Question 1

Which of the following is not a determinant of the cost of your automobile insurance rates?
A) Your age
B) Your credit score
C) Your driving record
D) Your marital status
E) The number of children that you have

Accepted Answer

The number of children that you have is not a determinant of the cost of your automobile insurance rates. Factors such as your age, credit score, driving record, and marital status are considered by insurance companies when determining your insurance rates.

Question 2

Which of the following is a way for consumers to keep their automobile insurance rates down?
A) Improve their driving records.
B) Lower their deductibles.
C) Consider only high-quality insurers.
D) Both A and C

Accepted Answer

Improving their driving records will show insurers that the person is a safe driver and less of a risk to insure, which can lead to lower rates. Additionally, considering only high-quality insurers can ensure that the person is getting their money's worth and not paying for unnecessary extras. Lowering deductibles may actually increase insurance rates, as it means the person is taking on less risk and the insurer is taking on more.

Question 3

Rosemary was hit by another vehicle on the way home from work.She believes the other driver was under the influence of alcohol.Rosemary is not within her rights to demand that the other driver take an alcohol test.

Accepted Answer

If a driver is involved in an accident and there is suspicion of alcohol or drug use, the other driver can be required to take a blood, breath or urine test, depending on the laws of the state. This is known as a chemical test, and refusing to take it can result in consequences such as license suspension or revocation.

Question 4

In you are involved in an automobile accident and suspect the other driver may have been driving under the influence,you should request that the police perform sobriety tests on both of you.

Accepted Answer

Requesting sobriety tests on both drivers can help determine if one or both drivers were under the influence, which is important for insurance claims and possible legal action. It is always better to be safe and ensure that all necessary steps are taken in the aftermath of an accident.

Question 5

What characteristics will affect the cost of your car insurance?
A) The type of automobile you drive
B) Where you reside
C) How many miles you drive
D) All of the above
E) All but B are correct.

Accepted Answer

The type of automobile you drive, where you reside, and how many miles you drive are all common factors that impact car insurance costs. The make, model, and age of a vehicle affect the cost of repairing or replacing it in case of an accident. The location of your residence is used to evaluate the likelihood of theft or vandalism, as well as the frequency and severity of accidents in your area. The more miles you drive, the greater the chance of being in an accident, and thus, the higher your insurance rates may be. Therefore, all three factors can contribute to either an increase or decrease in the cost of car insurance premiums.

Question 6

Which of the following are not discounts for PAP coverage?
A) Good student discount
B) Anti-theft equipment discount
C) Low miles per gallon discount
D) Accident free discount
E) All of the above are discounts for PAP.

Accepted Answer

Low miles per gallon discount is not a discount for PAP coverage.

Question 7

Young ________ generally pay the most for their insurance,because they have a statistically greater chance of having an accident.
A) married females
B) unmarried males
C) married males
D) unmarried females

Accepted Answer

Statistics show that young, unmarried males are the most likely demographic to be involved in car accidents, making them a higher risk for insurance companies to cover. This leads to higher insurance premiums for this group.

Question 8

Why is it a good idea for you to purchase uninsured and underinsured motorist coverage?
A) 15% of drivers have no automobile insurance.
B) A majority of drivers only carry the legal minimum liability coverage.
C) This coverage protects you and your passengers for medical expenses.
D) All of the above are correct.

Accepted Answer

It is a good idea to purchase uninsured and underinsured motorist coverage because 15% of drivers have no automobile insurance, a majority of drivers only carry the legal minimum liability coverage, and this coverage protects you and your passengers for medical expenses.

Question 9

Deon tried to merge onto the Atlantic Expressway and caused a three-car accident.He has automobile insurance with limits of 50/100/25.What is the maximum amount that his insurance company will pay for the bodily injury liability claims?
A) $50,000
B) $75,000
C) $100,000
D) $125,000

Accepted Answer

The numbers 50/100/25 in the insurance policy limits represent the maximum amounts that the insurance company will pay for bodily injury liability claims per person, per accident, and for property damage liability, respectively. In this case, the insurance company will pay a maximum of $50,000 per person, up to a total of $100,000 per accident for bodily injury liability claims. Therefore, the correct answer is C, $100,000.

Question 10

Most professional financial planners recommend carrying at least $100,000 in bodily injury liability coverage per person,$300,000 in bodily injury liability coverage for all persons,and $100,000 in property damage liability coverage.

Accepted Answer

This statement accurately reflects the recommendations of many professional financial planners regarding the minimum levels of liability coverage for auto insurance policies.

Question 11

Driving at 55 miles per hour for five seconds-the minimum amount of time that texting takes your attention off of the road-you'll travel the length of a football field without looking.

Accepted Answer

True. At 55 miles per hour, a car travels approximately 80 feet per second. In five seconds, it would travel 400 feet, which is the length of a football field. During that time, if the driver is texting, their attention is not on the road, making it extremely dangerous.

Question 12

A teenage driver crashes her parents' minivan into an office building,causing $85,000 in damage to the building.The automobile liability insurance limits are 100/250/75.How will the damages be allocated between the driver and the insurance company?
A) The driver will be responsible for $85,000.
B) The driver will be responsible for $75,000, the insurance company for $10,000.
C) The driver will be responsible for $10,000, the insurance company for $75,000.
D) The insurance company will be responsible for $85,000.

Accepted Answer

The insurance policy has liability limits of 100/250/75, which means the most the insurance company will pay for bodily injury liability for one person is $100,000, the most they will pay for bodily injury liability for all injured people in one accident is $250,000, and the most they will pay for property damage liability is $75,000. Since the damages to the office building are $85,000 and the property damage liability limit is $75,000, the insurance company will pay only up to $75,000. The remaining $10,000 will be the responsibility of the driver.

Question 13

The use of insurance credit scoring is more common with the sale of homeowner's insurance coverage than it is with automobile insurance coverage.

Accepted Answer

Insurance credit scoring is more commonly used in the underwriting process for automobile insurance than for homeowner's insurance. This is because insurers have found a statistical correlation between credit scores and the likelihood of filing claims, particularly in auto insurance.

Question 14

Which of the following are among the most common driver distractions that lead to insurance claims?
A) Talking on cell phones
B) Applying make-up or shaving
C) Reading something
D) Eating something
E) All of the above are cited as the most common driver distractions.

Accepted Answer

All of the listed distractions (talking on cell phones, applying make-up or shaving, reading something, and eating something) are commonly cited as causing driver distractions that lead to insurance claims.

Question 15

Which of the following will most likely pay the least for automobile insurance,assuming they all drive identical cars?
A) A 29-year-old woman with a good credit score and driving record
B) A 55-year-old woman with two drunk driving arrests
C) A 32-year-old married man with bad credit and a bad driving record
D) A 20-year-old man who drives 50,000 miles per year and lives in a big city

Accepted Answer

The 29-year-old woman with a good credit score and driving record is most likely to pay the least for automobile insurance as she has a good driving record and credit score, which are factors that insurance companies consider when determining rates. The 55-year-old woman with two drunk driving arrests and the 32-year-old married man with bad credit and a bad driving record are both high-risk drivers, which leads to higher insurance rates. The 20-year-old man who drives 50,000 miles per year and lives in a big city is also considered high-risk due to the high mileage and increased likelihood of accidents in a city environment.

Question 16

You had several of your son's friends over last night for a sleepover.While dropping off their child,one of the parents did not see your basketball hoop and smashed it beyond repair with her car.Where would you look for damage payment?
A) The driver's homeowner's insurance
B) Section II of the driver's homeowner's insurance
C) The driver's automobile liability coverage
D) The driver's automobile comprehensive insurance
E) The driver's automobile collision insurance

Accepted Answer

The driver's automobile liability coverage would cover damage caused by the driver to someone else's property, including in this case, the basketball hoop. The other options (A, B, D, and E) relate to coverage for damage to the driver's own property and would not apply in this situation.

Question 17

If you have a significant amount of assets,most financial planners recommend the following automobile liability insurance limits.
A) 50/100/25
B) 100/300/100
C) 250/500/100
D) 500/1,000/250

Accepted Answer

Financial planners typically recommend higher liability limits for individuals with significant assets as they have more to lose in the event of a lawsuit resulting from a car accident. Option C (250/500/100) provides coverage up to $250,000 per person injured in an accident, $500,000 for all injuries in an accident, and $100,000 for property damage. This coverage is sufficient for most individuals with significant assets. Option D (500/1,000/250) provides even higher coverage limits, but may not be necessary for everyone and can be quite expensive. Options A and B may not provide enough coverage for those with significant assets.

Question 18

What should a 20-year-old man consider when he is thinking about purchasing a new car?
A) The sportier the car he purchases is, the more his insurance will cost.
B) Because of his demographics, he will pay higher rates for car insurance.
C) The type of car he purchases could have a dramatic impact on the cost of his insurance.
D) All of the above are correct.
E) All but A are correct.

Accepted Answer

All of the statements are correct. Younger drivers, especially men, often face higher insurance rates due to statistical risks associated with their demographic. Additionally, the type of car, particularly sportier models, can significantly affect insurance costs.

Question 19

You were standing on the sidewalk waiting for a bus when a car lost control,jumped the curb,and hit you in the leg causing medical injuries.Which of the following provides reimbursement for your medical expenses?
A) The driver's collision coverage.
B) The driver's liability coverage.
C) Your comprehensive physical damages coverage.
D) Your medical expenses coverage
E) Both B and D are correct.

Accepted Answer

Choice B, the driver's liability coverage, would provide reimbursement for your medical expenses since it covers the at-fault driver's responsibility for any harm they cause to others. However, if the driver does not have enough liability coverage, your own medical expenses coverage (Choice D) would provide additional coverage for your medical expenses. Therefore, both Choice B and Choice D could be correct options.

Question 20

Heather was advised to take a defensive driving course as a means to reduce her annual auto insurance premium.Is this a true or a false suggestion?

Accepted Answer

Taking a defensive driving course can help reduce auto insurance premiums.

Quiz 10: Property and Liability Insurance

Which of the following is not a determinant of the cost of your automobile insurance rates?

Which of the following is a way for consumers to keep their automobile insurance rates down?

Rosemary was hit by another vehicle on the way home from work.She believes the other driver was under the influence of alcohol.Rosemary is not within her rights to demand that the other driver take an alcohol test.

In you are involved in an automobile accident and suspect the other driver may have been driving under the influence,you should request that the police perform sobriety tests on both of you.

What characteristics will affect the cost of your car insurance?

Which of the following are not discounts for PAP coverage?

Young ________ generally pay the most for their insurance,because they have a statistically greater chance of having an accident.

Why is it a good idea for you to purchase uninsured and underinsured motorist coverage?

Deon tried to merge onto the Atlantic Expressway and caused a three-car accident.He has automobile insurance with limits of 50/100/25.What is the maximum amount that his insurance company will pay for the bodily injury liability claims?

Most professional financial planners recommend carrying at least $100,000 in bodily injury liability coverage per person,$300,000 in bodily injury liability coverage for all persons,and $100,000 in property damage liability coverage.

Driving at 55 miles per hour for five seconds-the minimum amount of time that texting takes your attention off of the road-you'll travel the length of a football field without looking.

A teenage driver crashes her parents' minivan into an office building,causing $85,000 in damage to the building.The automobile liability insurance limits are 100/250/75.How will the damages be allocated between the driver and the insurance company?

The use of insurance credit scoring is more common with the sale of homeowner's insurance coverage than it is with automobile insurance coverage.

Which of the following are among the most common driver distractions that lead to insurance claims?

Which of the following will most likely pay the least for automobile insurance,assuming they all drive identical cars?

You had several of your son's friends over last night for a sleepover.While dropping off their child,one of the parents did not see your basketball hoop and smashed it beyond repair with her car.Where would you look for damage payment?

If you have a significant amount of assets,most financial planners recommend the following automobile liability insurance limits.

What should a 20-year-old man consider when he is thinking about purchasing a new car?

You were standing on the sidewalk waiting for a bus when a car lost control,jumped the curb,and hit you in the leg causing medical injuries.Which of the following provides reimbursement for your medical expenses?

Heather was advised to take a defensive driving course as a means to reduce her annual auto insurance premium.Is this a true or a false suggestion?