Question 1

Elvis drove expensive cars.Which of the following was not a determinant in his automobile insurance costs?
A)Type of vehicle
B)His personal characteristics
C)His driving record
D)Where he lived
E)All of the above WERE determinants in the cost of his auto insurance.

Accepted Answer

All of the options listed are factors that insurance companies consider when determining the cost of automobile insurance. The type of vehicle affects rates due to repair costs and theft rates; personal characteristics, such as age and gender, can influence premiums; driving records reflect risk based on past behavior; and location can impact rates due to crime rates, traffic patterns, and other regional factors.

Question 2

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

Young males are statistically more likely to engage in risky driving behaviors and have more accidents than young females or older drivers. This results in higher insurance rates for unmarried males in the under 25 age group.

Question 3

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 factors that can affect the cost of your car insurance. Other factors may include your age, gender, driving record, and credit score.

Question 4

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

The driver's liability coverage would provide reimbursement for your medical expenses as the driver is at fault for causing the accident. Additionally, your own medical expenses coverage would also provide reimbursement for your medical expenses. Therefore, both option B and D are correct. Option A (the driver's collision coverage) would only provide reimbursement for damage to the driver's car, and option C (your comprehensive physical damages coverage) would only cover damages to your own car, but not medical expenses.

Question 5

Valerie was very angry at her soon to be exhusband and when she found his expensive sports car at his girlfriend's home she rammed into it with her pickup truck.Will her insurance policy cover the damage to her vehicle?
A)Yes,she has full coverage.
B)No,one of the exclusions on her policy says it will not cover if the damage was intentional.

Accepted Answer

Intentional damage is usually excluded from standard insurance policies, so Valerie's policy is likely to not cover the damage caused by her ramming her ex-husband's car with her truck.

Question 6

What are the areas covered in Part A: Liability coverage in a personal automobile policy?
A)Bodily injury,property damage,judgments awarded,court costs,legal defense fees
B)Bodily injury,property damage,court costs,legal defense fees,bail bond
C)Bodily injury,property damage,legal defense fees,bail bond,loss of wages
D)Bodily injury,judgments awarded,court costs,loss of wages
E)Judgments awarded,property damage,court costs,legal defense fees,bail bond

Accepted Answer

Part A of a personal automobile policy covers liability for bodily injury and property damage to others, as well as judgments awarded, court costs, and legal defense fees related to such a claim. Loss of wages and bail bond are not typically covered under Part A.

Question 7

Toldae and Natasha were driving their friends home when they rear-ended another car.They are worried about paying for the medical bills and possibly getting sued.Who will be covered under their Part B: Medical expense coverage?
A)Toldae,Natasha,and the people in the car they hit
B)Toldae,Natasha,and their friends
C)Their friends and the people in the other car
D)The driver and their friends
E)The driver and the people in the other car

Accepted Answer

Part B: Medical expense coverage typically covers the policyholder (in this case, Toldae and Natasha, assuming one of them is the policyholder), and any passengers in their vehicle at the time of the accident. It does not cover individuals in the other vehicle involved in the accident.

Question 8

Which of the following could increase the cost of your auto insurance?
A)Driving a sportier car
B)Driving more miles per year
C)Decreasing the amount of your deductible
D)All of the above

Accepted Answer

Driving a sportier car typically results in higher insurance premiums due to the increased likelihood of accidents and theft. Driving more miles per year also increases the risk of accidents and therefore raises insurance costs. Decreasing the amount of your deductible may lower your out-of-pocket costs in the event of an accident, but it also increases the risk to the insurance company and may result in higher premiums. Therefore, all of the above can increase the cost of your auto insurance.

Question 9

________ auto insurance pays for your losses and the losses suffered by your passengers,while the other driver's insurance would pay for his or her losses.This arrangement is made to keep insurance costs down,especially for settling claims.
A)Comprehensive
B)No-fault
C)Your fault
D)PAP
E)PIP

Accepted Answer

No-fault auto insurance is designed to reduce the number of lawsuits between drivers involved in accidents. Under this system, each driver's insurance pays for their own losses and the losses of their passengers, regardless of who was at fault. This helps keep insurance costs down and speeds up the claims process.

Question 10

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 11

________ would provide coverage for you against injuries caused by a negligent driver whose insurance company is insolvent.
A)Collision coverage
B)Personal liability coverage
C)Negligent driver rider
D)Uninsured motorist's protection coverage
E)None of the above

Accepted Answer

Uninsured motorist's protection coverage provides coverage for injuries caused by a negligent driver who does not have insurance or whose insurance company is insolvent.

Question 12

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 likely to pay the least for automobile insurance. Insurance companies typically offer lower rates to drivers who are perceived to be low-risk, such as female drivers with good credit and driving records. B, C, and D are all high-risk profiles, which will result in higher insurance premiums.

Question 13

Suppose that,during a party,one of your guests drove their car into the corner of your garage while turning around.Where would you look for damage payment to fix your garage?
A)Their homeowner's insurance
B)Your homeowner's insurance
C)Your guest's PAP liability coverage
D)Your guest's PAP comprehensive insurance
E)Your guest's PAP collision insurance

Accepted Answer

The guest's PAP liability coverage would cover the damage caused to the garage as a result of their negligent driving. The homeowner's insurance policies would not be responsible for fixing the damage caused by third-party guests. The guest's PAP comprehensive and collision insurance would only cover damages to their own vehicle, not the property of others.

Question 14

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

A "low miles per gallon" discount is not a typical discount for Personal Auto Insurance (PAP) coverage. The other options listed (good student discount, anti-theft equipment discount, and accident-free discount) are all common discounts offered by insurance companies for PAP coverage.

Question 15

You have liability only coverage on your car.It was damaged in the parking lot by a hit-and-run driver.What coverage do you have for your damages?
A)Their collision coverage
B)Their liability coverage
C)Your liability coverage
D)None of the above

Accepted Answer

Liability only coverage provides protection for damage you may cause to others, not for damage to your own vehicle. Therefore, in this scenario, you would not have coverage for your own damages under your policy.

Question 16

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 options listed (talking on cell phones, applying make-up or shaving, reading something, and eating something) are common driver distractions that significantly contribute to road accidents and, consequently, insurance claims.

Question 17

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

Uninsured and underinsured motorist coverage is a good idea because it protects you and your passengers in the event of an accident with a driver who either has no insurance or does not have enough insurance to cover your damages. According to statistics, approximately 15% of drivers are uninsured, and many more carry only the legal minimum liability coverage. This means that if you are in an accident with one of these drivers, you may be left with costly medical bills and property damage expenses. Having uninsured and underinsured motorist coverage can provide peace of mind and financial protection in these situations.

Question 18

What is it about liability coverage that makes it so important?
A)There is no way to know in advance what your potential liability loss will be.
B)Huge sums of money are handed out in settlements over lawsuits over auto accidents.
C)This coverage will pay all legal costs should you be involved in a civil case arising from an accident.
D)All of the above are correct.

Accepted Answer

All of the options listed are correct reasons for why liability coverage is important. It is impossible to predict what your potential liability loss could be, especially in the case of a serious accident. Settlements in lawsuits over auto accidents can reach very high amounts, making it crucial to have adequate coverage. Finally, liability coverage can also pay for legal costs associated with a civil case, which can be a significant amount of money.

Question 19

Verci and Banok skidded on the ice and hit a telephone pole.Their car suffered severe damage to the front end.This expense will be covered under part D called
A)liability coverage.
B)damage to your automobile coverage.
C)underinsured damage coverage.
D)property damage coverage.

Accepted Answer

Damage to the car is covered under the "damage to your automobile coverage" which is part of comprehensive and collision coverage. Option A (liability coverage) covers damages to other people's property or injuries but not the insured's own car. Option C (underinsured damage coverage) covers damages caused by a driver who has insufficient insurance to cover the damage. Option D (property damage coverage) is a type of liability coverage that covers damages caused by the insured to other people's property.

Question 20

Francis was just learning to drive.She forgot to put the car into park and it rolled down the driveway and into the neighbor's automobile.What part of her automobile insurance policy will cover the damage to her neighbor's automobile?
A)Part A: liability coverage
B)Part B: medical expense coverage
C)Part C: uninsured motorists coverage
D)Part D: damage to your automobile coverage

Accepted Answer

Liability coverage typically covers damages to other people's property, including automobiles. This means that Francis' liability coverage would cover the damage to her neighbor's automobile that was caused by her car rolling into it. The other choices - medical expense coverage, uninsured motorists coverage, and damage to your automobile coverage - do not typically cover damages to other people's property.

Quiz 10: Property and Liability Insurance

Elvis drove expensive cars.Which of the following was not a determinant in his automobile insurance costs?

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

What characteristics will affect the cost of your car insurance?

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?

Valerie was very angry at her soon to be exhusband and when she found his expensive sports car at his girlfriend's home she rammed into it with her pickup truck.Will her insurance policy cover the damage to her vehicle?

What are the areas covered in Part A: Liability coverage in a personal automobile policy?

Toldae and Natasha were driving their friends home when they rear-ended another car.They are worried about paying for the medical bills and possibly getting sued.Who will be covered under their Part B: Medical expense coverage?

Which of the following could increase the cost of your auto insurance?

________ auto insurance pays for your losses and the losses suffered by your passengers,while the other driver's insurance would pay for his or her losses.This arrangement is made to keep insurance costs down,especially for settling claims.

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

________ would provide coverage for you against injuries caused by a negligent driver whose insurance company is insolvent.

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

Suppose that,during a party,one of your guests drove their car into the corner of your garage while turning around.Where would you look for damage payment to fix your garage?

Which of the following are not discounts for PAP coverage?

You have liability only coverage on your car.It was damaged in the parking lot by a hit-and-run driver.What coverage do you have for your damages?

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

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

What is it about liability coverage that makes it so important?

Verci and Banok skidded on the ice and hit a telephone pole.Their car suffered severe damage to the front end.This expense will be covered under part D called

Francis was just learning to drive.She forgot to put the car into park and it rolled down the driveway and into the neighbor's automobile.What part of her automobile insurance policy will cover the damage to her neighbor's automobile?