage
What is the term for the possibility of a loss?
Risk
Your roommate accidentally breaks your laptop. What type of insurance might cover your laptop against certain accidental damage or theft?
A relevant personal property policy or endorsement, depending on the policy
True or false: Intentionally lying about a loss to receive an insurance payout can constitute insurance fraud.
True
You drop your phone in a toilet. Is that automatically covered by every phone or renters insurance policy?
No. Coverage depends on the policy and exclusions.
What type of insurance may cover your belongings if they are stolen from your apartment?
Renters insurance
What do you call the amount you pay out of pocket before insurance starts paying covered expenses?
Deductible
You rear-end another car while driving to class. What type of auto coverage may pay for the other driver's injuries?
Bodily injury liability
A person stages a car accident to collect insurance money. What is this called?
Staged accident fraud
A raccoon breaks into a bakery and destroys $2,000 worth of cupcakes. What is the first thing an adjuster should investigate?
The cause of loss, applicable coverage, exclusions, and documentation
A customer slips in a store and sues the business. What type of coverage may respond?
Commercial general liability
What is it called when a company transfers some of its financial risk to an insurer?
Risk transfer
You throw a party, and a guest is injured. What insurance issue could arise for the renter or homeowner?
Potential personal liability
Someone reports a stolen phone but secretly sold it. Is that a legitimate claim?
No. It involves a knowingly false claim.
A wedding gets canceled because of a covered severe weather event. What type of policy might help with eligible financial losses?
Event cancellation insurance
Your basement floods because a nearby river overflows. Does a standard homeowners policy typically cover flood damage?
No. Flood damage generally requires separate flood insurance.
A company installs sprinklers to reduce potential fire damage. Is this risk avoidance, reduction, retention, or transfer?
Risk reduction
Your apartment is unlivable after a covered fire. What renters coverage may help pay for temporary housing?
Additional living expenses or loss-of-use coverage
An insured exaggerates the value of property damaged in a real fire. What type of fraud could this be?
Claim inflation or exaggeration
A restaurant loses power, and all its food spoils. Does business insurance automatically cover every dollar lost?
No. The cause, policy wording, exclusions, and coverage limits matter.
A business's computer system is hacked, and customer data is stolen. What type of insurance may help with covered losses?
Cyber insurance
A company decides to pay for small losses itself instead of purchasing insurance for them. What risk strategy is this?
Risk retention
You borrow your friend's car and crash it. Which policy typically comes into play first for damage or injuries you cause?
Often the car owner's auto liability policy, subject to policy terms and circumstances
A claim contains suspicious evidence. Does that automatically prove insurance fraud?
No. It warrants investigation; suspicious circumstances alone do not prove fraud.
A company buys insurance for every possible risk but still goes bankrupt after a disaster. Name one reason this could happen.
Exclusions, inadequate limits, deductibles, uninsured losses, or uncovered business interruption