Auto Insurance: Protect Your Car and Finances

Question 1

Which of the following is NOT a standard type of auto insurance coverage?

Accepted Answer

Health

Answer

Liability

Answer

Collision

Answer

Comprehensive

Question 2

What is the primary purpose of liability insurance?

Accepted Answer

To compensate other drivers for injuries or damages caused by the insured driver

Answer

To cover medical expenses for the driver and passengers

Answer

To repair damage to the driver's own vehicle

Answer

To cover legal fees in case of an accident

Question 3

What is the purpose of a deductible in an insurance policy?

Accepted Answer

The amount the policyholder pays before the insurance company starts to make payments

Answer

The maximum amount the insurance company will pay for a claim

Answer

The monthly premium paid to the insurance company

Answer

The percentage of fault assigned to the driver in an accident

Question 4

Which of the following is an advantage of having a higher deductible?

Accepted Answer

Lower monthly insurance premiums

Answer

More comprehensive coverage

Answer

Faster claims processing

Answer

No impact on insurance costs

Question 5

What does comprehensive insurance typically cover?

Accepted Answer

Damage to the driver's vehicle from theft, vandalism, or natural disasters

Answer

Injuries and damages caused to other drivers and property

Answer

Medical expenses for the driver and passengers

Answer

Legal fees in case of an accident

Question 6

What is the primary role of an insurance agent?

Accepted Answer

To provide advice and assistance in selecting appropriate insurance policies

Answer

To process and pay claims

Answer

To enforce traffic laws

Answer

To sell insurance policies directly to customers

Question 7

Which of the following is NOT a common reason for an insurance claim to be denied?

Accepted Answer

Ignoring the doctor's orders related to an accident

Answer

Fraudulent information on the insurance application

Answer

Failure to pay premiums

Answer

Filing a claim after the statute of limitations has expired

Question 8

What is the primary purpose of collision coverage?

Accepted Answer

To cover damages to your vehicle caused by an accident with another vehicle

Answer

To cover damages to your vehicle caused by theft or vandalism

Answer

To cover damages to your vehicle caused by natural disasters

Answer

To cover damages to your vehicle caused by uninsured or underinsured drivers

Question 9

Which of the following factors will typically lead to increased auto insurance premiums?

Accepted Answer

Having multiple traffic violations

Answer

Having a clean driving record

Answer

Being an experienced driver

Answer

Driving a newer model vehicle

Question 10

What is the distinction between a deductible and a premium?

Accepted Answer

A deductible is the amount you pay out-of-pocket before insurance coverage begins, while a premium is the monthly payment you make to the insurance company.

Answer

A premium is the amount you pay out-of-pocket before insurance coverage begins, while a deductible is the monthly payment you make to the insurance company.

Answer

A deductible and a premium are the same thing.

Answer

Neither of the above

Question 11

What is the purpose of uninsured motorist coverage?

Accepted Answer

To provide financial protection if you are injured or your vehicle is damaged by an uninsured driver

Answer

To provide financial protection if your vehicle is stolen

Answer

To provide financial protection if you are injured or your vehicle is damaged by a hit-and-run driver

Answer

To provide financial protection if your vehicle is damaged by a natural disaster

Question 12

Which of the following is NOT a factor that can affect the amount of your auto insurance deductible?

Accepted Answer

Your credit score

Answer

The type of coverage you choose

Answer

Your driving record

Answer

The age of your vehicle

Question 13

What is the main purpose of personal injury protection (PIP) coverage?

Accepted Answer

To cover medical expenses for you and your passengers in case of an accident

Answer

To cover lost income if you are unable to work due to an accident

Answer

To cover funeral expenses in case of a fatal accident

Answer

To cover damage to your vehicle in case of an accident

Question 14

Which of these is NOT a type of auto insurance coverage?

Accepted Answer

Travel health insurance

Answer

Bodily injury liability

Answer

Collision

Answer

Comprehensive

Question 15

Which auto insurance coverage type protects your car from damage caused by theft, vandalism, or weather events?

Accepted Answer

Comprehensive coverage

Answer

Collision coverage

Answer

Liability coverage

Answer

Personal injury protection (PIP) coverage

Question 16

What is the primary purpose of collision coverage?

Accepted Answer

To cover damages to your car if you hit another object

Answer

To cover damages to your car if it is stolen

Answer

To cover medical expenses if you are injured in an accident

Answer

To cover legal fees if you are sued for an accident

Question 17

What is the deductible on an auto insurance policy?

Accepted Answer

The amount you pay out of pocket before the insurance company covers costs

Answer

The total amount you pay for auto insurance coverage

Answer

The amount the insurance company pays for damages

Answer

The percentage of damages covered by the insurance company

Question 18

What is the key distinction between liability and comprehensive coverage?

Accepted Answer

Liability covers damages you cause to others, while comprehensive covers damages to your own car

Answer

Liability covers damages to your car, while comprehensive covers damages you cause to others

Answer

Both liability and comprehensive cover damages to your car

Answer

Both liability and comprehensive cover damages caused by you to others

Question 19

When should you consider purchasing uninsured/underinsured motorist coverage?

Accepted Answer

When you live in an area with a high rate of uninsured drivers

Answer

When you have a new car

Answer

When you have a lot of assets

Answer

When you have a long commute

Question 20

What is the primary function of a personal injury protection (PIP) rider?

Accepted Answer

To cover medical expenses and lost wages if you are injured in an accident

Answer

To cover damages to your car if it is damaged in an accident

Answer

To cover legal fees if you are sued for an accident

Answer

To cover the cost of replacing your car if it is stolen

Question 21

What is the primary role of an insurance agent in the auto insurance process?

Accepted Answer

To assist you in comparing policies and finding the best coverage for your needs

Answer

To process claims and handle payments

Answer

To investigate accidents and determine fault

Answer

To set rates for auto insurance policies

Question 22

Which of the following is a potential benefit of bundling your auto insurance with other types of insurance?

Accepted Answer

Potential discounts on premiums

Answer

Easier claims processing

Answer

More comprehensive coverage

Answer

Guaranteed coverage for all your insurance needs

Question 23

What is the recommended course of action if you are involved in an accident?

Accepted Answer

Move to a safe location, exchange information with the other driver, and contact the police if necessary

Answer

Leave the scene of the accident immediately

Answer

Call the police, even if the accident is minor

Answer

Admit fault to the other driver

Question 24

Which of the following is **not** a type of auto insurance coverage?

Accepted Answer

Health

Answer

Liability

Answer

Collision

Answer

Comprehensive

Question 25

What is the primary purpose of liability insurance?

Accepted Answer

Protects you from lawsuits if you cause an accident

Answer

Covers damage to your own vehicle

Answer

Covers medical expenses for passengers

Answer

Covers theft of your vehicle

Question 26

Which type of coverage pays for repairing or replacing your vehicle after an accident with another driver?

Accepted Answer

Collision

Answer

Comprehensive

Answer

Liability

Answer

Personal injury protection

Question 27

What is a deductible?

Accepted Answer

The amount you pay out of pocket before insurance coverage applies

Answer

The maximum amount your insurance company will pay

Answer

The cost of your monthly insurance premium

Answer

The amount you receive from your insurance company after an accident

Question 28

What is the key difference between comprehensive and collision coverage?

Accepted Answer

Collision covers damage from accidents while comprehensive covers damage from theft or vandalism

Answer

Comprehensive covers damage from accidents while collision covers damage from theft or vandalism

Answer

Both cover damage from accidents and theft/vandalism

Answer

Neither covers damage from accidents or theft/vandalism

Question 29

What is the primary purpose of collision coverage?

Accepted Answer

To cover damages to your own vehicle in case of a collision

Answer

To cover damages to other vehicles and property in case of an accident

Answer

To cover medical expenses in case of an accident

Answer

To cover lost wages in case of an accident

Question 30

How is a deductible different from a premium?

Accepted Answer

A deductible is the amount you pay out-of-pocket before insurance coverage begins, while a premium is the monthly or annual cost of insurance.

Answer

A premium is the amount you pay out-of-pocket before insurance coverage begins, while a deductible is the monthly or annual cost of insurance.

Answer

A deductible and a premium are the same thing.

Answer

A premium is the amount you pay out-of-pocket for each claim, while a deductible is the monthly or annual cost of insurance.

Question 31

What is a primary function of an insurance agent or broker?

Accepted Answer

To assist in comparing and selecting an appropriate auto insurance policy

Answer

To file claims on behalf of clients

Answer

To repair vehicles in case of an accident

Answer

To provide legal advice in case of an accident

Question 32

What is the main purpose of auto insurance?

Accepted Answer

To compensate individuals for property damage and bodily injuries resulting from accidents

Answer

To cover the costs associated with vehicle repairs and maintenance

Answer

To protect against financial losses due to theft or vandalism

Answer

To provide legal representation in case of an accident

Question 33

Which type of auto insurance coverage provides protection against damages caused by non-collision events?

Accepted Answer

Comprehensive coverage

Answer

Collision coverage

Answer

Liability coverage

Answer

Personal injury protection (PIP)

Question 34

What is the purpose of a deductible in an auto insurance policy?

Accepted Answer

To reduce the overall cost of your premium

Answer

To increase the amount of coverage you receive

Answer

To lower the cost of repairs in case of an accident

Answer

To cover legal fees in the event of a lawsuit

Question 35

What type of insurance policy covers injuries sustained by the policyholder and their passengers, regardless of fault?

Accepted Answer

Personal injury protection (PIP)

Answer

Liability insurance

Answer

Collision insurance

Answer

Uninsured motorist coverage

Question 36

What is the primary purpose of uninsured motorist coverage?

Accepted Answer

To cover damages caused by drivers who do not have insurance

Answer

To supplement the amount of liability coverage available

Answer

To reimburse for medical expenses incurred in an accident

Answer

To protect against theft or vandalism

Question 37

Which of the following types of auto insurance covers bodily injuries and property damage caused to others in an accident you are responsible for?

Accepted Answer

Liability insurance

Answer

Collision insurance

Answer

Comprehensive insurance

Answer

Uninsured motorist insurance

Question 38

What type of insurance coverage reimburses you for damages to your vehicle in the event of an accident regardless of fault?

Accepted Answer

Collision insurance

Answer

Liability insurance

Answer

Comprehensive insurance

Answer

Personal injury protection

Question 39

What is the purpose of a deductible in an auto insurance policy?

Accepted Answer

To reduce your out-of-pocket expenses in the event of a claim

Answer

To reduce your monthly premiums

Answer

To increase your coverage limits

Answer

To eliminate your risk of being involved in an accident

Question 40

True or False: Uninsured motorist insurance protects you if you are in an accident with a driver who does not have insurance.

Accepted Answer

True

Answer

False

Question 41

What is the purpose of a no-fault insurance system?

Accepted Answer

To eliminate the need for fault-based lawsuits after accidents

Answer

To raise insurance premiums for drivers who cause accidents

Answer

To increase the cost of auto insurance for all drivers

Answer

To lower the number of accidents on the road

Question 42

Which auto insurance policy offers the most extensive coverage, with a single limit shared for bodily injury and property damage among all insured parties?

Accepted Answer

Single-limit policy

Answer

Split-limit policy

Answer

Umbrella policy

Answer

Guaranteed-replacement-cost policy

Question 43

An insurance agent is assisting a client who caused a car accident that seriously injured the other driver. Which auto insurance coverage would protect the agent's client in this situation?

Accepted Answer

Liability Coverage

Answer

Collision Coverage

Answer

Comprehensive Coverage

Answer

Uninsured Motorist Coverage

Question 44

Which auto insurance coverage pays for repairs to your own car after an accident, even if you're responsible?

Accepted Answer

Collision

Answer

Liability

Answer

Comprehensive

Answer

Personal injury protection

Question 45

How do safety features in a vehicle affect auto insurance premiums?

Accepted Answer

They lower premiums because safety features reduce the likelihood of accidents.

Answer

They raise premiums because safety features are expensive to repair.

Answer

They have no effect on premiums.

Question 46

Which type of auto insurance coverage reimburses the policyholder for damages to their own vehicle, regardless of who is at fault?

Accepted Answer

Collision coverage

Answer

Uninsured motorist coverage

Answer

Liability coverage

Answer

Comprehensive coverage

Question 47

What is the primary purpose of liability insurance in auto insurance?

Accepted Answer

To cover bodily injury and property damage caused to others by the policyholder's driving actions.

Answer

To repair or replace the policyholder's vehicle in case of an accident.

Answer

To cover the policyholder's medical expenses after an accident.

Question 48

Which of the following factors is NOT considered when determining an auto insurance premium?

Accepted Answer

The policyholder's credit score

Answer

The policyholder's driving record

Answer

The make and model of the insured vehicle

Answer

The policyholder's age

Question 49

What is the definition of a 'deductible' in auto insurance?

Accepted Answer

The pre-determined amount the policyholder is responsible for paying out-of-pocket before the insurance coverage begins.

Answer

The maximum amount the insurance company will pay in the event of a claim.

Question 50

Which of the following is a primary reason for obtaining auto insurance?

Accepted Answer

To meet legal requirements and protect against potential financial liability in case of an accident.

Answer

To avoid paying for expensive repairs to the policyholder's vehicle.

Answer

To prevent the policyholder from losing their license in the event of an at-fault accident.

Question 51

What type of auto insurance coverage provides benefits for injuries sustained by passengers in the insured vehicle?

Accepted Answer

Personal injury protection (PIP)

Answer

Collision coverage

Answer

Comprehensive coverage

Answer

Uninsured motorist coverage

Question 52

Which advantage is commonly associated with bundling auto insurance with other types of insurance?

Accepted Answer

Reduced insurance premiums

Answer

Personalized customer service

Answer

Increased coverage limits

Answer

No deductibles for claims

Question 53

What is the main role of an insurance agent in auto insurance?

Accepted Answer

To provide personalized advice, compare policies, and assist in selecting the most suitable coverage.

Answer

To investigate and approve or deny claims

Answer

To handle billing and process payments

Question 54

Which of the following is NOT a factor used to assess the risk level of an individual driver for insurance purposes?

Accepted Answer

Occupation

Answer

Age

Answer

Location

Answer

Driving history

Question 55

What is the purpose of an insurance declaration page?

Accepted Answer

To provide a summary of essential policy information, including coverage details, limits, and premium amounts.

Answer

To list all potential risks and exclusions covered under the policy.

Answer

To provide a detailed history of all claims made under the policy