Motor Vehicle Division Insurance Requirements 2 — Questions and Answers
Question 1: What does collision coverage pay for?
- Medical expenses for passengers injured in an accident
- Damage to another person's vehicle when you cause an accident
- Damage to your own vehicle resulting from a collision with another vehicle or object (Correct answer)
- Liability claims made against you after an accident
Correct answer: Damage to your own vehicle resulting from a collision with another vehicle or object
Collision coverage pays to repair or replace your own vehicle when it is damaged in a collision with another vehicle or stationary object.
Question 2: Which type of coverage protects your vehicle from non-collision events such as theft, weather damage, or fire?
- Liability coverage
- Collision coverage
- Comprehensive coverage (Correct answer)
- Medical payments coverage
Correct answer: Comprehensive coverage
Comprehensive coverage protects your vehicle against losses from events other than collisions, including theft, fire, flood, vandalism, and natural disasters.
Question 3: What is a deductible in an auto insurance policy?
- The monthly premium you pay for insurance coverage
- The maximum amount the insurer will pay per claim
- The amount you must pay out of pocket before insurance covers the rest (Correct answer)
- A discount applied to your premium for good driving history
Correct answer: The amount you must pay out of pocket before insurance covers the rest
A deductible is the amount the policyholder must pay first before the insurance company pays the remaining covered claim amount.
Question 4: What does underinsured motorist (UIM) coverage provide?
- Coverage for drivers who have let their license expire
- Protection when you are hit by a driver whose insurance is insufficient to cover your damages (Correct answer)
- Additional coverage when you drive an unregistered vehicle
- Coverage for damage caused exclusively by hit-and-run drivers
Correct answer: Protection when you are hit by a driver whose insurance is insufficient to cover your damages
Underinsured motorist coverage pays the difference between the at-fault driver's liability limits and your actual damages when their insurance is not enough.
Question 5: What is Personal Injury Protection (PIP) coverage?
- Coverage that pays for damage to your vehicle in a crash
- Insurance that covers medical expenses and lost wages for you regardless of fault (Correct answer)
- A type of liability coverage for injuries you cause to others
- Coverage specifically designed for motorcycle riders
Correct answer: Insurance that covers medical expenses and lost wages for you regardless of fault
PIP pays for medical expenses, lost wages, and other costs for you and your passengers regardless of who caused the accident.
Question 6: In which situations must a driver typically show proof of insurance?
- Only when renewing vehicle registration
- When requested by law enforcement, at registration renewal, and after an accident (Correct answer)
- Only if involved in an accident causing bodily injury
- Only when crossing state lines into another jurisdiction
Correct answer: When requested by law enforcement, at registration renewal, and after an accident
Drivers are required to provide proof of insurance when stopped by law enforcement, when registering or renewing a vehicle, and when involved in an accident.
Question 7: What typically happens to your vehicle registration if your auto insurance policy lapses?
- Nothing — registration and insurance are handled completely separately
- The MVD is notified and your registration may be suspended until insurance is reinstated (Correct answer)
- Your registration is automatically renewed without requiring proof of insurance
- You receive a grace period of 12 months before any action is taken
Correct answer: The MVD is notified and your registration may be suspended until insurance is reinstated
Most states require continuous insurance coverage, and insurers are required to notify the MVD when a policy lapses, which can result in registration suspension.
Motor Vehicle Division Insurance Requirements 2
What does collision coverage pay for?