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Insurance Decisions and Risk Management — Quiz Answers

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1
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What is the purpose of insurance?

A
to transfer financial risk
B
to avoid responsibility
C
to eliminate all costs
D
to guarantee profit
3

What is a deductible?

A
total coverage
B
claim amount
C
amount paid before coverage
D
monthly payment
4

What is liability?

A
legal responsibility for damage
B
insurance cost
C
ownership of property
D
savings account
5

What is a co-pay?

A
fixed payment for service
B
yearly fee
C
tax
D
loan
6

Why do most states require auto insurance?

A
protect drivers financially
B
limit car ownership
C
reduce accidents
D
increase taxes
7

What is a coverage limit?

A
maximum payout
B
deductible
C
minimum payment
D
monthly cost
8

Risk refers to the ______ of financial loss.

A
prevention
B
guarantee
C
certainty
D
chance
9

Which type of insurance covers medical expenses?

A
health insurance
B
renters insurance
C
auto insurance
D
life insurance
10

What is a premium?

A
total claim
B
coverage limit
C
deductible
D
regular payment for insurance

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