Car Insurance Explained Exam PDF

**Multiple Choice Exam: Car Insurance Explained** 1. **What is the role of car insurance in car accident cases?** - **A. To increase premiums for clients** - **B. To cover specific costs like repairs and medical bills** - **C. To prevent accidents from happening** - **D...

**Multiple Choice Exam: Car Insurance Explained** 1. **What is the role of car insurance in car accident cases?** - **A. To increase premiums for clients** - **B. To cover specific costs like repairs and medical bills** - **C. To prevent accidents from happening** - **D. To determine traffic laws** **Correct Answer: B. To cover specific costs like repairs and medical bills\ Explanation: Car insurance helps cover costs like car repairs, medical bills, and other damages that result from an accident.** 2. **What is the minimum liability insurance required for injury or death to one person in California?** - **A. \$5,000** - **B. \$15,000** - **C. \$30,000** - **D. \$50,000** **Correct Answer: B. \$15,000\ Explanation: The minimum liability insurance required in California for injury or death to one person is \$15,000.** 3. **What type of coverage pays for the repair or replacement of a client's car, regardless of who caused the accident?** - **A. Liability Insurance** - **B. Comprehensive Insurance** - **C. Collision Insurance** - **D. Uninsured Motorist Coverage** **Correct Answer: C. Collision Insurance\ Explanation: Collision insurance pays for the repair or replacement of the client\'s car if it is damaged in an accident, no matter who is at fault.** 4. **Which type of insurance covers damage to a client's car that was not caused by an accident?** - **A. Collision Insurance** - **B. Comprehensive Insurance** - **C. Liability Insurance** - **D. MedPay Coverage** **Correct Answer: B. Comprehensive Insurance\ Explanation: Comprehensive insurance covers damage that was not caused by an accident, such as theft, fire, or vandalism.** 5. **What does Medical Payments (MedPay) coverage provide?** - **A. Car repair costs** - **B. Medical bills for the client and passengers after an accident** - **C. Legal defense costs** - **D. Damage caused by vandalism** **Correct Answer: B. Medical bills for the client and passengers after an accident\ Explanation: MedPay coverage pays for medical bills for the client and their passengers, regardless of who caused the accident.** 6. **What is the purpose of Uninsured/Underinsured Motorist Coverage (UM/UIM)?** - **A. To cover damage to the client's car after an accident** - **B. To provide coverage if the other driver lacks insurance or has insufficient insurance** - **C. To cover theft and fire damage** - **D. To provide legal representation** **Correct Answer: B. To provide coverage if the other driver lacks insurance or has insufficient insurance\ Explanation: UM/UIM coverage ensures that the client is still covered even if the other driver cannot pay enough for damages and injuries.** 7. **What does Personal Injury Protection (PIP) cover?** - **A. Legal costs** - **B. Medical expenses, lost wages, and other costs for the client** - **C. Car repair after a collision** - **D. Property damage to the other driver's vehicle** **Correct Answer: B. Medical expenses, lost wages, and other costs for the client\ Explanation: PIP covers medical expenses, lost wages, and other costs for the client, regardless of who caused the accident.** 8. **Which type of insurance pays for the damages and injuries the defendant causes to others in an accident?** - **A. Collision Insurance** - **B. Comprehensive Insurance** - **C. Liability Insurance** - **D. PIP** **Correct Answer: C. Liability Insurance\ Explanation: Liability insurance pays for damages and injuries the defendant causes to others if they are found at fault in an accident.** 9. **What are policy limits?** - **A. The minimum coverage required by law** - **B. The amount a driver must pay before coverage begins** - **C. The maximum amount the insurance company will pay for a claim** - **D. The monthly payment to maintain insurance coverage** **Correct Answer: C. The maximum amount the insurance company will pay for a claim\ Explanation: Policy limits are the maximum amount that an insurance company will pay for a claim.** 10. **What are exclusions in an insurance policy?** - **A. The types of coverage provided** - **B. Specific situations or items that the policy will not cover** - **C. The maximum amount the insurer will pay** - **D. The amount paid by the client monthly** **Correct Answer: B. Specific situations or items that the policy will not cover\ Explanation: Exclusions are specific situations or items that the insurance policy will not cover, such as intentional damage.** 11. **Which of the following is an example of an exclusion?** - **A. Liability coverage** - **B. Comprehensive coverage** - **C. Intentional damage caused by the driver** - **D. Collision coverage** **Correct Answer: C. Intentional damage caused by the driver\ Explanation: Intentional damage caused by the driver is often excluded from coverage.** 12. **What does the term \"premium\" refer to in car insurance?** - **A. The amount a client pays out of pocket for a claim** - **B. The maximum amount paid by the insurer** - **C. The amount a driver pays regularly to maintain insurance** - **D. The person who investigates a claim** **Correct Answer: C. The amount a driver pays regularly to maintain insurance\ Explanation: A premium is the regular payment made to maintain insurance coverage.** 13. **What does the term \"deductible\" mean?** - **A. The monthly payment for insurance** - **B. The maximum limit of insurance coverage** - **C. The amount paid by the client before the insurance covers the rest** - **D. The compensation paid to the defendant** **Correct Answer: C. The amount paid by the client before the insurance covers the rest\ Explanation: A deductible is the out-of-pocket amount the client must pay before the insurance company pays for a claim.** 14. **What is a \"claim\" in the context of car insurance?** - **A. A request made to the insurance company to pay for damages or injuries** - **B. The policy limit for coverage** - **C. The premium paid by the client** - **D. The maximum amount the insurer will pay** **Correct Answer: A. A request made to the insurance company to pay for damages or injuries\ Explanation: A claim is a request made to the insurance company for payment due to damages or injuries.** 15. **Who is an \"adjuster\"?** - **A. The person who pays the premiums** - **B. The driver responsible for the accident** - **C. The insurance company representative who investigates the accident** - **D. The mechanic who repairs the car** **Correct Answer: C. The insurance company representative who investigates the accident\ Explanation: An adjuster is the person from the insurance company who investigates the accident and determines how much they will pay.** 16. **Which type of coverage is required by law in California?** - **A. Collision Insurance** - **B. Liability Insurance** - **C. Comprehensive Insurance** - **D. MedPay Coverage** **Correct Answer: B. Liability Insurance\ Explanation: Liability insurance is the minimum required by law in California to cover injuries and property damage if the driver is at fault.** 17. **If a client's damages exceed the defendant's policy limits, what can be done?** - **A. Request an increase in the policy limit** - **B. Accept that no more money can be recovered** - **C. Look for other ways to get additional money** - **D. File a new claim** **Correct Answer: C. Look for other ways to get additional money\ Explanation: If the damages exceed the policy limits, additional funds must be sought from other sources.** 18. **What does Collision Insurance NOT cover?** - **A. Repairs after an accident caused by the client** - **B. Replacement of the car after an accident** - **C. Medical bills for the client** - **D. Damage regardless of fault** **Correct Answer: C. Medical bills for the client\ Explanation: Collision insurance covers car repairs or replacement but does not cover medical bills.** 19. **Which coverage helps if the other driver has no insurance at all?** - **A. Liability Insurance** - **B. Collision Insurance** - **C. Uninsured Motorist Coverage** - **D. MedPay Coverage** **Correct Answer: C. Uninsured Motorist Coverage\ Explanation: Uninsured Motorist Coverage helps cover damages if the other driver does not have insurance.** 20. **Why is it important to understand exclusions in a car insurance policy?** - **A. To lower the client's deductible** - **B. To accurately set expectations about what is covered** - **C. To avoid paying premiums** - **D. To increase the policy limits** **Correct Answer: B. To accurately set expectations about what is covered\ Explanation: Understanding exclusions helps set realistic expectations for clients about what the insurance policy will and will not cover.**