Answers26-27 Ignite Financial Literacy Personal Finance - EL3403Homeowners Insurance

Homeowners Insurance Answers

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21
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Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim’s employer pays 42% of his $378 monthly premium. His insurance plan will also pay for 23% of the $345 premium for additional beneficiaries. Stephanie’s employer pays 35% of her $298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the $349 premium for each additional beneficiary.Insurance Jim's Employer BeneficiaryMonthly PremiumEmployer ContributionJim$378 42%Additional (each)$345 23% Stephanie's EmployerBeneficiaryMonthly PremiumEmployer ContributionStephanie$298 35% (+10% for each additional beneficiary)Additional (each)$349 30%Which would be the most economical way for the couple to purchase health insurance?

A
They should both add each other to their plans.
B
Stephanie should add Jim to her health care plan.
C
Jim should add Stephanie to his health care plan.
D
They should each purchase a plan from their own employer.
22
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Susan is paying $0.30 per $100 on her $483,000 home in homeowners insurance annually. If her annual homeowners insurance premium is divided into twelve equal monthly installments to be included on each of her monthly mortgage payments of $2128.00, what is her total monthly payment?

A
$2,248.75
B
$2,409.75
C
$3,381.00
D
$3,577.00
23

Which of the following is something that will not affect your homeowners insurance premium?

A
the distance of the home from a school
B
the distance of the home from a flood plain
C
the distance of the home from a fire station
D
the distance of the home from a fire hydrant
24

The health benefits Tom receives from his employer cover 43% of the total monthly premium of $345.00. How much does Tom have to pay each month?

A
$148.35
B
$196.65
C
$302.00
D
$288.00
25

Ben just purchased a house in an older neighborhood. After talking to several neighbors across the street, he found that he is paying much more in homeowners insurance than other homeowners in the neighborhood. Ben’s house is about 30 years old. It is made of wood framing and stucco texture. It has all of it’s original plumbing and electrical work. The brick wall at the back of his back yard separates his yard from a drainage wash. Which of the following is not a reasonable argument for the insurance company to use to justify Ben’s higher homeowners insurance premium?

A
The age and outdated structural design of the house implies that remodeling is likely. This warrants a higher premium.
B
Knowing that old plumbing has a tendency to break, there is a real possibility of internal flooding. This warrants a higher premium.
C
Since Ben is right next to a drainage wash, there is a certain danger of flood damage should the wash overflow. This warrants a higher premium.
D
Considering that the house is made of flammable materials and has the original wiring, there is a certain danger of fire. This warrants a higher premium.
26

Gerald would like to add a dental and vision option to the health insurance plan he purchased through his employer. In addition to the 65% of Gerald’s $345 monthly health insurance premium, his employer has offered to pay 50% of a $38 monthly dental premium and 75% of a $23 monthly vision premium. If Gerald adds both the dental and vision options to his insurance plan, how much will he pay each month towards health insurance?Soopergood InsuranceOptionMonthly PremiumEmployer ContributionHealth Insurance$345 65%Dental$38 50%Vision$23 75%

A
$141.75
B
$145.50
C
$149.50
D
$260.50
27

Why are the premiums for a PPO health insurance plan generally more expensive than those for an HMO Health Insurance Plan?

A
PPO insurance plans offer a wider choice of primary care doctors and specialists.
B
HMO insurance plans have higher deductibles and copays.
C
PPO insurance plans have higher deductibles and copays.
D
HMO insurance plans require a referral for a patient to visit a specialist.
28

Sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. She later learned that her house was very susceptible to flood damage during the rainy season. Which of the following statements best describes the effect the location of Sally’s new home will have on her homeowners insurance premium?

A
Financial loss due to flood damage is likely. Her insurance premiums will be higher than homes not on the waterfront.
B
Since floods are likely, the value of the home decreases significantly, lowering the insurance premium at the same time.
C
Since floods happen so infrequently, they are not considered a real threat to the value of the home. Sally’s insurance premium will not be affected.
D
While extremely annoying, flood damage is usually inexpensive and will not affect the value of the home. Sally’s insurance premium should not be affected.
29

Renters insurance is different than homeowners insurance in that _____.

A
unlike homeowner’s insurance, renter’s insurance will not cover items lost in a burglary.
B
homeowner’s insurance protects the building of residence while renter’s insurance does not.
C
renter’s insurance only applies to apartments when homeowner’s insurance only applies to houses.
D
additional living expenses are covered by renter’s insurance but not by homeowner’s insurance.
30

Sally’s employer pays for 38% of her annual health insurance premium of $4,350.00. Sally pays the remaining balance by having it deducted in equal amounts from her 26 paychecks throughout the calendar year. How much will Sally have deducted from each paycheck?

A
$63.58
B
$103.73
C
$137.75
D
$207.46
31

Which of the following is something that will not affect your homeowners insurance premium?

A
the distance of the home from a school
B
the distance of the home from a flood plain
C
the distance of the home from a fire station
D
the distance of the home from a fire hydrant
32

Rachel just purchased a homeowners insurance policy for her new home that costs $0.43 per $100. Her home is worth $387,500. What is Rachel’s annual homeowners insurance premium?

A
$1,666.25
B
$2,208.75
C
$8,802.33
D
$9,011.63
33

Bob’s employer covers 23% of his family’s annual health insurance premium. The balance of the premium is deducted in equal amounts from Bob’s paycheck 26 times over the calendar year. If $185.30 is withheld from each of Bob’s paychecks, what is his family’s annual health insurance premium?

A
$805.65
B
$4,817.80
C
$6,256.88
D
$20,946.96
34

Jordy was living in a third story apartment in his complex. Up there he was paying an annual renters insurance premium of $325.00. When an opportunity to move to the ground floor came up, he jumped on it, but found out that, since burglaries are more common on ground floor apartments, his renters insurance premium would go up by 18%. What is his new annual renter’s insurance premium.

A
$58.50
B
$31.96
C
$268.96
D
$383.50
35

Rachel just purchased a homeowners insurance policy for her new home that costs $0.43 per $100. Her home is worth $387,500. What is Rachel’s annual homeowners insurance premium?

A
$1,666.25
B
$2,208.75
C
$8,802.33
D
$9,011.63
36

Rudy has been paying an annual homeowners insurance premium of $1,106.30 ($0.37 per $100 of value) since he first purchased his house. For the past six months, Rudy has completed some major improvements to his house to improve its overall value. If Rudy successfully adds $50,000 to the value of his house, what will his new annual homeowners insurance premium be?

A
$185.00
B
$315.00
C
$1,291.30
D
$1,351.14
37

Mr. Henderson’s annual premium of $4,668 is covered entirely by his employer along with 25% of the $9,264 premium for his wife and kids. How much of the Henderson family’s annual premium is being paid for by Mr. Henderson’s employer?

A
$2,316
B
$3,483
C
$6,984
D
$10,431
38

Cesar’s annual homeowners insurance premium is $972.80. If his home is valued at $253,000, roughly how much is Cesar paying for homeowners insurance?

A
$0.13 per $100 of value
B
$0.19 per $100 of value
C
$0.26 per $100 of value
D
$0.38 per $100 of value

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