Question 1

Which one of the following coverages would pay for healthcare for friends who were injured in your automobile?

Accepted Answer

Medical payments coverage is designed to pay for the medical expenses of the policyholder and their passengers, regardless of who is at fault in an accident. This includes friends who were injured while in your automobile.

Question 2

The purpose of financial responsibility laws is to:

Accepted Answer

Financial responsibility laws are designed to protect the public from physical harm and property damage losses caused by drivers, ensuring that individuals who cause accidents have the means to cover the costs of damages and injuries.

Question 3

Your home insurance policy has a $500 deductible.If a small fire causes $850 damage to your home,what amount of the claim would the insurance company pay?

Accepted Answer

The insurance company would pay the total damage amount minus the deductible, which is $850 - $500 = $350.

Question 4

The ________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.

Accepted Answer

The actual cash value method calculates the payment for claims based on the current replacement cost of an item minus depreciation, reflecting the item's current value rather than its cost to replace new.

Question 5

Which one of the following factors is used to determine a person's driver classification?

Accepted Answer

Age is a primary factor used in determining a person's driver classification, as it is often associated with the driver's experience level and risk profile.

Question 6

Which one of the following types of coverage would pay for damage to your automobile in an accident for which you were at fault?

Accepted Answer

Collision coverage is designed to cover damage to your automobile resulting from an accident, regardless of who is at fault.

Question 7

________ provides coverage for the risk of financial loss due to legal expenses,medical expenses,lost wages,and other expenses associated with injuries caused by an automobile accident for which you were responsible.

Accepted Answer

Bodily injury liability insurance covers the risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which the insured was responsible. It does not cover the insured's own injuries or property damage but rather the injuries to others for which the insured is liable.

Question 8

Your geographic location is a major factor in determining the ________ used to calculate your automobile insurance premiums.

Accepted Answer

The correct answer is "rating territory" because insurance companies use geographic locations to assess the risk associated with insuring a vehicle in that area, which in turn influences the calculation of insurance premiums.

Question 9

Thomas Joslin was judged at fault in an automobile accident.Three others were awarded damages of $125,000,$100,000,and $75,000.Thomas has 100/300 bodily injury liability coverage.What amount,if any,would not be covered by his insurance?

Accepted Answer

Thomas has 100/300 bodily injury liability coverage, which means his insurance covers up to $100,000 per person and up to $300,000 per accident. The damages awarded are $125,000, $100,000, and $75,000. The first person's damages exceed the per-person limit by $25,000 ($125,000 - $100,000), which is not covered by the insurance. The total damages ($300,000) do not exceed the per-accident limit, so the rest is covered.

Question 10

________ coverage would pay for damage to your vehicle regardless of fault.

Accepted Answer

Collision coverage pays for damage to your vehicle regardless of who is at fault in an accident.

Question 11

The 100 in 100/300/50 refers to:

Accepted Answer

The 100 in 100/300/50 typically refers to the limit for bodily injury claims that can be paid to one person in thousands of dollars, in this context of auto insurance coverage.

Question 12

Home insurance premiums are affected most directly by:

Accepted Answer

The number of claims in an area directly affects home insurance premiums because it reflects the risk level that the insurance company must cover. Higher numbers of claims typically indicate higher risks, leading to higher premiums for homeowners in that area.

Question 13

Wind damage occurs to your car costing $800 to repair.If you have a $500 deductible for collision and full coverage for comprehensive,what portion of the claim will the insurance company pay?

Accepted Answer

The answer of Wind damage occurs to your car costing...

Question 14

Henry Edwards was injured in an accident caused by another driver who did not have insurance.Henry's medical expenses would be covered by:

Accepted Answer

Uninsured motorists protection is specifically designed to cover medical expenses, among other costs, when the at-fault driver does not have insurance.

Question 15

Which of the following is a system in which drivers involved in an accident collect medical expenses,lost wages,and related injury costs from their own insurance company?

Accepted Answer

No-fault insurance is designed so that drivers collect financial losses from their own insurance company regardless of fault in the event of an accident. This system aims to lower the cost of auto insurance by removing the need for lengthy and expensive litigation processes to determine fault.

Question 16

Which one of the following refers to a category based on the driver's age,sex,marital status,and driving habits that is used to set automobile insurance premiums?

Accepted Answer

Driver classification is the method by which insurance companies categorize drivers based on factors such as age, sex, marital status, and driving habits to determine insurance premiums. This system allows insurers to assess the risk level of insuring a particular driver and set their premiums accordingly.

Question 17

________ protects you against financial loss when your car damages other vehicles,street signs,or buildings.

Accepted Answer

Property damage liability insurance is designed to cover the costs of damage that your vehicle causes to other people's property, including vehicles, buildings, and street signs.

Question 18

Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?

Accepted Answer

The coinsurance clause in an insurance policy requires the insured to pay for part of the loss if the property is not insured for a specified percentage of its replacement value. This clause is designed to encourage property owners to insure their property to value.

Question 19

Comprehensive physical damage coverage would cover financial losses due to:

Accepted Answer

Comprehensive physical damage coverage typically covers non-collision related incidents such as damage to your car caused by natural events like wind or hail.

Question 20

The 25 in 50/100/25 refers to ________ coverage.

Accepted Answer

The 25 in 50/100/25 refers to property damage liability coverage, indicating that the policy provides up to $25,000 coverage for damage to another person's property.

Quiz 10: Property and Motor Vehicle Insurance