Exam 21: Auto Insurance Continued

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 other sources of recovery,Bill learned that his state is one of a few states that has a special fund to compensate innocent accident victims.These state funds are called

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.

Some insurance companies intentionally seek to insure motorists with poor driving records.These insurers commonly insure drivers who have been turned-down or canceled by other insurers.What name is given to insurers who provide coverage to these higher-than-average risks drivers?

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

Some insurers are experimenting with the use of an electronic device that can be installed in a vehicle to track driving behavior.The insurers then use the information to help determine the appropriate auto insurance premium to charge.Such devices are called

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)

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.

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)