Boo! You're Covered 👻
A vampire accidentally crashes his hearse into a parked car while driving to a Halloween party. What type of insurance could help pay for damage to the other person's car if the vampire is legally responsible?
What is auto liability insurance?
A witch leaves a candle burning beside a pile of Halloween decorations, and a fire destroys her living room. What type of loss has occurred?
What is a property loss?
A werewolf thinks having a $500 deductible means his insurer will pay the first $500 of every covered claim. Is he right?
What is no?
The deductible is generally the amount the insured pays before the insurer pays its covered share.
A vampire texts while driving to a Halloween party and hits a pedestrian. What legal concept could make him responsible for the pedestrian's injuries?
What is negligence?
A family decorates its house for Halloween with candles and fake cobwebs. Before the party, they install working smoke detectors and check their fire extinguishers. What risk management strategy are they using?
What is loss prevention and loss reduction?
This is the amount you must pay out of pocket for a covered loss before your insurance begins paying, subject to the policy terms.
What is a deductible?
A lightning strike starts a fire that burns down a house. What type of loss exposure does this represent?
What is a property loss exposure?
True or false: Having insurance means every possible loss is covered.
What is false?
Policies have exclusions, conditions, and limits.
A company sells Halloween masks that contain a dangerous chemical, and several customers suffer injuries. What type of liability could the manufacturer face?
What is product liability?
A haunted house business suffers $10,000 in covered property damage. Its insurance policy has a $1,000 deductible, and no other limits or provisions affect the payment. How much will the insurer pay?
What is $9,000?
This type of insurance protects your home and belongings against certain covered losses, such as fire or theft.
What is homeowners insurance?
A homeowner lives in a flood-prone area and purchases separate coverage to protect against flood damage. What type of insurance is this?
What is flood insurance?
A person believes that if they have health insurance, they will never have to pay for medical care out of pocket. What common insurance feature proves this belief wrong?
What are deductibles, copayments, and coinsurance?
A homeowner leaves their front door open during trick-or-treating. Their dog runs outside and bites a child. Who may be responsible for the child's injury?
The dog owner
Dracula decides not to file a small insurance claim after accidentally damaging his garage door. Instead, he pays for the repair himself because the cost is less than his deductible. What risk management technique is he using?
What is risk retention?
This is the maximum amount an insurer will pay for a covered loss under a policy or coverage provision.
What is a policy limit?
A hurricane damages a business, forcing it to close temporarily and lose income. What type of insurance can help replace the lost income if the loss is covered?
What is business interruption insurance?
Dracula decides not to buy insurance for his expensive Halloween costume because he believes nothing bad will happen to it. What risk management strategy is he choosing if he plans to pay for any loss himself?
What is risk retention?
A witch hosts a Halloween party and leaves a boiling cauldron unattended in a crowded room. A guest accidentally bumps into it and suffers burns. Who may be responsible?
The witch,
if leaving the cauldron unattended created an unreasonable risk of injury.
A costume shop discovers that a batch of masks it sells may contain a dangerous chemical. The owner immediately stops selling the masks and alerts customers. What risk management strategy is the owner using?
What is loss mitigation?
The owner is taking steps to limit further harm and potential losses.
A homeowner's house is destroyed by a covered fire. The insurer pays to repair or replace the home without deducting for depreciation, subject to policy terms and limits. What type of valuation does this describe?
What is replacement cost coverage?
A Halloween festival organizer requires vendors to secure their tents, uses fire-resistant decorations, and establishes emergency exits to reduce the chance of injuries and property damage. What risk management technique is being used?
What is loss prevention or loss reduction?
A Halloween store owner purchases insurance after learning that a major storm is forecast to hit the next morning. The storm damages the store, and the owner expects the new policy to pay. What critical issue could prevent coverage?
The loss may occur before coverage takes effect, and the policy may also address known or impending losses through its terms and applicable rules.
A haunted hayride operator fails to maintain the trailer's brakes. The brakes fail, and several passengers are injured. Which element of negligence would the failure to maintain the brakes most directly help establish?
What is a breach of the duty of care?
A town organizes a Halloween festival with rides, food vendors, and thousands of visitors. The organizers want to reduce the likelihood of injuries while protecting themselves against potentially large liability claims. Name two risk management measures they should implement.
Acceptable answers include:
regular safety inspections, employee training, crowd control, emergency planning, appropriate liability insurance, vendor safety requirements, and hazard identification.