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Car Insurance Flashcards

7 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Car Insurance flashcards as text

  1. What does 'personal injury protection' (PIP) cover in a no-fault state?

    Answer: Your own medical expenses and lost wages regardless of fault

    PIP pays for your medical bills, lost wages, and related costs after an accident without requiring you to prove the other driver was at fault.

  2. How does raising your deductible from $500 to $1,000 generally affect your car insurance premium?

    Answer: The premium decreases because you are sharing more of the risk

    A higher deductible means you pay more out of pocket per claim, which reduces the insurer's exposure and lowers your premium.

  3. Which practice is considered 'insurance fraud' in the context of car insurance?

    Answer: Filing a claim for pre-existing damage not related to the covered accident

    Claiming pre-existing damage under a new incident is misrepresentation, which constitutes insurance fraud and is illegal.

  4. What does 'SR-22' refer to in car insurance?

    Answer: A certificate of financial responsibility filed by an insurer to confirm minimum liability coverage

    An SR-22 is a form your insurer files with the state to prove you carry the required liability coverage, usually ordered after serious violations.

  5. In a 'fault' (tort) state, who is generally responsible for paying damages after a car accident?

    Answer: The driver determined to be at fault and their insurer

    In fault states, the at-fault driver's liability insurance pays for the other party's injuries and property damage.

  6. What is the main difference between 'agreed value' and 'stated value' in classic car insurance?

    Answer: Agreed value pays the full insured amount with no depreciation; stated value may pay less

    Agreed value policies pay the full amount both parties agreed to at policy inception; stated value allows the insurer to pay the lesser of stated value or ACV.

  7. Which of the following best describes 'underinsured motorist coverage' (UIM)?

    Answer: Coverage that pays when the at-fault driver's limits are too low to cover your full damages

    UIM kicks in when the at-fault driver carries liability insurance but not enough to fully compensate you for your injuries or damages.