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Common Auto Insurance Coverages Exam Questions and Answers 100% Pass
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Common Auto Insurance Coverages Exam Questions and Answers 100% Pass Liability - If the insured causes an accident, this two-part coverage — including bodily injury liability and property damage liability — will pay for the other party's medical bills and vehicle repairs. It will not protec...

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  • December 22, 2024
  • 8
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • common auto insurance coverages exam questions and

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  • AUTO INSURANCE
  • AUTO INSURANCE

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KatelynWhitman

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Common Auto Insurance Coverages Exam
Questions and Answers 100% Pass


Liability - ✔✔If the insured causes an accident, this two-part coverage — including bodily injury liability

and property damage liability — will pay for the other party's medical bills and vehicle repairs. It will not

protect the insured or their passengers if injured or if the vehicle is damaged as a result of the wreck.


Collision - ✔✔This type of coverage will pay to fix or replace the insured's vehicle after an accident.

Coverage extends to damage caused by collision with an object (e.g., a tree or house) or an accident in

which no object was involved (e.g., if the car flips). Most states don't mandate collision coverage, but if

the insured has a loan or a lease, their finance company will probably require it. Collision insurance

cannot be purchased without comprehensive coverage.


Comprehensive - ✔✔This protects the insured's vehicle against certain types of damage not caused by an

accident, such as theft, a falling object or a natural disaster. Comprehensive insurance is optional unless

the lender or lessor requires it. This type of insurance is usually purchased in combination with collision

coverage.


Personal Injury Protection (PIP) - ✔✔Often referred to as "no-fault insurance," personal injury protection

covers medical expenses incurred in an accident regardless of fault. Coverage extends to other drivers

listed on the policy, members of the insured's household and passengers. Qualifying expenses can

include medical bills as well as those not typically covered by health insurance such as lost income, child

care or even a funeral. Only 15 states require PIP. It is optional in many other states but isn't available

everywhere.


Auto Medical Payments (MedPay) - ✔✔This coverage type is similar to PIP but is more limited in scope.

It covers accident-related medical expenses for the insured, their passengers, their household members


Created by Katelyn Whitman © 2025, All Rights Reserved.

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and other policyholders. As optional coverage, it supplements health insurance for those who have it and

serves as a useful substitute for those who don't. It can also cover copays and deductibles of other

insurance, including health insurance and PIP policies.


Uninsured/Underinsured Motorist Coverage - ✔✔Some drivers will break the law and drive without

auto insurance. Others won't have adequate coverage. In the event the insured is injured or their car is

damaged in an accident caused by this sort of driver, this coverage can pay for medical bills and car

repairs. It is required in about half the states.


Guaranteed Auto Protection (Gap) - ✔✔A vehicle depreciates over time, including the moment it's driven

off the lot. In a catastrophic loss, the insurer will only pay for the car's actual cash value, which could be

less than what is owed on a loan or lease. Gap insurance will pay for the dollar-amount "gap" between

the balance of financing and what the car is worth.


Personal Umbrella Policy (PUP) - ✔✔PUP insurance isn't car insurance in the strictest sense. It's an extra

level of broad-based liability protection beyond homeowner and auto policies, and it protects assets of $1

million or more in case of a lawsuit.


Rental Reimbursement - ✔✔While a car is being repaired under a claim, rental reimbursement will keep

the insured on the road by covering the cost of a rental car. There are limits on how much the insurer will

pay per day and per claim, but it's usually enough to cover a rental for the full amount of time the car is

in the shop.


Emergency Roadside Assistance - ✔✔This coverage option will provide assistance if the insured locks

themselves out of their car, needs a tow or jump start, gets a flat tire or runs out of gas. If the car is

inoperable, the insured can get a tow to a nearby garage of their choice, up to a specified distance.


Mechanical Breakdown Insurance - ✔✔Mechanical breakdown insurance can cover the costs of repairs to

mechanical parts and systems. This coverage is similar to extended warranties and service contracts, but

unlike those products, the insured pays a monthly premium instead of paying a lump sum up front.


Created by Katelyn Whitman © 2025, All Rights Reserved.

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