RTA Accident Reporting & Insurance 5 — Questions and Answers
Question 1: Which scenario would MOST likely be covered under comprehensive auto insurance?
- Rear-ending another vehicle at a red light
- Damage from a falling tree branch during a storm (Correct answer)
- Injuries to passengers in your vehicle
- Damage to another driver's car when you are at fault
Correct answer: Damage from a falling tree branch during a storm
Comprehensive covers non-collision events such as storm damage, theft, vandalism, and falling objects.
Question 2: If an accident occurs in a state where you are visiting, which state's minimum insurance requirements govern your coverage?
- Your home state's requirements always apply
- The state where the accident occurred sets the applicable minimums (Correct answer)
- Federal minimums override both states
- The state where your vehicle is registered controls all coverage
Correct answer: The state where the accident occurred sets the applicable minimums
Insurance policies typically include a 'conformity clause' that adjusts coverage to meet the minimum requirements of whichever state the accident occurs in.
Question 3: How does a driver's recorded statement to an insurance adjuster differ from a police statement?
- It is legally privileged and cannot be used against the driver
- It can be used by the insurer when evaluating or contesting the claim (Correct answer)
- It must be given under oath before a notary
- It replaces the need to file an official accident report with the DMV
Correct answer: It can be used by the insurer when evaluating or contesting the claim
A recorded statement given to an insurance adjuster is not legally privileged and can be used in claim evaluation or litigation.
Question 4: What is the 'duty to cooperate' clause in an auto insurance policy?
- The insurer's obligation to pay claims within 30 days
- The policyholder's obligation to assist the insurer in investigating and defending a claim (Correct answer)
- The requirement to inform police within 24 hours of an accident
- The insurer's duty to provide a rental car during repairs
Correct answer: The policyholder's obligation to assist the insurer in investigating and defending a claim
A duty-to-cooperate clause requires the insured to assist the insurer by providing documents, giving statements, and attending proceedings related to a claim.
Question 5: A vehicle is declared a 'total loss.' What does this mean in insurance terms?
- The vehicle was stolen and never recovered
- The cost to repair the vehicle equals or exceeds a threshold percentage of its actual cash value (Correct answer)
- The driver was found 100% at fault for the accident
- The vehicle has been involved in more than two prior accidents
Correct answer: The cost to repair the vehicle equals or exceeds a threshold percentage of its actual cash value
Insurers declare a total loss when repair costs meet or exceed a state-set percentage (often 75–100%) of the vehicle's actual cash value.
Question 6: Which of the following best describes 'gap insurance'?
- Coverage for medical expenses not paid by health insurance
- Coverage that pays the difference between a vehicle's actual cash value and the remaining loan balance after a total loss (Correct answer)
- A policy that covers gaps in uninsured motorist protection
- An add-on that covers rental cars when your vehicle is being repaired
Correct answer: Coverage that pays the difference between a vehicle's actual cash value and the remaining loan balance after a total loss
Gap insurance covers the 'gap' between what a vehicle is worth at the time of total loss and the amount still owed on a loan or lease.
Question 7: Under most U.S. state laws, how soon after a motor vehicle accident must a driver notify their insurance company?
- Within 24 hours regardless of severity
- Promptly or within a reasonable time, as defined by the policy (Correct answer)
- Only if the accident involved bodily injury
- Within 90 days as set by federal statute
Correct answer: Promptly or within a reasonable time, as defined by the policy
Most policies require 'prompt' notification, and unreasonable delays in reporting can give the insurer grounds to deny coverage.
RTA Accident Reporting & Insurance 5
Which scenario would MOST likely be covered under comprehensive auto insurance?