C. Uninsured motorist (UM)
Ans Joey, while driving, was involved in a two-car accident. Joey sustained a severe injury
from the accident. The other party, who was at fault, did not maintain an auto insurance
policy for the vehicle. Which one of the following would provide coverage for Joey whe...
Ans A condition that presents the possibility that a person or an organization will sustain a
loss resulting from damage (including destruction, taking, or loss of use) to property in which
that person or organization has a financial interest.
Real property (realty)
Ans Tangible property consisting of land, all structures permanently attached to the land,
and whatever is growing on the land.
Personal property
Ans All tangible or intangible property that is not real property.
Deductible
Ans A portion of a covered loss that is not paid by the insurer.
Liability loss exposure
,Ans Any condition or situation that presents the possibility of a claim alleging legal
responsibility of a person or business for injury or damage suffered by another party.
Damages
Ans Money claimed by, or a monetary award to, a party who has suffered loss or injury for
which another party is legally responsible.
Special damages
Ans A form of compensatory damages that awards a sum of money for specific, identifiable
expenses associated with the injured person's loss, such as medical expenses or lost wages.
General damages
Ans A monetary award to compensate a victim for losses, such as pain and suffering, that do
not involve specific, measurable expenses.
Punitive damages
Ans A payment awarded by a court to punish a defendant for a reckless, malicious, or
deceitful act to deter similar conduct; the award need not bear any relation to a party's
actual damages.
,Civil law
Ans A classification of law that applies to legal matters not governed by criminal law and
that protects rights and provides remedies for breaches of duties owed to others.
Criminal law
Ans The branch of the law that imposes penalties for wrongs against society.
Tort
Ans A wrongful act or an omission, other than a crime or a breach of contract, that invades a
legally protected right.
Negligence
Ans The failure to exercise the degree of care that a reasonable person in a similar situation
would exercise to avoid harming others.
Intentional tort
Ans A tort committed by a person who foresees (or should be able to foresee) that his or
her act will harm another person.
Strict liability
, Ans Liability imposed by a court or by a statute in the absence of fault when harm results
from activities or conditions that are extremely dangerous, unnatural, ultrahazardous,
extraordinary, abnormal, or inappropriate.
Compulsory auto insurance law
Ans Law that requires the owners or operators of automobiles to carry automobile liability
insurance at least equal to certain minimum limits before the vehicle can be licensed or
registered.
Financial responsibility laws
Ans Law enacted to ensure that motorists have the financial ability to pay for any property
damage or bodily injury they might cause as a result of driving or owning an auto.
Personal injury protection (PIP) coverage
Ans Coverage that pays benefits, regardless of fault, for medical expense, income loss, and
other benefits, resulting from bodily injury to occupants of a covered auto.
Residual market
Ans The term referring collectively to insurers and other organizations that make insurance
available through a shared risk mechanism to those who cannot obtain coverage in the
admitted market.
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