Auto Insurance Quiz

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.

What is the basic difference between liability insurance and collision insurance?

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

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?

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

Which of the following statements is not something you should be thinking when considering changes in your auto insurance policy?

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

Julien was involved in an accident in which he merged into another car, damaging the front fender of the other car. Julien is fully insured through his insurance company. Which component of Julien's insurance plan will cover the damage he caused to the other car? a. bodily injury b. property damage c. collision d. comprehensive damage

b. property damage

While driving recklessly, Thomas lost control of his car and accidentally drove it into the water fountain in his neighbor's front yard. Thomas is fully insured through his insurance company. Which of the following components of his insurance policy will cover the damage he caused to his neighbors fountain? a. bodily injury b. property damage c. collision d. comprehensive damage

b. property damage

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 AA Auto Insurance Type of Insurance Coverage Coverage Limits Annual Premiums Bodily Injury $25/$50,000 $22.50 $50/100,000 $31.75 $100/300,000 $40.25 Property Damage $25,000 $120.50 $50,000 $144.75 $100,000 $193.00 Collision $100 deductible $520.00 $250 deductible $415.25 $500 deductible $275.75 Comprehensive $50 deductible $110.25 $100 deductible $100.00

c. $54.85

Susie is thinking about changing her auto insurance policy at Fret-No-More Auto Insurance. Her current policy includes the following options: $50/100,000 limit for bodily injury, $25,000 limit for property damage, $250 deductible for collision, and $50 deductible for comprehensive. Which of the following changes would increase Susie's limits the most without increasing her monthly premium by more than $5.00?

c. Increase coverage on bodily injury to $100/300,000 and on property damage to $50,000.

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? Fret-No-More Auto Insurance Type of Insurance Coverage Coverage Limits Annual Premiums Bodily Injury $25/50,000 $21.35 $50/100,000 $32.78 $100/300,000 $42.10 Property Damage $25,000 $115.50 $50,000 $142.44 $100,000 $193.78 Collision $100 deductible $490.25 $250 deductible $343.33 $500 deductible $248.08 Comprehensive $50 deductible $105.79 $100 deductible $88.23

d. $831.92

What is no-fault insurance?

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