Understanding Auto Insurance and Coverages

What is liability coverage in auto insurance?

• Financial protection for a driver who harms someone else or their property

• Protection against natural disasters

• Financial compensation for medical expenses

• Coverage for repairing the driver's own vehicle

Explain the difference between collision and comprehensive coverage.

• Collision coverage pays for non-accident related incidents, while comprehensive coverage pays for damage in an accident.

• Collision coverage pays for non-accident related incidents, while comprehensive coverage pays for non-accident related incidents.

• Collision coverage pays for damage in an accident, while comprehensive coverage pays for damage in an accident.

• Collision coverage pays for damage in an accident, while comprehensive coverage pays for non-accident related incidents.

What does uninsured/underinsured motorist coverage protect you against?

• Damages caused by a driver with a luxury car

• Damages caused by a driver who is not at fault

• Damages caused by a driver who has no insurance or insufficient insurance

• Damages caused by a driver with a perfect driving record

What is personal injury protection (PIP) and why is it important?

• PIP is not important because it only covers minor injuries

• PIP is important because it only provides coverage for the at-fault driver

• PIP is not important because it is not required by law

• PIP is important because it provides coverage for medical expenses and lost wages, regardless of fault, and can help protect you and your passengers in the event of an accident.

Define deductibles and premiums in the context of auto insurance.

• Deductibles and premiums are the amount the policyholder must pay out of pocket before the insurance company pays a claim and the amount the policyholder pays for the insurance coverage, respectively.

• Deductibles and premiums are the amount the policyholder receives from the insurance company after making a claim and the amount the policyholder receives as a discount for safe driving, respectively.

• Deductibles and premiums are the amount the policyholder pays for the insurance coverage and the amount the insurance company pays to the policyholder after a claim is made, respectively.

• Deductibles and premiums are the amount the insurance company pays to the policyholder before a claim is made and the amount the insurance company charges for processing the claim, respectively.

How does liability coverage protect you in the event of an accident?

• It pays for the other party's medical expenses and property damage.

• It reimburses you for the time lost from work due to the accident.

• It covers the cost of repairing your own vehicle.

• It provides coverage for your own medical expenses.

What are some common exclusions in comprehensive coverage?

• Vandalism

• Parking lot accidents

• Natural disasters

• Intentional damage, wear and tear, mechanical breakdown, and damage from racing or illegal activities

Why is it important to have uninsured/underinsured motorist coverage?

• To save money on insurance premiums

• To cover damages to the other driver's vehicle

• To avoid legal penalties for not having coverage

• To protect yourself in case of an accident with an uninsured or underinsured driver.

What factors can affect the cost of your auto insurance premiums?

• Height, weight, blood type

• Age, driving record, location, type of vehicle, and coverage options

• Number of pets, shoe size, hair color

• Favorite color, favorite food, favorite movie

Explain the concept of stacking in the context of uninsured/underinsured motorist coverage.

• The process of piling up insurance paperwork

• The practice of combining different types of insurance coverage into one policy

• The ability to combine uninsured/underinsured motorist coverage limits from multiple vehicles or policies to increase the total coverage available.

• The act of physically stacking insurance cards on top of each other