Auto Insurance Concepts Quiz
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Questions and Answers

What is the purpose of concurrent policies in insurance?

  • To ensure policy terms align and prevent coverage gaps. (correct)
  • To provide coverage for lower premiums.
  • To simplify claims processing.
  • To increase the amount paid out by insurance.
  • What might lead to a denial of coverage by an insurance company?

  • The insurance company is going out of business.
  • The policyholder did not make a claim in the past year.
  • The claimant is seeking too little compensation.
  • The claim exceeds the policy limits. (correct)
  • What are damages intended to achieve in personal injury cases?

  • To punish the defendant.
  • To restore the injured party to their prior position as much as possible. (correct)
  • To make the injuring party financially stable.
  • To cover the defendant's legal fees.
  • What does a deductible refer to in an insurance policy?

    <p>The amount the claimant pays out of pocket before insurance applies.</p> Signup and view all the answers

    What is the implication of denied liability in an insurance context?

    <p>A disagreement exists over who is responsible for damages.</p> Signup and view all the answers

    Which type of damages includes monetary compensation for loss or harm?

    <p>Compensatory Damages.</p> Signup and view all the answers

    What is the role of the defendant in a civil lawsuit?

    <p>To be the party being sued or accused.</p> Signup and view all the answers

    What is the primary function of Preferred Body Shops in relation to insurance companies?

    <p>They are part of an insurer’s Direct Repair Program network.</p> Signup and view all the answers

    What compensation is restricted under California's Prop 213 for uninsured drivers involved in accidents?

    <p>Non-economic damages like pain and suffering.</p> Signup and view all the answers

    What is a Property Damage Release?

    <p>A legal document where a person settles their claim for property damage.</p> Signup and view all the answers

    What does 'Replacement Cost' refer to in the context of property damage?

    <p>The cost to replace damaged property with similar items at current prices.</p> Signup and view all the answers

    In a red light dispute, what typically occurs between the parties involved in an accident?

    <p>Each party claims they had the right of way.</p> Signup and view all the answers

    What is the primary function of an excess insurance policy?

    <p>To increase available coverage after primary policy limits are exhausted</p> Signup and view all the answers

    What needs to be the minimum auto limits for qualifying for an umbrella policy?

    <p>100/300-250/500</p> Signup and view all the answers

    What is the consequence of driving if you are listed as an excluded driver on an insurance policy?

    <p>The policyholder assumes all costs for any resulting damages</p> Signup and view all the answers

    What typically characterizes a low-speed collision?

    <p>It often happens in parking lots or neighborhoods.</p> Signup and view all the answers

    Which scenario might lead to the failure to comply with policy terms?

    <p>Reporting an incident after the required deadline</p> Signup and view all the answers

    What is the primary role of a MAIT report?

    <p>To investigate severe or complex traffic accidents.</p> Signup and view all the answers

    What is the main purpose of gap insurance?

    <p>To bridge the difference between a car loan and its market value</p> Signup and view all the answers

    In the context of vehicle accidents, what is an example of negligence?

    <p>Failing to signal when changing lanes.</p> Signup and view all the answers

    What does the 'Friendly Body Shop' refer to?

    <p>An auto repair shop approved by a law firm for client repairs</p> Signup and view all the answers

    What key aspect does an excess policy exclude?

    <p>Types of coverage expansion</p> Signup and view all the answers

    What happens in a merge collision?

    <p>A vehicle attempts to merge and collides with another vehicle.</p> Signup and view all the answers

    In an exchange of information after a collision, which detail is typically not shared?

    <p>Previous accident history</p> Signup and view all the answers

    What is a common cause of a multi-vehicle pile-up?

    <p>Chain-reaction crashes in bad weather.</p> Signup and view all the answers

    Which of the following statements is true regarding excess insurance policies?

    <p>They serve as an additional financial safety net beyond existing policies.</p> Signup and view all the answers

    What defines misrepresentation in the insurance context?

    <p>Providing false or misleading information.</p> Signup and view all the answers

    What does the legal doctrine of 'entrustment' imply?

    <p>Liability for lending items to negligent individuals.</p> Signup and view all the answers

    What typically triggers the involvement of a MAIT team?

    <p>Severe or complex accidents requiring in-depth analysis.</p> Signup and view all the answers

    Which scenario does NOT generally lead to a loss of use claim?

    <p>A vehicle provided for free by a friend.</p> Signup and view all the answers

    What is a primary goal of accident reconstruction teams?

    <p>To identify causative factors of accidents.</p> Signup and view all the answers

    What principle may hold a car owner liable if they lend their vehicle to someone who causes an accident while intoxicated?

    <p>Negligent entrustment</p> Signup and view all the answers

    Which of the following is NOT an example of non-economic damages?

    <p>Medical expenses</p> Signup and view all the answers

    What does the term 'notice of loss' refer to in the context of insurance?

    <p>The initial report to an insurance company about a loss</p> Signup and view all the answers

    What does 'objective' mean in a legal context?

    <p>Fact-based and uninfluenced by personal feelings</p> Signup and view all the answers

    Which statement about OEM parts is true?

    <p>They are identical to original parts and usually higher in cost.</p> Signup and view all the answers

    Which type of insurance policy is characterized by having no fixed payout limit for personal injury claims?

    <p>No-limit liability policy</p> Signup and view all the answers

    Which aspect of non-economic damages is primarily addressed?

    <p>Emotional and psychological impact of an injury</p> Signup and view all the answers

    What does a property owner or occupier need to demonstrate regarding hazardous conditions?

    <p>They must have known or should have known about the condition.</p> Signup and view all the answers

    Which of the following best defines negligent entrustment?

    <p>The act of lending a vehicle to an unfit driver.</p> Signup and view all the answers

    Which type of damage compensates a plaintiff for physical impairment and emotional suffering?

    <p>Non-economic damages</p> Signup and view all the answers

    Study Notes

    Actual Cash Value (ACV)

    • Value of damaged property at time of loss, accounting for depreciation.

    After Market Parts

    • Replacement parts, not from original manufacturer (OEM).
    • Can be more affordable or customized.
    • Quality may vary depending on manufacturer.

    Appraisal

    • Evaluation of property's value, often for insurance or repair costs.

    Arbitration

    • Alternative to trial, where a neutral third party decides the case.

    Auto Policy

    • Contract between policyholder and insurance company for vehicle protection.
    • Covers accidents, theft, and other incidents.
    • Includes costs for bodily injury, property damage, vehicle repairs, and legal liabilities.
    • Policyholder pays a premium for coverage.

    Backing-up Collision

    • Collision when a vehicle reverses and impacts another vehicle, pedestrian, or object.

    Blind Spot Collision

    • Collision between vehicles where one is in a blind spot during a lane change.

    Burning Policy

    • Liability coverage with decreasing limits as defense costs and claims are paid.
    • Coverage limits decrease with each payment to adjust for legal fees, settlements, or judgments.

    Catastrophic Injury

    • Severe injuries leading to permanent disability, like brain or spinal damage.

    Causation Disputes

    • Disagreements over whether an accident caused claimed injuries.

    Chain-Reaction Collision

    • Multi-vehicle collision caused by an initial impact that leads to subsequent collisions.

    Claim

    • Demand for compensation for injury or loss.

    Claimant

    • Individual filing a claim for property or personal damages.

    Collision Coverage

    • Insurance that covers vehicle repair or replacement from a collision.

    Combined Single Limits (CSL)

    • Insurance policy limit for all claims from a single incident.
    • Applies to bodily injury and property damage liabilities together.

    Commercial Policy

    • Insurance contract for businesses, protecting against financial losses.
    • High policy limits (Often 500k+)

    Comparative Negligence

    • Adjusting damages based on each party's fault.

    Comprehensive Coverage

    • Insurance for non-collision damages, like theft, vandalism, or natural disasters.

    Concurrent Policy

    • Multiple insurance policies covering the same property, person, or risk.
    • Policies designed to seamlessly cover a single loss or incident to avoid coverage gaps.

    Coverage Limitations

    • Cases where a claim exceeds policy limits.
    • Certain damage types (like flood or earthquake) may not be covered.

    Damages (Non-Economic & Economic)

    • Monetary compensation in lawsuits for loss, injury, or harm.
    • Economic damages cover out-of-pocket expenses, lost income,
    • Non-economic damages address the intangible impact of an injury (pain, suffering).

    Deductible

    • Amount the claimant must pay before insurance is activated.

    Defendant (At-Fault Party)

    • Person being sued or accused.

    Denied Coverage (or Denial)

    • Insurance company refusal to pay a claim.

    Denied Liability

    • Refusal by a party or their insurer to accept responsibility for an incident, accident, or injury.

    Depreciation

    • Reduction in value of property due to age, wear, or damage.

    Diminished Value

    • Decrease in a vehicle's value after damage and repair.

    Disputed Liability

    • Disagreements over responsibility or fault in an accident, injury, or damage.
    • Leads to delay in settlements or legal action for resolution.

    Economic Damages

    • Compensation for quantifiable financial losses from an injury.
    • Includes medical expenses, lost wages, and property damage.

    Establishing Liability

    • Process of proving a party is legally responsible for causing harm.

    Estimate or Repair Estimate

    • Projected cost for repairs.

    Excess Policy

    • Insurance supplementing a primary policy when the primary policy's limits are exhausted.

    Exchange of Information

    • Direct sharing of details after a traffic collision.
    • Avoids formal traffic collision reports under certain conditions.

    Excluded Driver

    • Person specifically excluded from vehicle insurance coverage.

    Failure to Comply with Policy Terms -

    • Policyholder failure to comply with policy terms (e.g. reporting requirements).

    Friendly Body Shop

    • Approved repair shop for clients of a legal firm.

    Gap Insurance (Guaranteed Asset Protection Insurance)

    • Covers the difference between a vehicle's loan value and insurance payout in case of total loss.

    Government Claim

    • Request for compensation to a government entity due to negligence/action/policy.

    Government Entity/Immunity

    • Any Federal, State or Local government organization.
    • Protects agencies from lawsuits over actions. Certain circumstances waive immunity.

    Head-On Collision

    • Front-to-front collision between vehicles.

    Hit-and-Run

    • Accident where one party leaves the scene without providing information or help.

    Intersection Collision

    • Collision at an intersection due to improper turns, yielding failures or running red lights.

    Lapsed Policy

    • Inactive policy due to non-payment or expiration.

    Liability (Why a person is at fault)

    • Legal responsibility for one's actions, or lack of action.

    Liability Insurance

    • Protection against claims.

    Loss of Use (LOU)

    • Coverage for non-use of vehicle due to repair/damage.

    Low-Speed Collision

    • Collision at speeds under 10-15 mph, often in parking lots or neighborhoods.

    MAIT Report (Multidisciplinary Accident Investigation Team)

    • In-depth analysis of significant traffic collisions.

    Merge Collision

    • Collision that happens when one vehicle attempts to merge into traffic.

    Misrepresentation or Fraud

    • Providing false or misleading data in application/claims processes.

    Multi-Vehicle Pile-Up

    • Series of collisions involving multiple vehicles.

    Negligence

    • Failure to take appropriate care to avoid causing injury, resulting in damage.

    Negligence Entrustment

    • Holding one party responsible for providing a dangerous item to another, knowing their unsuitability to use it.

    Non-Economic Damages

    • Compensation for intangible losses, like pain, suffering, emotional loss, and loss of quality of life.

    Notice of Loss

    • Initial report of loss to an insurance company.

    Objective

    • Unbiased perspective; focused on facts, not personal emotions.

    OEM (Original Equipment Manufacturer)

    • Original parts manufacturer.

    Open Policy

    • Insurance policy without pre-set payout limits, based solely on damage incurred.

    Overturn Liability

    • The process of re-evaluating liability ruling within a legal case.

    Pain and Suffering

    • Physical and emotional distress caused by injury.

    Parking Lot Accident

    • Accident in a parking lot, often due to low speeds or vehicle maneuvers.

    Party

    • Involved individual, organization, or entity in a legal proceeding.

    Personal Injury

    • Harm to a person's body, mind, or emotions.

    Plaintiff (Our Client)

    • Person filing a lawsuit against another party.

    Policy Coverage Dispute

    • Differences or disagreements regarding policy coverage and claims.

    Policy Exclusions

    • Specific risks or damages excluded from coverage.

    Policy Language

    • Specific wording, terms, conditions, rights, responsibilities, exclusions within an insurance policy.

    Policy Limits (Coverages)

    • Maximum amount an insurer will pay for a covered loss.

    Preferred Body Shop

    • Repair shops selected by insurance companies for claims' direct repairs.

    Prop 213

    • California law limiting compensation for personal injury cases involving uninsured drivers.

    Property Damage

    • Harm to physical property.

    Property Damage Release

    • Legal document releasing claims in exchange for property damage settlements.

    Rear-end Collision

    • Collision where one vehicle strikes the rear of another.

    Red Light Dispute

    • Disagreement over whether a traffic signal was obeyed before a collision.

    Replacement Cost

    • Cost to replace damaged property without depreciation considerations.

    Rollover Accident

    • Accident where a vehicle flips onto its side/roof.

    Salvage Value

    • Value of a vehicle deemed a total loss for parts.

    Settlement (Property Damage)

    • Agreement amount upon payment by insurer for property damage.

    Sideswipe

    • Collision where two parallel vehicles collide on the side.

    Soft Tissue Injury

    • Damage to soft tissues like muscles, ligaments, or tendons.

    Statement of Facts

    • Summary of important events, circumstances, or aspects surrounding a case.

    Statute of Limitations

    • Time limit allowed to file a lawsuit following an injury.

    Structural Damage

    • Damage to a structure's foundation or supporting parts.

    Subjective

    • Based on personal emotions or opinions, not facts.

    Subrogation

    • Insurance company's claim for reimbursement from another party.

    T-bone Collision

    • Collision where the front of one vehicle crashes to the side of another (forming a T).

    Tender of Claim (To another party)

    • Formally requesting responsibility of a claim from another party.

    Tender Policy Limit

    • Presenting the insurance company's maximum payout figure to resolve the demand.

    Third-Party Claim (3P)

    • Claim filed against another party's insurance for your damages.

    Total Loss

    • Total repair costs exceed the vehicle's actual cash value.

    Towing

    • Transportation service of damaged vehicles.

    Traumatic Brain Injury

    • Serious brain injury resulting from an impact.

    U-Turn Collision

    • Collision involving a vehicle making a U-turn and colliding with another.

    Undercarriage Damage

    • Damage to the underside of a vehicle.

    Underinsured Motorist (UIM)

    • Coverage activates when another driver has lower liability limits.

    Uninsured Motorist (UM)

    • Coverage activates when the opposite driver does not have insurance.

    Vehicle Inspection

    • Evaluation process of the vehicle's condition.

    Vicarious Liability

    • Holding one party responsible for another's actions.

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