Chapter 4 Pretest

Front

What is the fee that a driver pays to have automobile insurance called?

Back

Premium

Front

What does personal injury protection (PIP) insurance cover?

Back

It covers you and people injured on, in, around, or under the vehicle.

Front

What is a formal request to an insurance company for payment based on the policy terms?

Back

Claim

Front

How do you calculate the monthly savings needed to pay an annual insurance premium of $875?

Back

875 ÷ 12

Front

True or False: A car traveling at 70 miles per hour will drive 300 miles in 5 ½ hours.

Back

False

Front

What is a deductible in terms of insurance?

Back

The amount a policyholder must pay out of pocket before insurance coverage kicks in.

Front

What is the purpose of automobile insurance?

Back

To provide financial protection against physical damage or bodily injury resulting from traffic collisions.

Front

What is the difference between liability insurance and comprehensive insurance?

Back

Liability insurance covers damages to others, while comprehensive insurance covers damages to your own vehicle from non-collision events.

Front

What does the term 'no fault' insurance mean?

Back

It means that each party's insurance pays for their own damages regardless of who caused the accident.

Front

What is the significance of an insurance premium?

Back

It is the amount paid for an insurance policy, typically on a monthly or annual basis.