Car Insurance Flashcards

Under what circumstance can an insurer legally cancel your car insurance policy mid-term?

Answer: Your driver's license was suspended

A license suspension is a material change in risk that gives most insurers legal grounds to cancel coverage mid-term.

What is 'rental reimbursement coverage' in a car insurance policy?

Answer: An add-on that pays for a rental car while your vehicle is being repaired after a covered claim

Rental reimbursement coverage pays up to a daily limit for a rental car while your own vehicle is out of service due to a covered loss.

Which of the following vehicles typically requires a separate 'classic car' policy rather than a standard auto policy?

Answer: A 25-year-old restored muscle car driven occasionally to shows

Classic and collector cars appreciate over time and are used differently than daily drivers, so they need specialized agreed-value policies.

What is 'medical payments coverage' (MedPay) in auto insurance?

Answer: Coverage that pays your medical bills regardless of who caused the accident

MedPay covers medical expenses for you and your passengers after an accident, regardless of fault.

If you move to a new state, what should you do regarding your car insurance?

Answer: Notify your insurer and update the policy to meet the new state's minimum requirements

Each state has its own minimum coverage requirements, and your insurer must be notified of address changes to ensure compliance and accurate rating.

Which type of car insurance covers damage to your car caused by a tree falling on it during a storm?

Answer: Comprehensive

Comprehensive coverage pays for non-collision damage, including fallen trees, hail, fire, theft, and other acts of nature.

What is a 'non-owner' car insurance policy used for?

Answer: Providing liability coverage for someone who drives but doesn't own a car

Non-owner policies provide liability coverage when you drive cars you don't own, such as rentals or borrowed vehicles.