Auto Insurance Coverage Quiz

What is the primary liability coverage when Alice's teenage son drives a neighbor's car and causes an accident?

• Neighbor's homeowner's policy

• Neighbor's auto policy

• Alice's homeowner's policy

• Alice's auto policy

Answer explanation

The primary liability coverage when Alice's son drives the neighbor's car is the neighbor's auto policy. This policy provides coverage for accidents involving their vehicle, making it the correct choice.

What is a common exclusion for Med Pay coverage?

• Injuries in a covered auto

• Injuries as a pedestrian

• Injuries while using a vehicle as a residence

• Injuries while occupying a vehicle with four wheels

Answer explanation

Med Pay coverage typically excludes injuries while using a vehicle as a residence, as this situation is not considered a standard use of the vehicle. Other options, like injuries in a covered auto, are generally covered.

What is the role of Med Pay in a single-car accident scenario?

• To cover legal defense costs

• To cover lost wages

• To cover medical expenses regardless of fault

• To cover property damage

Answer explanation

Med Pay covers medical expenses incurred from injuries in a single-car accident, regardless of who is at fault. This makes it a valuable option for ensuring medical costs are addressed promptly.

What is a scenario where stacking of UM coverages might be disallowed?

• When you are in a vehicle you own but not insured on the policy

• When you are in a covered auto

• When you are a pedestrian

• When you have multiple cars insured under the same policy

Answer explanation

Stacking of UM coverages is typically disallowed when you have multiple cars insured under the same policy, as the policy limits apply collectively rather than individually for each vehicle.

What is the purpose of Uninsured Motorists Coverage (UM)?

• To cover bodily injury caused by uninsured drivers

• To cover medical expenses regardless of fault

• To cover property damage caused by uninsured drivers

• To cover legal defense costs

Answer explanation

Uninsured Motorists Coverage (UM) is designed to cover bodily injury caused by uninsured drivers, ensuring that victims can receive compensation for injuries when the at-fault driver lacks insurance.

What is a scenario where UIM coverage would be beneficial?

• The at-fault driver is a pedestrian

• The at-fault driver is a family member

• The at-fault driver's insurance is insufficient to cover damages

• The at-fault driver has no insurance

Answer explanation

UIM coverage is beneficial when the at-fault driver's insurance is insufficient to cover damages, ensuring you receive compensation for your losses beyond what their policy can provide.

What does Underinsured Motorist Coverage (UIM) provide?

• Coverage for legal defense costs

• Coverage for property damage by underinsured drivers

• Coverage for bodily injury by underinsured drivers

• Coverage for medical expenses regardless of fault

Answer explanation

Underinsured Motorist Coverage (UIM) specifically provides coverage for bodily injury caused by drivers who do not have sufficient insurance to cover the damages. This is why the correct answer is coverage for bodily injury by underinsured drivers.

What is a common exclusion for Underinsured Motorist Coverage (UIM)?

• Injuries in a vehicle you own but not insured on the policy

• Injuries as a pedestrian

• Injuries by a hit-and-run driver

• Injuries in a covered auto

Answer explanation

A common exclusion for Underinsured Motorist Coverage (UIM) is injuries in a vehicle you own but are not insured on the policy. This means if you're in an uninsured vehicle you own, UIM won't cover your injuries.

What is the purpose of Supplementary coverage in auto insurance?

• To cover lost wages

• To cover legal defense costs and bail

• To cover property damage

• To cover medical expenses

Answer explanation

Supplementary coverage in auto insurance is designed to cover legal defense costs and bail in case of lawsuits resulting from an accident, making it crucial for protecting the insured's financial interests.

What is a potential benefit of having Med Pay coverage?

• It covers property damage

• It replaces health insurance

• It provides immediate funds for medical bills

• It covers legal defense costs

Answer explanation

Med Pay coverage provides immediate funds for medical bills incurred after an accident, ensuring that medical expenses are addressed quickly without waiting for other insurance claims to process.