What is the purpose of auto insurance quizlet?

Automobile coverage that protects you against claims if your car damages someone else’s property and you are at fault. THIS IS INSURANCE PROTECTS A CAR OWNER AGAINST FINANCIAL LOSS WHEN THE CAR COLLIDES WITH ANOTHER CAR, AN OBJECT, OR FROM THE CAR TURNING OR OR ROLLING OVER.

What is the main purpose of vehicle insurance?

The main purpose of auto insurance is to provide liability protection in case you injure or kill someone during a car accident or cause damage to other people’s property. All 50 states legally require you to carry a minimum amount of this liability insurance.

How does car insurance work quizlet?

An auto insurance policy is a legal agreement between you and your insurance company. … You pay a premium to the insurance company regularly, and in return the company is obligated to help pay for covered damage to your car, others’ property or injury to yourself or others as a result of an auto accident.

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What type of automobile insurance is required by law quizlet?

What is liability coverage? Liability coverage insures you against the cost of injury and damage you cause to another in an automobile accident. It’s made up of two policies, bodily injury liability, and property damage liability. Auto liability insurance is required in virtually every state.

What type of contract specifies the terms of insurance?

A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements. A policyholder is the consumer who purchased the policy. The policy will state the premium and deductible amounts. A premium is the fee paid to the insurer to be covered under the specified terms.

What three types of auto insurance coverage are the most important to have?

The most important coverage has to be your state’s minimum liability and property damage coverage. More than anything else, you need to maintain car insurance to keep yourself legal to drive.

Why is insurance so important?

Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. … But suffering a loss without insurance can put you in a difficult financial situation. What are the benefits of insurance? Insurance is an important financial tool.

Which of the following insurance covers vehicles?

Six common car insurance coverage options are: auto liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments coverage and personal injury protection. Depending on where you live, some of these coverages are mandatory and some are optional.

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What can affect your insurance premium?

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.

What type of insurance pays for your car if you are at fault quizlet?

In the event that you are in a car accident and the police decide it is your fault, liability insurance covers the cost of repairing any property damaged in the crash (such as cars or buildings), as well as the medical bills from resulting injuries.

Which of the following does not affect your insurance rates?

Which of the following does NOT affect your insurance rates? Your eye color.

How does age impact your auto insurance premiums quizlet?

How does age impact auto insurance premiums? People under 25 years of age pay higher premiums.

Should you always buy as much auto insurance coverage as you can afford to pay?

The short answer is that you NEED the minimum amount of car insurance required by your state to drive legally, but you SHOULD buy a policy that pays: … and up to $100,000 to repair other drivers’ cars and property that you damage.

What are the 5 parts of an insurance policy?

Every insurance policy has five parts: declarations, insuring agreements, definitions, exclusions and conditions. Many policies contain a sixth part: endorsements. Use these sections as guideposts in reviewing the policies. Examine each part to identify its key provisions and requirements.

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What are the 4 elements of an insurance contract?

There are 4 requirements for any valid contract, including insurance contracts:

  • offer and acceptance,
  • consideration,
  • competent parties, and.
  • legal purpose.

What are the conditions of an insurance policy?

Policy conditions are the provisions in an insurance policy that often require the insured to comply with certain requirements to obtain coverage under the policy. Policy conditions can be overlooked because they are not in the insuring agreement, the exclusions, or the definitions.

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