How Insurance Rates Are Set.

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| By Jarredcope
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Jarredcope
Community Contributor
Quizzes Created: 1 | Total Attempts: 46
| Attempts: 46
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  • 1/15 Questions

    You should have insurance if you plan on driving a motor vehicle.

    • True
    • False
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About This Quiz

Explore how insurance rates are determined with a focus on factors like age, distractions, and location. Understand the impact of accidents and legal compliance on rates, enhancing knowledge in financial risk management.

How Insurance Rates Are Set. - Quiz

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  • 2. 

    Which age group generally has the highest insurance rates?

    • Teenagers

    • 20-30

    • 30-40

    • 40-50

    • 50-60

    • 60-80

    • 80+

    Correct Answer
    A. Teenagers
    Explanation
    Teenagers generally have the highest insurance rates because they are considered high-risk drivers. They have less driving experience and are more likely to engage in risky behaviors such as speeding or distracted driving. Additionally, teenagers are more prone to accidents due to their lack of maturity and impulsiveness. Insurance companies charge higher rates to offset the increased likelihood of claims and expenses associated with insuring this age group.

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  • 3. 

    Comprehensive coverage would cover which of the following?

    • Fire

    • Missles

    • Hail

    • Flood

    • Riots

    • Hitting a deer

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Comprehensive coverage would cover all of the mentioned events, including fire, missiles, hail, flood, riots, and hitting a deer. This type of insurance provides protection against a wide range of risks and damages, ensuring that the policyholder is financially covered in various situations.

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  • 4. 

    If you have a ________ deductible, you premiums will be lower.

    Correct Answer
    higher
    larger
    bigger
    high
    big
    large
    Explanation
    If you have a higher, larger, bigger, high, big, or large deductible, your premiums will be lower. A deductible is the amount of money you have to pay out of pocket before your insurance coverage kicks in. By choosing a higher deductible, you are taking on more financial responsibility in the event of a claim, which reduces the risk for the insurance company. As a result, they can offer lower premiums as a trade-off for the higher deductible amount.

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  • 5. 

    If you cause a 50 car pileup that totals 45 cars, your insurance rates will likely increase.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Causing a 50 car pileup that totals 45 cars indicates a significant level of negligence and responsibility for the accident. Insurance companies typically consider such incidents as high-risk behavior, leading to an increased likelihood of future accidents. Consequently, they raise insurance rates to mitigate potential losses. Therefore, it is reasonable to assume that causing such a massive accident would result in an increase in insurance rates.

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  • 6. 

    Being unisured and driving your car is _____________.

    Correct Answer
    bad
    not good
    stupid
    foolish
    ridiculous
    unwise
    irresponsible
    not a good choice
    Explanation
    Driving a car without insurance is a risky and irresponsible behavior. It is considered bad, not good, stupid, foolish, ridiculous, unwise, and an irresponsible choice because it exposes both the driver and others on the road to financial and legal consequences in case of an accident. Without insurance, the driver may have to bear the expenses of any damages or injuries caused, which can be substantial. Additionally, driving without insurance is against the law in many places, further emphasizing the importance of having proper coverage.

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  • 7. 

    Which policy will cover motorists that are under insured or uninsured?

    Correct Answer
    Uninsured motorist
    uninsured/under insured motorist
    uninsured
    Explanation
    The correct answer is "Uninsured motorist, uninsured/under insured motorist". These policies provide coverage for motorists who are either uninsured or underinsured. This means that if the insured driver is involved in an accident with a driver who does not have insurance or does not have enough insurance to cover the damages, the uninsured motorist or uninsured/under insured motorist policy will help cover the costs.

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  • 8. 

    Where would insurance rates likely be lower?

    • Washington, D.C.

    • Helix, Oregon

    • LA, California

    Correct Answer
    A. Helix, Oregon
    Explanation
    Insurance rates are likely to be lower in Helix, Oregon compared to Washington, D.C. and LA, California. This could be due to several factors such as the population density, crime rates, and the frequency of accidents and natural disasters in each location. Helix, Oregon is a small town with a lower population density and fewer incidents, making it less risky for insurance companies. On the other hand, Washington, D.C. and LA, California are densely populated areas with higher crime rates and more frequent accidents, leading to higher insurance rates.

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  • 9. 

    Women usually pay more insurance than men.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This statement is false. Women usually pay less insurance than men because statistically, women tend to be involved in fewer accidents and file fewer claims than men. Insurance companies use actuarial tables and historical data to determine insurance rates, and these factors contribute to the lower insurance costs for women.

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  • 10. 

    What is generally considered to be the greatest distraction while driving?

    • Cellphone

    • Missles

    • Zombies

    • Children

    • Fellow Drivers

    • Bright Lights

    • Shiny Cars

    Correct Answer
    A. Children
    Explanation
    Children are generally considered to be the greatest distraction while driving because they require constant attention and can be unpredictable. They may suddenly run into the road, make loud noises, or require assistance, causing the driver to divert their attention from the road. This distraction can significantly increase the risk of accidents and make it difficult for the driver to focus on driving safely.

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  • 11. 

    A shady character breaks into your car and steals not only your radio but your Adrian Peterson bobble head as well! What kind of insurance do you need?

  • 12. 

    You are involved in an accident that is the other person's fault. However, they don't have insurance. What kind of insurance do you need?

  • 13. 

    You collide with another car and its your fault. No one in your car is injured, but the driver of the other car breaks his nose. What kinds of insurance do you need?

  • 14. 

    You somehow drive your car straight into a wall. What kind of insurance do you need?

  • 15. 

    You hit another car, totaling both it and your car. You, your passenger, and the other driver are injured. What kinds of insurance do you need?

Quiz Review Timeline (Updated): Apr 27, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Apr 27, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 16, 2013
    Quiz Created by
    Jarredcope
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