CONTENTS

ANSWERS TO THE
Assignment Title Page

QUESTIONS IN THE 1 Personal Insurance Overview 7

2 Automobile Insurance and Society 35

COURSE GUIDE
3 Personal Auto Policy: Liability, Med 54
Pay, and UM Coverage
Personal Insurance 4 PAP: Physical Damage, 76
Duties After an Accident, Endorsements
AINS 22 5 Homeowners Property Coverage 93

nd 6 Homeowners Liability, Conditions, 119

2 Edition Coverage Forms, and Endorsements

7 Other Residential Insurance 149

2015-2016
8 Other Personal Property and
Liability Insurance 169

9 Life Insurance Planning 183

Published by: 10 Retirement Planning 199

KEIR EDUCATIONAL RESOURCES
4785 Emerald Way 11 Disability and Health Insurance Planning 219
Middletown, OH 45044
1-800-795-5347
1-800-859-5347 FAX
Email customerservice@keirsuccess.com
www.keirsuccess.com
 Assignment 1
Personal Insurance Overview
Educational Objective 1
The three elements of a property loss exposure are: (a) the
asset that is or is likely to become exposed to potential loss, (b)
potential causes of loss that may damage or destroy the property, and
(c) a potential adverse financial consequence.
Application Question
1-4. The three necessary elements for a loss exposure are: the
presence of an asset, the existence of potential causes of loss, and the
financial consequences resulting from the loss. In this example, Joe
purchased a new home (an asset) which is subject to various perils
(fire, flood, theft, etc.) and the result of these perils would be a
reduction in property value. Therefore, all of the elements of a loss
exposure are present.

Key Words and Phrases

1-1. A loss exposure (exposure) is a circumstance that exposes an

entity to the possibility of a financial loss. A loss exposure may be
present without an actual loss occurring.

1-2. Cause of loss A peril is a cause of loss or the actual means

by which property is destroyed. Fire, flood, windstorm, and theft are
all perils because they cause loss.

Review Questions

1-1. An asset exposed to a loss is any item that is subject to a

reduction in value as the result of a particular peril. Home,
furnishings or a vehicle – all are examples of such personal assets.

1-2. A peril is a cause of loss. Fire, flood, windstorm, and theft

are all perils because they cause loss.

1-3. The financial consequences of loss are dependent upon the

type of asset, and the cause and severity of the loss. For example,
the financial consequences of a permanent disability that prevents a
worker from earning a living are much more severe than those
caused by a short-term illness to the same worker.

©2016 Keir Educational Resources 2 800-795-5347

 MULTIPLE CHOICE CONTENTS
QUESTIONS WORKBOOK Assignment Title Que. Ans.

1 Personal Insurance Overview 7 125

2 Automobile Insurance and Society 16 129

AINS 22
3 Personal Auto Policy: Liability, 24 133
Personal Insurance Med Pay, and UM Coverage

4 PAP: Physical Damage, 38 139

nd
2 Edition Duties After an Accident,
Endorsements

2015-2016 5 Homeowners Property Coverage 46 142

6 Homeowners Liability, Conditions, 58 147

Coverage Forms, and Endorsements

7 Other Residential Insurance 72 153

8 Other Personal Property and 81 156

Liability Insurance

Published by: 9 Life Insurance Planning 93 161

KEIR EDUCATIONAL RESOURCES
4785 Emerald Way 10 Retirement Planning 102 165
Middletown, OH 45044
1-800-795-5347 11 Disability and 114 170
1-800-859-5347 FAX Health Insurance Planning
E-mail customerservice@keirsuccess.com
www.keirsuccess.com

©2016 Keir Educational Resources 3 800-795-5347

 Assignment 1
5. Arthur has been injured in an auto accident that resulted
from Michael’s reckless and malicious conduct in running Arthur’s
Personal Insurance Overview car off the road. Which damages can Arthur recover?
(Text 1.9)
1. What are the three elements of every loss exposure? (A) Punitive damages
(Text 1.3) (B) General damages
(A) Property exposure, liability exposure, and personal (C) Special damages
exposure (D) All of the above
(B) Asset exposed to loss, cause of loss, financial
consequences of loss 6. Which of the following statements best describes civil law?
(C) Negligence, intentional torts, absolute liability (Text 1.9)
(D) Reduction in value of property, increased expenses, (A) Civil law is concerned with the nefarious conduct of
lost income citizens with respect to the laws of the state or the
federal government.
2. For insurance purposes, a cause of loss is: (B) Civil law is concerned with the erratic behavior of
(Text 1.4) people toward each other.
(A) the means by which assets can suffer reduction in (C) Civil law is concerned with the settlement of
value. disputes between citizens.
(B) the multiplier effect from damage or destruction of (D) Civil law is concerned with actions that harm the
property. public welfare.
(C) the severity of the exposure of livelihood and
property. 7. All of the following are sources of tort liability, EXCEPT:
(D) the decrease in value from a particular peril. (Text 1.9 – 1.11)
(A) Breach of contract
3. All of the following are examples of personal property, (B) Negligence
EXCEPT: (C) Intentional torts
(Text 1.6) (D) Absolute liability
(A) Intangible property
(B) Automobile 8. Which of the following statements concerning tort liability is
(C) Vacation house correct?
(D) Antiques (Text 1.9 – 1.11)
(A) The injured party has the right to seek damages from
4. How are personal insurance policies generally designed? the wrongdoer.
(Text 1.7) (B) Torts are wrongful acts, such as breaches of
(A) To earn the most premium contracts.
(B) To insure loss exposures faced by the average family (C) Fraud is the tort that most commonly causes liability
(C) To insure all loss exposures that can be anticipated losses for wrongdoers.
for all kinds of people (D) Even in cases of absolute liability, when seeking
(D) To insure loss exposures for the part of the recovery, the injured party must prove negligence on
population that will be profitable the part of the wrongdoer.

©2016 Keir Educational Resources 4 800-795-5347

 Assignment 1
Personal Insurance Overview
1. B is the answer. The three elements of a loss exposure are
the assets exposed to loss, cause of loss, and financial consequences
of loss. A sets forth types of loss exposures, not the elements of loss
exposures. C sets forth the types of torts that make up cause of loss
for liability exposure. D sets forth the kinds of financial
consequences that occur when property is damaged or destroyed.
2. A is the answer. A cause of loss is the means by which
assets suffer a reduction in value. A cause of loss is a peril such as
fire, windstorm, hail, lightning, theft, vandalism, auto collision, or
illness. The actual decrease in value of assets from a peril is the
financial consequence of the cause of loss.
describes both criminal and civil law. D is not correct because
criminal law deals with actions that harm the public welfare.
7. A is the answer. Breach of contract will give rise to
contractual liability but not to tort liability. The sources of tort
liability are negligence, intentional torts, and absolute liability.
8. A is the answer. B is not a correct statement because
breaches of contracts and crimes are not torts. C is not correct
because negligence is the tort that most commonly causes liability
losses for wrongdoers. D is not correct because in cases of absolute
liability, the injured party is not required to prove wrongdoing on the
part of the wrongdoer.

3. C is the answer. A vacation house is a building or structure

attached to land. Like other homes, it is real property. The contents
of a dwelling will be personal property. An automobile is personal
property because it is not attached to land. Intangible property and
intellectual property are personal property.

4. B is the answer. Personal insurance policies are designed to

insure loss exposures faced by the average person and family. This
approach keeps the cost of personal insurance at reasonable levels
because the insurer does not have to charge high premiums for
unusual exposures. People with these unusual and more expensive
insurance needs can be charged additional premium.

5. D is the answer. Arthur can recover all of these damages

because Michael’s actions were reckless and malicious. The punitive
damages can be awarded to punish a person who acted recklessly and
maliciously. These damages do not have to bear a relationship to the
actual damages suffered. The general and special damages must be
awarded based on the actual damages sustained and are to
compensate the injured person for the loss.

6. C is the answer. A is not correct because the statement

describes criminal law. B is not correct because the statement

©2016 Keir Educational Resources 5 800-795-5347