Question 1

When considering pricing factors associated with the type of vehicle you drive, you may be eligible for a ________, if your car has antitheft devices, airbags, and other safety features.

Accepted Answer

Vehicles equipped with antitheft devices, airbags, and other safety features often qualify for a discount on insurance premiums, as they are considered lower risk.

Question 2

Bodily injury auto insurance coverage includes all of the following except

Accepted Answer

Bodily injury auto insurance coverage typically does not cover living expenses for you and any passengers injured in an auto accident. It primarily covers medical costs, legal defense costs, and judgments against you.

Question 3

If you have purchased auto liability, collision, and comprehensive physical damage coverage, which of the following would not be covered by your insurance policy?

Accepted Answer

Uninsured motorist coverage is a separate type of coverage that is not included in standard liability, collision, or comprehensive coverage.

Question 4

Collision coverage is insurance that will cover loss or damage to your own vehicle in the event of a(n)

Accepted Answer

Collision coverage specifically covers damage to your vehicle resulting from an auto accident, not from theft or natural disasters.

Question 5

If Mike Johnson still owes his credit union $10,000 for his car, he will be required to carry collision coverage and ________ coverage.

Accepted Answer

Comprehensive physical damage coverage is typically required by lenders to protect their financial interest in the vehicle against non-collision related damages.

Question 6

States specify minimums for ________ coverage, which covers injuries you cause to other people.

Accepted Answer

Auto liability coverage is required by states to cover injuries or damages you cause to other people in an accident.

Question 7

If the state of Louisiana has minimum auto liability limits of 25/100/20, what does the 100 represent?

Accepted Answer

The 100 in the 25/100/20 liability limits represents a $100,000 limit on payments to all persons in an accident.

Question 8

Melvin has auto insurance with the following liability limits: 25/50/10. If Melvin is in an accident where he is at fault, what is the maximum his insurance company will pay to fix the property of the car Melvin hit?

Accepted Answer

The third number in the liability limits (25/50/10) represents the maximum amount the insurance will pay for property damage per accident, which is $10,000.

Question 9

The Garcia family has three autos parked in their garage and two full-time drivers and two part-time drivers in the household. Which standard automobile insurance policy is for different family members driving either car?

Accepted Answer

A family automobile policy is a type of insurance policy that covers all members of a household who drive any of the household's vehicles.

Question 10

Consider a family with three drivers each driving their own car. Which standard auto policy should they choose?

Accepted Answer

The answer of Consider a family with three drivers each...

Question 11

If a shopping cart damages a car parked at the store, which type of auto insurance coverage will pay for the damage?

Accepted Answer

Comprehensive coverage typically pays for damages to a car that are not caused by a collision, such as theft, vandalism, or damage from a shopping cart.

Question 12

Some states have no-fault automobile insurance, which is a type of automobile insurance system in which the

Accepted Answer

In a no-fault automobile insurance system, each driver involved in an accident files a claim with their own insurance company and receives compensation from their own insurer, regardless of who was at fault in the accident.

Question 13

Which is not a factor that will usually affect your auto insurance premium?

Accepted Answer

Where you work is generally not a factor that affects auto insurance premiums, while risk characteristics, driving frequency, and vehicle type are.

Question 14

Which of the following is not a way that a consumer can reduce his or her auto insurance payments?

Accepted Answer

Choosing lower deductibles typically increases insurance premiums because the insurer would have to pay more in the event of a claim.

Question 15

An insurance agent who can only sell products for a specific insurer is known as a(n)

Accepted Answer

A captive agent is an insurance agent who works exclusively for one insurance company and can only sell that company's products.

Question 16

An insurance agent who represents many different insurance companies is known as a(n)

Accepted Answer

An independent agent represents multiple insurance companies and can offer clients a variety of policies from different insurers.

Question 17

Bill Writer was involved in an accident and wants to file a claim with his insurance company. Which of the following is not a step in the claims process?

Accepted Answer

Increasing the liability coverage on the policy is not a step in the claims process; it is a policy change action, not related to filing a claim.

Question 18

When you have a motor vehicle accident, you should do all of the following, except

Accepted Answer

You should not wait at the scene for an insurance adjuster. Instead, you should wait for the police, exchange insurance information, and gather witness contact information.

Question 19

Larry Walsh and his wife suffered a fire in their home and initialized the claims process a week ago. The adjuster assessed the loss and is prepared to write them a check for $100,000 today. Should Mr. Walsh accept the check?

Accepted Answer

It is advisable to wait before accepting settlements, as additional items and damage may be uncovered after the initial assessment.

Question 20

Documents you can use when you file a claim for losses include all of the following except

Accepted Answer

Names and addresses of emergency contacts are not typically required when filing a claim for losses. Receipts, a written description, and photographs are more relevant to substantiate the claim.

Quiz 7: Insuring Cars and Homes