Auto Insurance Entrance Ticket

Stephen is slowing down as he approaches a red light. He is looking in his mirror to switch lanes and misjudges how close Keisha’s car is, rear-ending her car. When they get out and assess the damage, Keisha’s bumper will need to be replaced. What type(s) of insurance could Stephen use to cover this accident?

• Liability Coverage

• Collision coverage

• Comprehensive Coverage

• Personal injury protection coverage

• Uninsured/ underinsured motorist coverage

Answer explanation

Since Stephen was not looking and hit Keisha’s car, that makes him at fault for the accident. That means he needs to use Liability Coverage to pay for the damage to Keisha’s bumper.

Keisha had some discomfort in her neck at the time of the accident but thought it was minor and would go away. A week or so after the accident, Keisha finally goes to the doctor, who diagnoses her with whiplash and recommends two months of physical therapy. What type(s) of insurance could Keisha use to cover this accident?

• Liability Coverage

• Collision coverage

• Comprehensive Coverage

• Personal injury protection coverage

• Uninsured/ underinsured motorist coverage

Answer explanation

Technically, it should be Stephen’s Liability Coverage that also pays for injuries suffered by Keisha. However, injuries report weeks after the accident can be tricky in regards to who pays, so to be safe Keisha would want her Personal Injury Protection as a backup.

Melanie gets into an accident on the highway that sends her to the hospital for three weeks with multiple broken bones. Her hospital bill totals over $32,000, but she discovers that the woman who hit her only has $25,000 worth of liability insurance. What type(s) of insurance could Melanie use to cover this accident?

• Liability Coverage

• Collision coverage

• Comprehensive Coverage

• Personal injury protection coverage

• Uninsured/ underinsured motorist coverage

Answer explanation

Melanie has two options to cover her remaining medical bills. First, she could use Uninsured/Underinsured Coverage, which kicks in when the other driver doesn’t have enough Liability Coverage. Or, she could use Personal Injury Protection since her bills are medical bills.

Bernard is driving late at night down a narrow road when a deer runs across the road. Bernard doesn’t have time to avoid the deer and hits it. His windshield gets smashed and his bumper is partially ripped off, but Bernard  is okay. What type(s) of insurance could Bernard use to cover this accident?

• Liability Coverage

• Collision coverage

• Comprehensive Coverage

• Personal injury protection coverage

• Uninsured/ underinsured motorist coverage

Answer explanation

Hitting an animal falls under Comprehensive Coverage because the auto insurance companies generally believe this is a random and often unavoidable occurrence, and should be treated the same as your vehicle getting stolen or damaged by weather. Your rates generally don’t rise after such events.

* not collision coverage because that is usually for collisions that could have been avoided, like hitting a parked car

The higher your deductible, the ______ your monthly premium

• lower

• higher

The higher your limit, the _______ your monthly premium.

• lower

• higher

Norris has a deductible of $1,000. He damages his car in an accident and it will cost $3,300 to repair. 

How much does Norris have to pay?

• $1000

• $2300

• $3300

Norris has a deductible of $1,000. He damages his car in an accident and it will cost $3,300 to repair. 

How much does his insurance pay?

• $1000

• $2300

• $3300

Alicia has a collision deductible of $500 and a bodily injury liability coverage limit of $50,000. She hits another driver and injures them severely. The case goes to trial and there is a verdict to compensate the injured person for $40,000. 

How much does Alicia have to pay?

• $50,000

• $40,000

• $39,500

• $500

Alicia has a collision deductible of $500 and a bodily injury liability coverage limit of $50,000. She hits another driver and injures them severely. The case goes to trial and there is a verdict to compensate the injured person for $40,000. 

How much does insurance have to pay?

• $50,000

• $40,000

• $39,500

• $500