Test Your Insurance IQ

You may be surprised by what you do and don't know about homeowners' insurance policies and related subjects. Jot your answers to these 10 questions down on a sheet of paper. See how you score on our quick quiz, then feel free to visit those areas on our web site where you can add to your knowledge!

Question 1: TRUE or FALSE? Your policy covers 100% of the Dwelling Coverage of your home. That means even if the cost of rebuilding in your area exceeds the house's market value by 20%, your insurance will still pay to rebuild your home completely if it's destroyed by fire or some other catastrophe.

Question 2: TRUE or FALSE? Your prized Beanie Baby collection is worth twice what you paid for it. A "scheduled coverage" policy endorsement means you'll receive the current market value if it's lost in a fire.

Question 3: TRUE or FALSE? Flood and earthquake damage are not covered under most standard homeowners insurance policies.

Question 4: TRUE or FALSE? Ideally, renters should have the same amount of liability coverage as someone who owns their own home.

Question 5: TRUE or FALSE? You have a home-based financial planning business. If a client you're entertaining slips in your kitchen and sues for damages, your homeowners policy will cover your liability up to policy limits.

Question 6: A common reason many homeowners are underinsured is because...

1. They fail to update their policy as their assets and dwelling increase in value
2. They are unaware of internal limits which cover personal property only up to a certain amount
3. Their mortgage lender only requires insurance that will cover the outstanding mortgage balance
4. all of the above
5. only a & b above

Question 7: House fires resulting in fatalities occur most often in which room?

1. the Living Room
2. the Bedroom
3. the Kitchen
4. the Laundry Room
5. the Basement

Question 8: Which of the following factors is not considered when determining your homeowners' premium?

1. type of construction (brick, frame, etc.)
2. deductible amount chosen
3. size of lot
4. distance to fire hydrant or fire station
5. age of home

Question 9: Which of the following statements is true, according to a recent survey of convicted house burglars?

1. burglars are more likely to enter a home through a window rather than a door.
2. most burglars are not deterred by the sound of a radio or TV inside the house
3. most burglars are between the ages of 12-24 and live within an eight-block radius of the target
4. all of the above
5. only a & c above

Question 10: Match the term at left with the correct definition.