★ Understanding and Comparing Types of Car Insurance - Auto Insurance Quiz Answers 1

After reviewing her driving record for the past 3 years, Cindy's insurance company offers her a good driver discount of 4.5%. Her original policy was based on the premiums listed below. What is her new annual premium including the discount?
A.) $504.24
B.) $523.50
C.) $551.76
D.) $528.00

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$504.24

In auto insurance, a higher deductible means the customer _____.
A.) has a higher monthly bill, but pays less out of pocket in the event of an accident.
B.) has a higher monthly bill and pays more out of pocket in the event of an accident.
C.) has a lower monthly bill and pays less out of pocket in the event of an accident.
D.) has a lower monthly bill, but pays more out of pocket in the event of an accident.

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has a lower monthly bill, but pays more out of pocket in the event of an accident.

In auto insurance, a lower deductible means the customer _____.
A.) has a higher monthly bill, but pays less out of pocket in the event of an accident.
B.) has a lower monthly bill, but pays more out of pocket in the event of an accident.
C.) has a lower monthly bill and pays less out of pocket in the event of an accident.
D.) has a higher monthly bill and pays more out of pocket in the event of an accident.

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has a higher monthly bill, but pays less out of pocket in the event of an accident.

What is the basic difference between liability insurance and collision insurance?
A.) Liability insurance protects against theft or vandalism, and collision insurance covers against accidents or crashes.
B.) Liability insurance is optional, but most states require collision insurance.
C.) Liability insurance covers damage that you cause, and collision insurance covers damage done to your vehicle.
D.) Liability insurance covers only medical injuries, and collision insurance covers only property damage.

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Liability insurance covers damage that you cause, and collision insurance covers damage done to your vehicle.

If you get into a car accident, your _______________ may increase because you will be considered riskier for insurance companies to cover.
A.) insurance premium
B.) claims adjustment
C.) car loan payment
D.) taxes

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insurance premium

What is no-fault insurance?
A.) No-fault insurance covers medical expenses incurred after an accident, regardless of which driver caused the crash.
B.) No-fault insurance provides full coverage for the entire car.
C.) No-fault insurance covers only damages that you did not cause.
D.) No-fault insurance is the default insurance that all drivers receive if they do not wish to purchase a special policy.

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No-fault insurance covers medical expenses incurred after an accident, regardless of which driver caused the crash.

Which of the following is not a factor that affects your auto insurance premiums?
A.) the color of your car
B.) year, make, and model of your car
C.) where you live
D.) overall value of your car

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the color of your car

Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5.2%. His original policy was set up using the premiums listed below. What is his new annual premium after the increase for the accident?
A.) $543.00
B.) $548.20
C.) $571.24
D.) $514.76

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$571.24

After being involved in a car accident last month, Ralph's insurance company has increased his annual premium by $105.38. Approximately what change will Ralph see on his future monthly statements as a result of the change?
A.) Ralph's monthly insurance payment will increase by $8.78.
B.) Ralph's monthly insurance payment will not change.
C.) Ralph's monthly insurance payment will increase by $17.56.
D.) Ralph's monthly insurance payment will increase $105.38.

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Ralph's monthly insurance payment will increase by $8.78.

The auto insurance plans available from Fret-No-More Auto Insurance are outlined in the table below. To be considered "full" coverage, an insurance plan must include one level of coverage from each category. What is the annual premium for the cheapest insurance plan available from Fret-No-More that is considered full coverage?
A.) $473.16
B.) $490.72
C.) $715.33
D.) $732.89

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$473.16

Below is the information from a brochure for Fret-No-More Auto Insurance outlining the insurance coverage options they offer. To be considered "full" coverage, an insurance plan must include one level of coverage from each category. What is the annual premium for the full-coverage insurance plan with the highest coverage limits and the lowest deductibles available from Fret-No-More?

A.) $572.19
B.) $473.16
C.) $732.89
D.) $831.92

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$831.92

Auto insurance options offered by AA Auto Insurance are outlined in the table below. What monthly payment would you expect for an insurance policy through AA Auto Insurance with the following options?
Bodily Injury: $25/50,000
Property Damage: $25,000
Collision: $250 deductible
Comprehensive: $100 deductible

A.) $64.44
B.) $43.23
C.) $46.10
D.) $54.85

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$54.85

Which of the following is not considered one of the four basic types of auto insurance?
A.) Legal Responsibility
B.) Collision
C.) Bodily Injury
D.) Property Damage

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Legal Responsibility

Which of the following statements is not something you should be thinking when considering changes in your auto insurance policy?
A.) Higher deductibles mean lower premiums but more out-of-pocket expense in the event of an accident.
B.) The premium you pay guarantees that you will never have to pay more than your deductible in the event of an accident.
C.) The more types of insurance you include in your policy, the more protected you are from financial loss in the event of an accident.
D.) Lower coverage limits mean lower premiums but more restrictions on the insurance company when covering injuries and damage resulting from an accident.

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The premium you pay guarantees that you will never have to pay more than your deductible in the event of an accident.

Check out Auto Insurance Quiz 2
Which of the following is not a reason young drivers have higher auto insurance premiums than older drivers?
A.) A very high percentage of teen deaths have been the result of motor vehicle crashes.
B.) A very high percentage of teenage drivers have had an accident in the first year of receiving a license.
C.) Accidents involving teenage drivers have required additional investigation, the cost of which is passed on to the driver in the form of a higher premium.
D.) Accidents involving teenage drivers have resulted in billions of dollars of medical expenses and property damage in recent years.

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Accidents involving teenage drivers have required additional investigation, the cost of which is passed on to the driver in the form of a higher premium.

Types of Car Insurance
There are many types of coverage within a car insurance policy, but many of them are optional (depending on which state you live in). Knowing what type of coverage applies in a given situation can be crucial to ensuring you have the right type of coverage to protect you from any situation you might encounter.



Part I: Name that Coverage
Read the description below, and correctly identify the type of coverage. Use the video “Understanding 5 Types of Car Insurance Coverage” as a reference to help make your decisions.

If your car was damaged in an accident, I’ve got your back. It doesn’t matter who was at fault while driving. However, if the damage came from something besides a crash, I won’t be around to help you.
A.) Collision Coverage
B.) Comprehensive Coverage
C.) PERSONAL INJURY PROTECTION
D.) LIABILITY COVERAGE
E.) Uninsured/Underinsured Coverage

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Collision Coverage

You are hit in an accident by another driver. At the hospital, you discover the other driver doesn’t have insurance to cover your medical bills. That’s when I kick in!
A.) Collision Coverage
B.) Comprehensive Coverage
C.) PERSONAL INJURY PROTECTION
D.) LIABILITY COVERAGE
E.) Uninsured/Underinsured Coverage

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Uninsured/Underinsured Coverage

Doesn’t matter who was at fault, if you’re in a car accident and need your injuries paid for, I’m there for you. Simple as that. However, anything beyond your injuries and I can’t help you.
A.) Collision Coverage
B.) Comprehensive Coverage
C.) PERSONAL INJURY PROTECTION
D.) LIABILITY COVERAGE
E.) Uninsured/Underinsured Coverage

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PERSONAL INJURY PROTECTION

I’m the best friend of new and/or expensive cars, because repairing even small damage can be incredibly costly. Did I mention that the damage doesn’t even have to be from an accident with another driver? Nope! If you hit an animal, or your car is stolen, or a tree falls on it, I’ve still got you covered! (But read my fine print because there are a few cases I won’t cover).
A.) Collision Coverage
B.) Comprehensive Coverage
C.) PERSONAL INJURY PROTECTION
D.) LIABILITY COVERAGE
E.) Uninsured/Underinsured Coverage

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Comprehensive Coverage

I’m the one you call when you cause damage to other people and vehicles. I protect others against you in case an accident is your fault (which protects you… in your wallet). But I won’t pay for any damage to your car or body.
A.) Collision Coverage
B.) Comprehensive Coverage
C.) PERSONAL INJURY PROTECTION
D.) LIABILITY COVERAGE
E.) Uninsured/Underinsured Coverage

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LIABILITY COVERAGE

Declarations Page
This is where you'll find your name, a statement of the policy period during which you are covered and the amount of premium you pay. It also includes a description of the insurance coverage provided and gives the maximum dollar limit the insurer will pay for a claim under each coverage.

Insuring Agreement
This main part of the policy describes what the insurance company will do in exchange for the premium you're paying and will also say who is covered. Everything is spelled out specifically in an attempt to avoid misunderstanding.

Conditions of the Policy
It describes your responsibilities when you have a claim, for example how much time you have to report it and what documentation you must give to the insurance company. It also explains the terms for canceling your policy—both for you and the insurer.

What will collision insurance cover in the event of an accident?
A.) Damage to someone else’s car
B.) Damage to your car
C.) Damage to someone else’s property
D.) Bodily injuries

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damage to your car

Insurance that covers damage to your car from an accident is called _______________
A.) collision insurance.
B.) liability insurance.
C.) comprehensive insurance.
D.) uninsured motorist insurance

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collision insurance.

Collision insurance is:
A.) insurance that will pay for injury to another driver and/or damage to their car if you are in an accident.
B.) insurance that will pay for damage to your car by someone who doesn’t have insurance.
C.) insurance that will cover injuries to yourself in the event of an accident.
D.) insurance that will pay to get your car fixed in the event of an accident.

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insurance that will pay to get your car fixed in the event of an accident.

Collision Insurance covers damage to your vehicle when it is involved in an accident. Collision insurance will pay to get your car fixed in the event of an accident.

What does liability insurance not cover in the event of an accident?
A.) Damage to someone else’s car
B.) Damage to someone else’s property
C.) Injury to yourself
D.) Injury to the other driver

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injury to yourself

An insurance premium is paid by _____________
A.) the insurance company.
B.) the claims adjuster.
C.) the government.
D.) the policyholder.

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the policyholder.

An insurance premium is:
A.) the amount of money you pay for an insurance policy.
B.) a commission paid to the agency for the purchase of a policy.
C.) an extra fee you need to pay your insurance for filing a claim out of network.

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the amount of money you pay for an insurance policy.

the amount of money you pay monthly/annually for an insurance policy

A deductible is paid by:
A deductible is paid by...
A.) the insurance company.
B.) the policyholder.
C.) the claims adjuster.
D.) the government.

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the policyholder.(YOU)

An insurance deductible is:
A.) the monthly premium on an insurance policy.
B.) a commission paid to the agency for the purchase of a policy.
C.) the amount you owe before insurance will cover the rest of the bill.
D.) the contract fee applied to the monthly premium.

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the amount you owe before insurance will cover the rest of the bill

When filing an insurance claim, the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.
A.) deductible
B.) premium
C.) contract fee
D.) commission

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deductible

when filing an insurance claim, the policyholder must pay a Insurance Deductible, which is the amount you owe before insurance will cover the rest of the bill

Why should you purchase insurance?
A.) To prevent a financial burden in the case of an accident, theft, or another event
B.) To get a warranty on a household item
C.) To purchase monthly premiums
D.) To avoid committing a crime

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to prevent a financial burden in the case of an accident, theft, or another event

How can insurance protect you from financial loss?
A.) Insurance can cover you or your property in case of an accident, theft, or another unpredictable event.
B.) Insurance can offer easy monthly payment options for premiums.
C.) Insurance can offer low co-insurance policies.
D.) Insurance can offer warranties on household items

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insurance can cover you or your property in case of an accident, theft, or another unpredictable event

Benefits of insurance to prevent a financial burden in the case of an accident, theft, or another event

What can insurance protect you from?
A.) Theft
B.) Contract fees
C.) Financial loss
D.) A and C

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A and C (Theft and Financial Loss)

What do people purchase as a form of risk management to protect themselves from losing a lot of money in the event something happens to them or their property?
A.) Insurance
B.) Deductibles
C.) Warranty
D.) Liability

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Insurance

An example of a risk management strategy is:
A. wearing a seat belt while driving.
B. carpooling.
C. wearing a helmet when biking.
D.) both A and C

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both A and C (wearing a seat belt while driving and wearing a helmet when biking.)

Wearing a seat belt, not texting when driving, and driving carefully are all examples of:
A.) insurance policies.
B.) risk management strategies.
C.) deductibles.
D.) warranties.

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Risk Management Strategies

Risk Management Strategy: using strategies to reduce the amount of risk (examples could be wearing reflective clothing while biking at night, wearing a helmet while biking, wearing a seat belt while driving)

Which is not an example of a risk management strategy?
A.) Wearing reflective clothing while biking at night
B.) Buying a new car
C.) Wearing a helmet while biking
D.) Wearing a seat belt while driving

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buying a new car

Why is it important to have insurance?
A.) It's important to have insurance so people can protect themselves from losing a lot of money in the event of an unpredictable event or something happens to them or their property.
B.) So individuals can defend against the possibility of financial loss due to unpredictable event
C.) So people can engage in risky behavior without financial consequences
D.) A and B

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Both A and B

Something people buy to protect themselves from losing a lot of money in the event something happens to them or their property is known as:
A.) risk management.
B.) liability.
C.) warranty.
D.) insurance.

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insurance

People purchase this as a form of risk management to protect themselves from losing a lot of money in the event something happens to them or their property

Liability insurance is:
A.) insurance that will pay for injury to another driver and/or damage to their car if you are in an accident.
B.) insurance that will pay for damage done by someone who doesn't have insurance.
C.) Insurance that will cover injuries to yourself in the event of an accident.
D.) insurance that will pay for damage to your car in the event of an accident.

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insurance that will pay for injury to another driver and/or damage to their car if you are in an accident

Insurance that will pay for injury to another driver and/or damage to their car if you are in an accident is called:
A.) comprehensive insurance.
B.) liability insurance.
C.) collision insurance.
D.) uninsured motorist insurance.

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liability insurance

The purpose of driving safety program is to increase road safety awareness by reducing traffic violations and to keep your auto insurance premiums low. Handle Speeding ticket, stop sign citation, lawyer for fighting traffic tickets & other violations.



BEFORE BUYING A CERTIFIED PRE OWNED WARRANTY USED CAR: Use car budget calculator - you can afford on used car • Choose appropriate car model • Check pre-owned car costs, fuel economy and other standard features • Purchase certified pre-owned car for manufacturer & additional extended warranty • Verify used cars documents - bill of sale, title transfers, duplicate title, license plate & registration • Get Best & cheap car insurance on used cars • Know service & vehicle history reports • Get used cars for sale nearby • Have pre purchase inspection - car exterior, interior, tyres & engine • Do test drive the car on different road conditions.