Insurance Basics
Which of these is not a factor that is used to determine insurance rates?
A. Credit Score
B. Age
C. Location
D. Religion
D. Religion
Which type of insurance is required in order to title and register a vehicle in NC?
A. Comprehensive & Collision
B. Liability
C. Both
B. Liability
True or false: You should avoid telling the insurance company about any potential hazards such as swimming pools, trampolines, or dogs so that you can qualify for a better rate.
False!
KISS singer Gene Simmons took out a $1 million insurance policy on what specific body part?
Tongue
What term is used for the insurance that an insurance company buys from another insurance company to protect itself?
A. Reinsurance
B. Umbrella Insurance
C. Extended Liability Insurance
Reinsurance
What are the current minimum limits of liability in NC?
A. 50/100/50
B. 100/300/50
C. 30/60/25
C. 30/60/25
True or false:
Your homeowners policy will not cover damage caused by termites.
True
True or false: You can purchase alien abduction insurance?
At least three different insurance agencies sell alien abduction policies and some have even paid out claims!
Samantha is letting her son use one of her vehicles full time while he is attending college and living on campus. However, she wants him to have his own insurance policy.
Can an insurance policy be written in just the son's name?
No. The named insured needs to match the title. The son can be listed as a driver.
If you hit a deer while driving which coverage will pay for the damage?
A. Comprehensive
B. Collision
C. GAP Insurance
A. Comprehensive
True or false:
Your homeowners policy will cover damage to your home caused by water that backs up into your home from a sewer line.
Covers the cost of a prize if someone makes a hole-in-one during a golf tournament. The cost of the insurance is paid upfront.
Hole-in-one insurance.
Insurers calculate the odds of a hole-in-one at: 3,000 to 1 for a professional and 12,500 to 1 for an amateur.
Also called an “endorsement,” what term is also used when you amend an insurance policy to add or remove coverage?
A. Rewrite
B. Revision
C. Rider
C. Rider
In property and auto insurance, ACV is one method of determining the damage for which the insured is liable. What does ACV stand for?
Actual Cash Value
Who's policy will cover the damage?
Unless there was negligence from your neighbor, your homeowner policy will cover the damage to your garage. The car would be covered under your auto policy assuming that you had comprehensive coverage.
Rod Stewart took out a 6 million dollar insurance policy to cover what specific body part?
His voice
How much does insurance fraud cost the insurance industry per year?
A. 45 Billion
B. 35 Million
C. 2.5 Million
A. 45 billion
How long is a driver designated as "in-experienced" in NC?
A. 8 Years
B. 5 Years
C. 3 Years
C. 3 Years
On July 1, 2025 this will change to 8 years.
Steve has a homeowners insurance policy with Allstate that covers his home up to $400,000. His deductible is 1% for wind/hail and $1,000 for all other perils.
If a windstorm causes $15,000 in damage to his roof, how much is he required to pay out of pocket?
$4,000
What was the biggest insurance payout in history?
A. Hurricane Katrina (2005)
B. Lehmen Brothers Investment Bank (2008 financial crisis)
C. Hurricane Ian (2022)
The largest insurance payout in history was the 2008 bankruptcy of Lehman Brothers, which cost insurers over $115 billion. This was the most significant event of the 2008 financial crisis.