Question 1

Amber believes that her auto insurance premium is too high.Which of the following would most likely lower Amber's premium?

Accepted Answer

A) Amber could increase her physical damage deductible. 
B) Amber could move from the rural area where she lives to an urban or suburban area. 
C) Amber could increase the amount of liability insurance that she carries. 
D) Amber could add "other-than-collision loss" coverage to her policy. 
A) Amber could increase her physical damage deductible. 
B) Amber could move from the rural area where she lives to an urban or suburban area. 
C) Amber could increase the amount of liability insurance that she carries. 
D) Amber could add "other-than-collision loss" coverage to her policy.

Question 2

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.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 3

Under financial responsibility laws,proof of financial responsibility is generally required under which of the following circumstances?

Accepted Answer

A) The use of an auto by any driver with fewer than 3 years of driving experience 
B) When an individual renews his or her driver's license 
C) Failure to pay a final judgment resulting from an auto accident 
D) The accumulation of unpaid parking tickets exceeding a specified value 
A) The use of an auto by any driver with fewer than 3 years of driving experience 
B) When an individual renews his or her driver's license 
C) Failure to pay a final judgment resulting from an auto accident 
D) The accumulation of unpaid parking tickets exceeding a specified value

Question 4

All of the following are arguments for no-fault automobile insurance laws EXCEPT

Accepted Answer

A) No-fault is unnecessary as it's easy to determine which driver was negligent when a multiple-vehicle accident occurs. 
B) A large portion of each premium dollar is used for purposes other than compensating accident victims for their losses. 
C) There are delays in compensating accident victims under the tort system. 
D) Seriously injured accident victims tend to be overcompensated,while those with small economic losses are inadequately indemnified. 
A) No-fault is unnecessary as it's easy to determine which driver was negligent when a multiple-vehicle accident occurs. 
B) A large portion of each premium dollar is used for purposes other than compensating accident victims for their losses. 
C) There are delays in compensating accident victims under the tort system. 
D) Seriously injured accident victims tend to be overcompensated,while those with small economic losses are inadequately indemnified.

Question 5

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

Accepted Answer

A) gender. 
B) age. 
C) race. 
D) marital status. 
A) gender. 
B) age. 
C) race. 
D) marital status.

Question 6

Which of the following statements about the factors affecting automobile insurance rates is true?

Accepted Answer

A) The cost of collision coverage increases as a car gets older. 
B) Because of high speeds in rural areas,rural drivers tend to pay more for auto insurance than city drivers pay for auto insurance. 
C) Young unmarried male drivers tend to have fewer accidents than young married male drivers in the same age category. 
D) People who drive a car to and from work tend to be charged higher rates than those who use a car for pleasure purposes. 
A) The cost of collision coverage increases as a car gets older. 
B) Because of high speeds in rural areas,rural drivers tend to pay more for auto insurance than city drivers pay for auto insurance. 
C) Young unmarried male drivers tend to have fewer accidents than young married male drivers in the same age category. 
D) People who drive a car to and from work tend to be charged higher rates than those who use a car for pleasure purposes.

Question 7

Some states do not require an individual to demonstrate the ability to pay an automobile liability claim until after the individual has been involved in an accident or has been convicted for certain offenses,such as driving under the influence of alcohol.This approach to dealing with compensating innocent auto accident victims is called a(n)

Accepted Answer

A) unsatisfied judgement fund. 
B) financial responsibility law. 
C) uninsured motorist law. 
D) compulsory insurance law. 
A) unsatisfied judgement fund. 
B) financial responsibility law. 
C) uninsured motorist law. 
D) compulsory insurance law.

Question 8

Which of the following statements about joint underwriting associations for insuring high-risk drivers is (are)true?
I.Underwriting losses are proportionately shared by all auto insurers based on premiums written in the state.
II.Each company participating in a joint underwriting association sets it own rates.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 9

Which of the following statements is (are)true with respect to drug-impaired driving?
I.It is a growing problem in the United States.
II.It is impossible to test whether someone is driving under the influence of opioids or marijuana.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 10

Arguments often used against no-fault automobile insurance laws include all of the following EXCEPT

Accepted Answer

A) It is often difficult to determine which driver was negligent when a multiple-vehicle accident occurs. 
B) Many injured persons will not be compensated for their full losses because payments for pain and suffering will be eliminated. 
C) The defects of the negligence system are exaggerated,and the system needs only to be reformed. 
D) Claims of efficiency and premium saving are exaggerated,and automobile insurance premiums might actually increase. 
A) It is often difficult to determine which driver was negligent when a multiple-vehicle accident occurs. 
B) Many injured persons will not be compensated for their full losses because payments for pain and suffering will be eliminated. 
C) The defects of the negligence system are exaggerated,and the system needs only to be reformed. 
D) Claims of efficiency and premium saving are exaggerated,and automobile insurance premiums might actually increase.

Question 11

A no-fault law under which benefits are paid to an accident victim without regard to fault and the accident victim can still sue the negligent driver who caused the accident is referred to as a(n)

Accepted Answer

A) pure no-fault law. 
B) add-on no-fault law. 
C) modified no-fault law. 
D) choice no-fault law. 
A) pure no-fault law. 
B) add-on no-fault law. 
C) modified no-fault law. 
D) choice no-fault law.

Question 12

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.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 13

Ben lives in a state that has a no-fault auto insurance law.Another motorist failed to yield the right of way,and hit his car.Ben filed a claim with his own insurer.He also contacted a lawyer to discuss suing the other driver.The lawyer told Ben that while lawsuits resulting from auto accidents are permitted in the state,Ben's injuries were not severe enough to provide legal standing for a lawsuit.What type of no-fault law is in effect in the state where Ben lives?

Accepted Answer

A) pure no-fault 
B) add-on no-fault 
C) choice no-fault 
D) modified no-fault 
A) pure no-fault 
B) add-on no-fault 
C) choice no-fault 
D) modified no-fault

Question 14

Which of the following statements about shopping for auto insurance is true?

Accepted Answer

A) Adequate physical damage insurance on your auto is the most important consideration. 
B) Consideration should be given to dropping liability coverage if you drive an older car with a low market value. 
C) To obtain the lowest premium,an applicant should review his or her eligibility for all discounts offered. 
D) Price comparisons are of little value since auto insurers tend to charge the same premiums. 
A) Adequate physical damage insurance on your auto is the most important consideration. 
B) Consideration should be given to dropping liability coverage if you drive an older car with a low market value. 
C) To obtain the lowest premium,an applicant should review his or her eligibility for all discounts offered. 
D) Price comparisons are of little value since auto insurers tend to charge the same premiums.

Question 15

Which of the following statements is true regarding unsatisfied judgment funds?

Accepted Answer

A) An accident victim can choose to collect from the negligent driver or from the fund. 
B) The negligent driver is relieved of legal responsibility when the fund makes a payment to the accident victim. 
C) The maximum amount an individual can collect from the fund is usually much more than the minimum liability limits required by the state. 
D) An accident victim must have exhausted other means of recovery before collecting from the fund. 
A) An accident victim can choose to collect from the negligent driver or from the fund. 
B) The negligent driver is relieved of legal responsibility when the fund makes a payment to the accident victim. 
C) The maximum amount an individual can collect from the fund is usually much more than the minimum liability limits required by the state. 
D) An accident victim must have exhausted other means of recovery before collecting from the fund.

Question 16

Which of the following statements about automobile insurers that specialize in insuring high-risk motorists with poor driving records is (are)true?
I.The actual premium paid by an applicant is set by the federal government and is independent of an applicant's driving record.
II.The coverages available may be more limited than those written by insurers in the standard market.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 17

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.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 18

Which of the following statements about unsatisfied judgment funds is (are)true?
I.An accident victim must obtain a judgment against the motorist who caused an accident and must show the judgment cannot be collected.
II.The major disadvantage is that the negligent uninsured motorist is relieved of legal liability.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 19

A number of technological innovations will impact auto insurance going forward.One innovation is self-driving cars and trucks.Self-driving cars and trucks are also called

Accepted Answer

A) suburban vehicle. 
B) autonomous vehicles. 
C) replacement vehicles. 
D) all-terrain vehicles. 
A) suburban vehicle. 
B) autonomous vehicles. 
C) replacement vehicles. 
D) all-terrain vehicles.

Question 20

Janet was unable to obtain auto insurance in the voluntary insurance market.She was contacted by the state insurance department and notified that XYZ Insurance would be her insurer.The mechanism used in Janet's state to provide auto insurance to high-risk drivers is a(n)

Accepted Answer

A) automobile insurance plan. 
B) joint underwriting association. 
C) specialty automobile insurer. 
D) reinsurance facility. 
A) automobile insurance plan. 
B) joint underwriting association. 
C) specialty automobile insurer. 
D) reinsurance facility.

Amber believes that her auto insurance premium is too high.Which of the following would most likely lower Amber's premium?

Under financial responsibility laws,proof of financial responsibility is generally required under which of the following circumstances?

All of the following are arguments for no-fault automobile insurance laws EXCEPT

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

Which of the following statements about the factors affecting automobile insurance rates is true?

Which of the following statements is (are)true with respect to drug-impaired driving? I.It is a growing problem in the United States. II.It is impossible to test whether someone is driving under the influence of opioids or marijuana.

Arguments often used against no-fault automobile insurance laws include all of the following EXCEPT

A no-fault law under which benefits are paid to an accident victim without regard to fault and the accident victim can still sue the negligent driver who caused the accident is referred to as a(n)

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.

Which of the following statements about shopping for auto insurance is true?

Which of the following statements is true regarding unsatisfied judgment funds?

A number of technological innovations will impact auto insurance going forward.One innovation is self-driving cars and trucks.Self-driving cars and trucks are also called

Janet was unable to obtain auto insurance in the voluntary insurance market.She was contacted by the state insurance department and notified that XYZ Insurance would be her insurer.The mechanism used in Janet's state to provide auto insurance to high-risk drivers is a(n)

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters

Exam 21: Auto Insurance Continued

Amber believes that her auto insurance premium is too high.Which of the following would most likely lower Amber's premium?

Under financial responsibility laws,proof of financial responsibility is generally required under which of the following circumstances?

All of the following are arguments for no-fault automobile insurance laws EXCEPT

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

Which of the following statements about the factors affecting automobile insurance rates is true?

Which of the following statements is (are)true with respect to drug-impaired driving? I.It is a growing problem in the United States. II.It is impossible to test whether someone is driving under the influence of opioids or marijuana.

Arguments often used against no-fault automobile insurance laws include all of the following EXCEPT

A no-fault law under which benefits are paid to an accident victim without regard to fault and the accident victim can still sue the negligent driver who caused the accident is referred to as a(n)

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.

Which of the following statements about shopping for auto insurance is true?

Which of the following statements is true regarding unsatisfied judgment funds?

A number of technological innovations will impact auto insurance going forward.One innovation is self-driving cars and trucks.Self-driving cars and trucks are also called

Janet was unable to obtain auto insurance in the voluntary insurance market.She was contacted by the state insurance department and notified that XYZ Insurance would be her insurer.The mechanism used in Janet's state to provide auto insurance to high-risk drivers is a(n)

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters