Coverage Quiz
Questions: 16 · 10 minutes
1. A health plan pays 80% of an eligible charge after the deductible, while the member pays 20%. What is the member's 20% share called?
A premium
A coverage limit
Coinsurance
A fixed copayment
2. How does actual cash value coverage generally differ from replacement cost coverage for damaged property?
Actual cash value generally accounts for depreciation, while replacement cost generally does not
Actual cash value applies only when damaged property cannot be repaired
Actual cash value always pays the original purchase price
Actual cash value has no policy limits or exclusions
3. What is an insurance premium?
The portion of a covered loss paid by the policyholder
The amount charged to keep an insurance policy in force
An optional increase in a policy's coverage limit
A payment made by an insurer after approving a claim
4. A policyholder buys extra protection for a valuable piece of jewelry that otherwise has a restrictive sublimit. What document commonly adds or changes that protection?
A claim estimate
A premium receipt
An endorsement or rider
A cancellation notice
5. A policyholder is moving to another state or country and wants to know whether the same protection will continue. What should be checked first?
Whether the policy number contains the new area's postal code
The policy's coverage territory and any requirement to notify the insurer
Whether the previous location had a lower average claim cost
Whether the move occurs before the next monthly statement
6. A person has primary and secondary health coverage for the same eligible service. What generally happens?
Both plans automatically pay the full bill directly to the person
The person may select whichever plan offers the larger duplicate payment
The plans merge into one policy with a combined premium
Coordination rules determine which plan pays first and whether the other covers an eligible remainder
7. What is a policy lapse?
A routine change to a policy's mailing address
A temporary increase in protection during a claim
A loss of active coverage, often after required payment is not made and any applicable grace period ends
A reduction in a deductible after a claim-free period
8. What is an insurance-policy exclusion?
A circumstance, type of loss, or property the policy does not cover
A discount applied when several policies are purchased together
The maximum amount the policyholder pays each year
A temporary extension added automatically after every claim
9. Before scheduled non-emergency treatment, a patient wants to reduce the chance of unexpected out-of-network charges. What is the most relevant step?
Check whether the clinician accepts any form of insurance
Assume every clinician at an in-network facility is also in network
Verify the network status of both the clinician and facility with the health plan
Wait until the claim is processed to ask about network participation
10. What is the main purpose of a personal umbrella insurance policy?
To replace every underlying home and auto policy
To cover routine maintenance excluded by property policies
To eliminate all deductibles on other policies
To provide additional liability protection above specified underlying policy limits, subject to its terms
11. After discovering covered property damage, which record would usually be most useful when documenting what was lost or damaged?
Photos or video, an itemized inventory, and available receipts or ownership records
A verbal estimate from a neighbor who did not see the property
A copy of the policy without any record of the damaged items
A list containing only the most expensive item
12. While visiting a friend, you accidentally damage an expensive item in their home. Which part of a typical policy would be most relevant to whether the friend's loss is covered?
Coverage for your own personal property
Liability coverage
Medical coverage for your own routine care
Roadside-assistance coverage
13. What does a coverage limit generally represent?
The minimum loss required before a claim can be reported
The number of claims a policyholder may submit
The amount by which every premium increases after a loss
The most the insurer will pay under the specified coverage, subject to the policy terms
14. An insurer denies a claim, but the policyholder believes relevant documentation was overlooked. What is the most appropriate interpretation of the denial?
The policy is automatically canceled when any claim is denied
The deductible should be increased to reverse the decision
The insurer must pay if the same claim is submitted without changes
The policyholder can review the stated reason, compare it with the policy, and use any available review or appeal process
15. Which policy section commonly summarizes the named insured, policy period, covered property or vehicles, limits, and deductibles?
The declarations page
The insurer's advertising notice
The claim-release section
The payment reminder
16. A covered repair costs $3,000, and the policy has a $500 deductible for that loss. Assuming no other limits apply, how much would the insurer generally pay?
$3,000
$2,500
$500
$3,500