FIN 230 Final Exam Review Session Brian Alvin Kathy Gu Eric Lam Neal Simons Bill Schneider and PC Wong Final Exam Locations Tuesday December 11 2007 8 11 AM VERY IMPORTANT You must take the exam in the right room Show up on time Late arrivals may not be allowed to take the exam Last Name Begins Exam Room A O 141 Wohlers Hall P Te 2 Education Th Z 166 Education Final Exam Exam is open book open note Exam will consist of 40 multiple choice questions Bring to the exam 2 Pencils Calculator Car and Health Policies Textbook for Life and Homeowners policies and the mortality table Appendices A E and F Study Tips Organize your notes homework and exams Know exactly where things are that you will need to reference Redo all of the homework Go through and rework every question Go online to see each question explained Think critically about each question and how the answer would change if certain things in the question changed Write down a summary of all the exclusions or where to find them for each policy Homework 1 Review State Farm Car Policy Your Use of Your Car Auto Policy 1 You are backing out of your driveway when you hit your mailbox and an oncoming car Your mailbox incurs 500 of damage your car costs 2 100 to repair and the other car costs 2 400 to repair The driver of the other car incurs 2 000 of medical bills and is entitled to a 20 000 bodily injury reward Your auto policy will pay A 0 B 6 400 C 27 400 D 27 900 E None of the above Auto Policy Answer 1 E None of the above 24 400 Your mailbox is not covered because your auto policy does not cover damages to your property 2 000 Collision 2 100 100 Deductible 2 400 Property Damage 20 000 Bodily Injury Liability includes med bills 24 400 Auto Policy 2 Your car is stolen and you immediately report this to State Farm You rent a car for 30 a day State Farm offers to pay you for the loss 8 days after it was stolen The ACV of your car was 12 000 Your auto policy will pay A 0 B 12 000 C 12 200 D 12 240 E None of the above Auto Policy Answer 2 C 12 200 If your car is stolen your policy will pay up to 25 per day for transportation costs 25 8 200 12 000 Comprehensive 12 200 Homework 2 Review State Farm Car Policy Uninsured Underinsured Un der insured Basics Only covered for un der insured in United States and its territories or Canada Un der insured covers only bodily injury for you and people in your car If you are not hit by a hit and run driver your uninsured coverage will not pay Underinsured will only pay to bring the total coverage of the other driver to 100 000 This includes the driver s existing coverage Ie Driver with 15 000 bodily injury liability coverage hits you Your underinsured will cover up to 85 000 100 000 15 000 Un der insured Basics cont You can get both un der insured coverage and medical payments coverage for the same accident Medical payments pays first Any remaining bodily injury award will be covered under your un der insured coverage Example You are hit by an uninsured driver and incur 10 000 in medical bills You sue the driver and are entitled to a 200 000 bodily injury award Medical payments coverage will pay 10 000 200 000 10 000 190 000 in bodily injury remains Your insured coverage has a limit of 100 000 So in total your policy will pay 10 000 med 100 000 uninsured 110 000 Problem 1 While driving your car in California after seeing the Illini demolish the Trojans you are hit by a car and severely injured You incur 40 000 in medical bills and are entitled to a 180 000 bodily injury award but the other driver only has 25 50 100 in coverage Your car costs 11 000 to repair a 25 000 b 100 000 c 125 000 d 135 900 e None of the above Problem 1 Answer Correct answer B The other driver will pay the entire cost to repair your car He will also pay 25 000 of your bodily injury award Medical 40 000 25 000 limit Underinsured 180 000 25 000 25 000 130 000 75 000 limit 100 000 25 000 Total 100 000 Problem 2 You are walking to your FIN 230 Final when one of your classmates afraid of being late comes speeding down the street and hits you You incur 40 000 in medical bills and would be entitled to a 200 000 bodily injury award but the other student is uninsured a 0 b 25 000 c 40 000 d 125 000 e None of the above Problem 2 Answer Correct answer D Both medical and un der insured coverage apply if you a struck by a motor vehicle as a pedestrian Medical 25 000 in medical coverage Uninsured 200 000 25 000 175 000 but 100 000 limit Total 25 000 100 000 125 000 Homework 3 Review State Farm Car Policy Your Use of Other Cars Other People s Use of Your Car Other People s Use of Other Cars HW 3 Question 1 Your 17 year old son Allen who lives with you borrows your car one evening Unknown to you he lets his 15 year old girlfriend drive your car She obviously needs practice since she backs into a gas pump damaging the pump and starting a fire that destroys the gas station and your car Fortunately neither Allen nor his girlfriend is injured in the accident It costs 1 275 000 to repair the gas station Your car has an ACV of 12 000 A 0 B 12 000 C 111 900 D 1 287 000 E None of the above HW 3 Answer 1 You are covered because it is your car If you were driving your son s car it would not be covered You driving Allen s girlfriend s car would be covered 100 000 Property Liability 12 000 Comprehensive 112 000 Comprehensive b c fire destroys car not accident HW 3 Question 2 Your 18 year old daughter Sarah who lives with you borrows your car one day to go shopping with her friends On the way to the mall they are involved in an accident that is Sarah s fault Two of her friends are seriously injured One incurs medical bills of 15 000 and is entitled to a bodily injury award of 30 000 The other incurs medical bills of 45 000 and is entitled to a bodily injury award of 135 000 Your daughter is not injured in the accident but she is ticketed for running a red light and fined 300 A 0 B 40 000 C 130 000 D 155 000 E None of the above HW 3 Answer 2 Covered b c it is …