Which of the Following Is True About Liability Insurance in a Homeowner's

question 55

Multiple Choice

Which of the following is true about liability insurance in a homeowner's policy?

• A)The amount of coverage you select should not be tied to the value of your home.
• B)It would pay for temporary housing while your home is repaired due to covered damage.
• C)It would reimburse a homeowner for damage done by a visitor.
• D)It would not cover you for a skiing accident where you cause injury to someone else.

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Definitions:

Product Warranty Costs

Expenses incurred by a company to repair, replace, or reimburse for products that fail to meet specified warranties.

Municipal Bonds

Debt securities issued by states, municipalities, or counties to finance capital expenditures.

Percentage Depletion

A tax deduction method that allows an owner or operator of a mine or other natural resources to deduct a percentage of the resource's value as it is depleted.

Asset/Liability Method

An approach in accounting where income taxes are adjusted based on the differences between the financial reporting and tax bases of assets and liabilities.