Car Insurance Test-personal Finance
This quizzes you on how well you learned about car insurance!
Questions and Answers
- 1.
What is: Insurance that pays for the cost of injuries to people involved in an accident and protects the insured against financial loss from lawsuits and other legal expenses incurred as a result of an accident. There are two limits: the maximum that will be paid to any one person and the maximum for each accident.
- A.
Medical Payment Coverage
- B.
Bodily Insurance Liability
- C.
"No Fault" Insurance
Correct Answer
B. Bodily Insurance LiabilityExplanation
Bodily Insurance Liability is the correct answer because it refers to insurance that covers the cost of injuries to people involved in an accident. It also protects the insured against financial loss from lawsuits and other legal expenses resulting from an accident. This type of insurance has two limits: one for the maximum amount that will be paid to any one person and another for the maximum amount for each accident.Rate this question:
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- 2.
What is: Insurance that pays the medical expenses and the cost of health care of those in the insured's automobile that were injured, including the insured.
- A.
Medical Payment Coverage
- B.
Collision
- C.
Bodily Insurance Liability
Correct Answer
A. Medical Payment CoverageExplanation
Medical Payment Coverage is an insurance that covers the medical expenses and healthcare costs of individuals who were injured in the insured's automobile, including the insured themselves. This type of coverage is specifically designed to provide financial protection for medical bills resulting from accidents or injuries sustained in a car. It helps to ensure that those involved in the accident receive necessary medical treatment without having to worry about the financial burden.Rate this question:
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- 3.
What is: Insurance that protects against financial loss, within limits, when the insured damages the property of others. This primarily applies to vehicles but could also include street signs, lampposts, and buildings.
- A.
Collision
- B.
Comprehensive
- C.
Property Damage Liability
Correct Answer
C. Property Damage LiabilityExplanation
Property Damage Liability is the correct answer because it refers to insurance that provides coverage for financial loss when the insured causes damage to the property of others. This type of insurance is primarily applicable to vehicles but can also include other types of property such as street signs, lampposts, and buildings. Collision insurance, on the other hand, covers damage to the insured's own vehicle in the event of a collision, while comprehensive insurance provides coverage for damage caused by non-collision events such as theft, vandalism, or natural disasters.Rate this question:
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- 4.
What is: Insurance that covers the cost of injuries to the insured and his or her family if the insured is in a "hit and run" accident or in an accident with someone that does not have insurance, or when the other driver does not have adequate coverage for the damage caused to the insured.
- A.
Collision Physical Damage
- B.
Uninsured Motorist's protection
- C.
"No Fault" Insurance
Correct Answer
B. Uninsured Motorist's protectionExplanation
Uninsured Motorist's protection is the correct answer because it refers to insurance coverage that pays for injuries to the insured and their family if they are involved in an accident with an uninsured or underinsured driver. This coverage is especially important in cases of hit and run accidents or accidents with drivers who do not have adequate insurance to cover the damage caused to the insured.Rate this question:
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- 5.
What is: A program in which an insured can collect medical expenses, lost wages and injury costs from their insurance company, as a means to expedite paying for damages until the process of determining fault is complete.
- A.
"No Fault" Insurance
- B.
Assigned Risk Pool
- C.
Collision
Correct Answer(s)
A. "No Fault" Insurance
B. Assigned Risk PoolExplanation
"No Fault" Insurance is a program where an insured individual can collect medical expenses, lost wages, and injury costs from their insurance company without having to determine fault. This means that regardless of who caused the accident, the insured can still receive compensation for their damages. This type of insurance is designed to expedite the payment process and provide financial support to the insured until fault is determined. Assigned Risk Pool, on the other hand, refers to a system where high-risk individuals are assigned to insurance companies that are required to provide coverage to them. Collision refers to insurance coverage that pays for damages to the insured's vehicle in the event of a collision.Rate this question:
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- 6.
What is: Individuals unable to obtain insurance due to a poor driving record or accident, obtain insurance-albeit at high rates-through a state program whereby insurance companies must accept some such drivers.
- A.
Comprehensive
- B.
Collision
- C.
Assigned Risk Pool
Correct Answer
C. Assigned Risk PoolExplanation
The given statement describes a situation where individuals with a poor driving record or accident history are unable to obtain insurance from regular insurance companies. In such cases, these individuals can obtain insurance through a state program called an assigned risk pool. This program requires insurance companies to accept some of these high-risk drivers and provide them with insurance, albeit at high rates. Therefore, the correct answer is Assigned Risk Pool.Rate this question:
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- 7.
A ____________ owns the insurance company.
Correct Answer
Policy HolderExplanation
The correct answer is "Policy Holder." A policy holder is an individual or entity that owns an insurance policy. They are the one who purchases the insurance coverage and pays the premiums. As the owner of the policy, they have the right to make claims and receive benefits from the insurance company based on the terms and conditions outlined in the policy contract.Rate this question:
- 8.
A contract of insurance between an insurance company and the policy holder is a ___________.
Correct Answer
Insurance policyExplanation
The correct answer is "Insurance policy." An insurance policy is a contract between an insurance company and the policyholder that outlines the terms and conditions of the insurance coverage. It specifies the types of risks covered, the premium to be paid, the duration of coverage, and the claims process. This contract legally binds both parties and ensures that the policyholder receives the agreed-upon benefits in case of covered events or losses.Rate this question:
- 9.
A(n)__________ is covered by an insurance policy.
Correct Answer
insuredExplanation
The term "insured" refers to a person or entity that is protected by an insurance policy.Rate this question:
- 10.
The amount the insured must pay before financial benefits are paid by the insurance company is called the ______________.
Correct Answer
DeductibleExplanation
The amount the insured must pay before financial benefits are paid by the insurance company is called the deductible. This is an agreed-upon amount that the policyholder must pay out of pocket before the insurance coverage kicks in. It is a way for insurance companies to share the financial burden with the insured and prevent small or routine claims from being filed. The deductible amount can vary depending on the insurance policy and is typically stated in the terms and conditions of the contract.Rate this question:
- 11.
The cost of the insurance policy is called the _____________.
Correct Answer
PremiumExplanation
The cost of an insurance policy is referred to as the premium. This is the amount that the policyholder pays to the insurance company in exchange for coverage. The premium can be paid in different ways, such as monthly, quarterly, or annually, depending on the terms of the policy. The insurance company uses the premium to cover the potential risks and expenses associated with providing insurance coverage to the policyholder.Rate this question:
- 12.
Insurance that pays for the damage to the uninsured's automobile, regardless of whether the insured caused the accident is called ____________.
Correct Answer
CollisionExplanation
Collision insurance is a type of auto insurance that covers the cost of repairs or replacement for the insured's vehicle in the event of a collision, regardless of who is at fault. This means that even if the insured caused the accident, their insurance policy will still pay for the damages to their own vehicle. Collision insurance is particularly useful for uninsured individuals, as it ensures that they are protected financially in case of an accident.Rate this question:
- 13.
Insurance that provides financial protection against loss from the damage caused by something other than collision, such as fire, theft, and vandalism is called _______________.
Correct Answer
Comprehensive Physical DamageExplanation
Comprehensive Physical Damage insurance provides financial protection against loss from damage caused by something other than collision, such as fire, theft, and vandalism. This type of insurance covers a wide range of risks and ensures that the policyholder is protected from various non-collision incidents that could result in damage to their vehicle.Rate this question:
- 14.
Describe to me what these specific numbers mean for a insured person: 100/300/50.
- 15.
This pays you for part of the cost of a rented car if your car is disabled because of a collision or comprehensive-covered repair. pg. 239
Correct Answer
Car Rental InsuranceExplanation
pg. 239Rate this question:
- 16.
What is another word for at fault? pg. 238
Correct Answer
negligentExplanation
The word "negligent" is another term that can be used to describe being at fault. It refers to someone who fails to take proper care or responsibility, resulting in harm or damage. In this context, "at fault" and "negligent" can be used interchangeably to indicate the person or party responsible for a mistake or wrongdoing.Rate this question:
- 17.
You are not required to have Car insurance in California.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Yes, it's the law.Rate this question:
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- 18.
Auto insurance companies are a non-profit agency, they will insure anyone at a low cost.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
False. This statement is incorrect. Auto insurance companies are for-profit businesses that provide insurance coverage for vehicles. They assess risk factors and determine premiums based on various factors such as driving history, age, and type of vehicle. They are not obligated to insure anyone and the cost of insurance can vary depending on the individual's risk profile.Rate this question:
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- 19.
Statisticians are also called ___________________. pg. 239
Correct Answer
actuariesExplanation
The term "actuaries" is used to refer to statisticians. This suggests that statisticians can also be referred to as actuaries. The page number provided, page 239, indicates that this information can be found in a specific source or reference.Rate this question:
- 20.
Do you need to have insurance when taking a drivers test?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Yes, if you're driving a car it must be insured.Rate this question:
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general insurance agent practice questions with answers
general insurance agent practice questions with answers
Know Everything About Insurance Policies - Insurance Quiz
Know Everything About Insurance Policies - Insurance Quiz
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