How much do you know about your insurance coverages? Grab a pencil and take this pop quiz, then visit the sections of this site to brush up on your knowledge before you purchase insurance or file a claim!
1. If you become disabled can your private disability
insurer deny benefits if you are able to perform another job?
a) No. All disability policies must pay the policy benefits if you become unable to perform the duties of the position you are in at the time you became disabled.
b) It depends on what your occupation was at the time you
applied for the insurance.
c) Only if you accept the new position.
d) It depends on the exact definition of "total disability" in your policy
and on what you were told when you bought the policy.
2. Does ERISA help to protect your rights and policy coverages provided by
your employer?
a) Yes.
b) No. Exactly the opposite. ERISA can void consumer protection services provided by your state.
c) Only if you have chosen the ERISA option.
d ) Yes, if your injury or illness is not critical.
3. "Underwriting" refers to:
a) ensuring the consumer is well protected.
b) making certain that the insurer maintains reserves sufficient to pay its
projected claims.
c) calculating the risk of insuring the consumer.
d) an insurance company agent reviewing the policy for accuracy and fairness.
4. Does homeowners insurance generally cover repair or replacement of loss
to your home and personal property caused by storm damage?
a) Yes, if there is structural damage to the dwelling.
b) No. homeowners insurance never covers replacement costs only depreciated costs.
c) Not if the storm results in flooding or water damage.
d) None of the above.
5. Does a homeowners "replacement guarantee" necessarily cover the expense
of repairing covered losses with the actual cost of rebuilding or repairing
the damage?
a) Yes. That is what it is for.
b) Yes, if you use a contractor approved by your insurance company.
c) No. Some "replacement guarantees" are capped and do not actually
guarantee replacement at all.
d) Yes, but only after the value of your home is deducted from your total coverage.
6. The benefit of having an arbitration agreement in an insurance policy is
that:
a) with arbitration the claimant saves money.
b) under the arbitration provisions in most insurance policies, arbitrators are usually chosen by the agreement of both sides.
c) if the claimant can establish that the arbitrator is biased in favor of the insurance company because they give him/her a great deal of repeat business, the decision of the arbitrator can usually be set aside.
d) None of the above.
7. "Comprehensive Auto Coverage" is:
a) a very good insurance policy that covers any type of damage to your vehicle.
b) insurance that is easy to understand.
c) coverage for damage caused by events other than a collision.
d) coverage that is accepted by most repair shops.
8. True or False? Insurance agents are required to show you a copy of your
policy before you buy it.
a) True. If the agent fails to do so, the policy is void.
b) True. If the agent fails to do so you are not bound by the conditions
and restrictions contained in the policy.
c) True. In addition the agent is required to explain any important exclusions or limitations in the policy coverage.
d) False. But the company may be responsible for any errors or
misrepresentations made by their agent at the time of sale.
9. If an agent fills out the insurance application at the time of sale and
it contains material errors in the information provided:
a) it is the agent's fault and the insured cannot be held responsible.
b) the insurance company cannot use those errors to its' own benefit.
c) the company can possibly use those errors to eliminate coverages after a claim has been made under the policy.
d) the errors are of no effect one way or the other.
10. Insurance companies are barred from making campaign contributions to
legislators responsible for regulating insurance companies and/or to
insurance commissioners:
a) in every state.
b) in about half the states.
c) in Maine and Massachusetts only.
d) in California, New York, Illinois, Ohio, Oregon, Vermont and Florida only.
e) None of the above.
11. Under most personal or business liability policies, the insurer is
required to:
a) pay all of the costs of the insured consumer's legal defense in any
lawsuit in which a covered policyholder, or his/her business, are named as defendants.
b) pay only the defense costs for law suits that the insurer would be
required to indemnify (pay a judgment for) if the suit is lost.
c) pay all of the costs of the insureds legal defense in any lawsuit naming the insured or his/her business, minus the deductible and up to the amount of the policy limits.
d) None of the above.
12. In most states it is illegal for an insurance company to:
a) engage in unreasonable delay in handling a claim.
b) fail to disclose to a claimant his or her rights under the policy.
c) compel an insured to sue in order to collect benefits due under the policy.
d) Conduct a one-sided investigation of the facts or rely on biased expert opinions in refusing to pay a claim.
e) All of the above.
13. When you have an insurance claim the first thing you should do is:
a) call the insurance company, answer their questions and ask them if the claim is covered.
b) obtain a claims form and fill it out carefully, exaggerating the loss slightly to compensate for the negotiating process.
c) forget about it. If you file a claim the insurance company will refuse to renew the policy.
d) None of the above.
14. Before talking to an insurance agent or claims adjuster you should:
a) memorize what you are going to say.
b) take out a pad and pen so that you can take good notes on EVERYTHING that is said. Save that information in your insurance Notebook.
c) review the appropriate Insurance Consumers Line information so that you can learn what to do before talking.
d) have a good stiff drink or two.
e) (b) and (c).
15. If your insurance company tells you they are "reserving their rights"
that means:
a) they are preparing to close the claims department for lunch.
b) they are going to pay for your claim but may come after you for the money they are paying you at some later date.
c) that they will only pay your benefits if you sign a release.
d) that they are hiring a lawyer to sue you.
16. If your insurer tells you they want to take your "Examination Under
Oath" on a substantial claim, you should:
a) refuse to attend the examination.
b) attend, but refuse to answer any questions that you consider
inappropriate.
c) speak with an experienced insurance attorney before attending the examination.
d) prepare carefully, fully anticipating every question they might
conceivably ask you, about any aspect of your past or present insurance claims.
e) (c) and (d)
17. Most "Replacement Guarantees" in homeowners policies: a) Guarantee that your insurance company will pay the reasonable cost of repairing or replacing your house if it is damaged or destroyed by a covered occurrence.
b) Guarantee that your insurance company will provide you with a contractor who will repair or replace your home for an amount within your dwelling protection limits.
c) Guarantee that you will be able to recover at least the dollar amount of the equity you had in your house prior to the loss.
d) Don't "guarantee" the actual "replacement" cost of anything.
e) (1) and (2) above.
Ready to see how you did? See Below for answers!
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1. d
2. b
3. c
4. d
5. c
6. d
7. c
8. d
9. c
10. e
11. d
12. e
13. d
14. e
15. b
16. e
17. d
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