Exam 23: Auto Insurance and Society

Under financial responsibility laws,proof of financial responsibility is generally required under all of the following circumstances EXCEPT

Some states have enacted laws which prohibit uninsured drivers from suing a negligent driver for noneconomic damages,such as pain and suffering.These laws are called

A state law that requires individuals who have been involved in an auto accident or who have been convicted for certain vehicle-related offenses to demonstrate the ability to pay liability claims up to a specified dollar amount is called a(n)

Under which type of automobile insurance arrangement are all automobile insurers in a state assigned their proportionate share of high-risk drivers based on the total volume of automobile business written in the state?

Alan has been involved in three accidents and has been ticketed for a number of driving violations.He tried to purchase auto insurance,but three insurers refused to sell him coverage.The generic name for state plans designed to insure drivers like Alan is the

Which of the following statements about reinsurance facilities for insuring high-risk drivers is (are)true? I.Underwriting losses in the reinsurance facility are shared by all auto insurers in the state. II.An insurer must accept all applicants for insurance,but the insurer has the option of placing high-risk drivers in the reinsurance pool.

All of the following are major rating factors for determining private passenger automobile insurance premiums EXCEPT

Defects of financial responsibility laws include which of the following? I.Accident victims may not be fully compensated for their injuries. II.They apply only to property damage losses,not to bodily injury claims.

In the state where Susan lives,drivers whom private insurance companies do not want to insure are placed in a common pool,and each insurer pays its pro rata share of pool losses and expenses.A common policy is used for all high-risk drivers.Susan's state handles high-risk drivers through a(n)

Amber believes that her auto insurance premium is too high.All of the following will reduce Amber's auto insurance premium EXCEPT

A credit-based score that insurers claim is highly predictive of future claims costs is an individual's

Scott had trouble obtaining auto insurance.After three companies refused to insure him,he called the state insurance department.A representative suggested he obtain coverage through Last Chance Insurance Company because "that's all they insure-high-risk drivers." Scott contacted Last Chance.He was not refused coverage;however,the premium Scott was required to pay was three times greater than the average premium in the market.Last Chance Insurance Company is a(n)

Disadvantages of automobile insurance plans include which of the following? I.High premiums may cause many high-risk drivers to go uninsured. II.Large underwriting profits have resulted in high-risk drivers subsidizing the cost of insurance for good drivers in the voluntary markets.

Bill was severely injured by an uninsured driver.Bill did not purchase uninsured motorists coverage,and the other driver,although held liable,could not pay the damages awarded.After exhausting all sources of recovery,Bill obtained some relief from a state fund designed to compensate individuals like Bill.These state funds are called

In Maryland,drivers who are unable to obtain auto insurance in the voluntary market are insured through a(n)

A number of benefits are payable under no-fault plans.Under one provision,benefits are paid for tasks normally performed by the insured,including such things as lawn care,housework,and home repairs.These tasks are called

Which of the following statements about modified no-fault laws is (are)true? I.Claims less than a certain dollar threshold must be assumed by the injured accident victim,but the injured person has the right to sue a negligent driver. II.Claims above a certain dollar threshold are paid in full by an injured accident victim's insurer,and the right to sue a negligent driver is eliminated.

Criticisms of compulsory insurance laws include which of the following? I.They provide less than complete protection since they require only a minimum amount of liability insurance. II.Even with compulsory insurance laws,a substantial number of motorists continue to operate vehicles without insurance.

Sharon lives in a state that has a no-fault automobile insurance law.Under the law,an injured person has the right to sue the negligent driver only if the bodily injury claim exceeds a dollar or verbal threshold.The no-fault law in Sharon's state is a(n)

New Jersey's dollar-a-day auto insurance coverage is limited to