Basic Terms
What is the primary purpose of Auto Insurance?
To provide financial protection in the event of an accident or loss involving your vehicle.
What is personal injury protection (PIP)?
This coverage pays for medical expenses after an accident, regardless of who caused it.
What is the coverage limit?
This is the amount your insurer will pay for a claim, up to the limits of your policy.
What is Allstate?
This insurer is known for its "Good Hands" slogan and provides auto, home, and life insurance.
Many drivers believe this: If you’re in an accident, your car insurance will always cover rental car costs.
false (Rental coverage may be an additional option in your policy, not automatically included.)
What is a Policy Holder?
This term refers to the party that is protected by the insurance contract.
What is Comprehensive Coverage?
If your vehicle is damaged by something other than a collision, such as a tree falling or vandalism, this coverage helps pay for repairs.
What is risk retention?
This term refers to the practice of paying a higher premium in exchange for a lower deductible.
What is Progressive?
This company is famous for its "Flo" character and offers auto and home insurance.
This is a common myth: If your car is totaled in an accident, you will receive enough money to buy a new car.
false (Insurance will only pay the car's market value at the time of the accident, not the cost of a new car.)
What is determining a premium?
This is the process of calculating the amount an insured driver has to pay for damage after an accident, and it typically based on factors like car age and driving history.
What is liability coverage?
This insurance pays for damage to another person’s vehicle or property if you are at fault in an accident.
What is a policy exclusion?
This is the phrase used for when your insurance policy has an exclusion for certain types of damage, such as damage caused by driving under the influence
What is State Farm?
This insurance giant uses the "Like a Good Neighbor" slogan and offers auto, health, and life insurance products.
This myth suggests that you don’t need auto insurance if your car is very old and worth very little.
false (Liability insurance is still required in most states, even if your car has low value.)
What is Co-insurance?
This term refers to the percentage of a claim that the insured must pay, after the deductible, before the insurer covers the remaining costs.
What is uninsured/underinsured motorist coverage?
This is a form of auto insurance that covers injuries to other drivers and passengers if you cause an accident, even if the damages exceed your liability limits.
What is a property damage claim?
This is the official name for an accident where no one is injured, but the car’s body is damaged in some way.
What is Nationwide?
This company offers auto insurance and is recognized by its "Nationwide is on your side" slogan.
A widespread myth about auto insurance is that it will automatically cover everything, including wear and tear.
false (Auto insurance typically does not cover maintenance or mechanical failure; it covers accidents and damage from covered events.)
What is a deductible?
The amount of money you pay out of pocket for a covered claim before your insurance kicks in.
What is collision coverage?
This coverage protects your car from damage caused by an accident, but only if you hit another vehicle or object while driving.
What is an uninsured motorist?
This term describes a person who is legally responsible for another driver’s accident but does not have insurance coverage.
What is Geico?
This insurance company is known for its Geico gecko mascot and focuses primarily on auto insurance.
This myth says that the more coverage you have, the better protection you get, regardless of the cost
false (Excessive coverage might be unnecessary for some drivers and result in higher premiums without providing added value.)