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.
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
TRUE or FALSE? Flood and earthquake damage are not
covered under most standard homeowners insurance policies.
TRUE or FALSE? Ideally, renters should have the same amount
of liability coverage as someone who owns their own home.
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
Question 6: A common reason many homeowners
are underinsured is because...
- They fail to update their policy as their assets and dwelling
increase in value
- They are unaware of internal limits which cover personal property
only up to a certain amount
- Their mortgage lender only requires insurance that will cover
the outstanding mortgage balance
- all of the above
- only a & b above
Question 7: House fires resulting in
fatalities occur most often in which room?
- the Living Room
- the Bedroom
- the Kitchen
- the Laundry Room
- the Basement
Question 8: Which of the following factors
is not considered when determining your homeowners' premium?
- type of construction (brick, frame, etc.)
- deductible amount chosen
- size of lot
- distance to fire hydrant or fire station
- age of home
Question 9: Which of the following statements
is true, according to a recent survey of convicted house burglars?
- burglars are more likely to enter a home through a window rather
than a door.
- most burglars are not deterred by the sound of a radio or TV
inside the house
- most burglars are between the ages of 12-24 and live within
an eight-block radius of the target
- all of the above
- only a & c above
Question 10: Match the term at left with
the correct definition.
|1. Named Peril
4. Umbrella Liability
5. All Risk
- Insurance to cover damages that exceed your policy limits
- An endorsement to a policy covering specific items
- A policy that covers all and any losses which occur
- The amount you are responsible for in a claim
- A policy that covers only those losses listed