Insurance Car Insurance 3 — Questions and Answers
Question 1: Which type of car insurance coverage is required by law in almost every U.S. state?
- Comprehensive
- Collision
- Liability (Correct answer)
- Medical payments
Correct answer: Liability
Liability insurance is mandated in nearly all states to ensure drivers can compensate others for damages they cause.
Question 2: What does a '100/300/100' liability policy limit mean?
- $100K per person / $300K per accident / $100K property damage (Correct answer)
- $100 deductible / $300 premium / $100K maximum payout
- $100K total coverage split three ways
- $300K total bodily injury and $100K property damage combined
Correct answer: $100K per person / $300K per accident / $100K property damage
The split limit notation means $100,000 per injured person, $300,000 total per accident for injuries, and $100,000 for property damage.
Question 3: What happens to your car insurance rate if you file multiple claims within a short period?
- Rates automatically decrease due to loyalty discounts
- Rates typically increase at renewal (Correct answer)
- The insurer must maintain your current rate by law
- Claims have no effect on premiums
Correct answer: Rates typically increase at renewal
Multiple claims signal higher risk to insurers, which usually results in higher premiums at the next renewal.
Question 4: Which discount is most commonly offered by insurers to reward safe driving behavior?
- Good student discount
- Telematics or usage-based discount (Correct answer)
- Multi-car discount
- Paid-in-full discount
Correct answer: Telematics or usage-based discount
Telematics programs track your actual driving habits and reward low-risk behavior like smooth braking and limited night driving.
Question 5: What does 'actual cash value' (ACV) mean when an insurer settles a total loss claim?
- The original purchase price of the vehicle
- The cost to replace the vehicle with a brand-new model
- The market value of the vehicle at the time of loss, minus depreciation (Correct answer)
- The amount still owed on the auto loan
Correct answer: The market value of the vehicle at the time of loss, minus depreciation
ACV is the replacement cost of the vehicle minus depreciation, reflecting what the car was worth just before the loss.
Question 6: Which scenario would most likely result in an insurer denying a car insurance claim?
- The driver was going 5 mph over the speed limit
- The driver was using the car for ride-share work without a commercial endorsement (Correct answer)
- The accident occurred in an unfamiliar neighborhood
- The driver forgot to carry the insurance card at the time of the accident
Correct answer: The driver was using the car for ride-share work without a commercial endorsement
Using a personal auto for commercial ride-share activity without proper coverage is a material misrepresentation that can void a claim.
Question 7: What is the role of an 'insurance adjuster' after you file a car insurance claim?
- To sell you additional coverage
- To investigate the claim and determine the amount the insurer will pay (Correct answer)
- To represent your interests against the insurance company
- To perform the repairs on your vehicle
Correct answer: To investigate the claim and determine the amount the insurer will pay
An adjuster reviews evidence, assesses damage, and calculates the settlement amount on behalf of the insurer.
Insurance Car Insurance 3
Which type of car insurance coverage is required by law in almost every U.S. state?