Insurance Basics
This is the agreement between you and the insurance company that outlines your coverages and costs.
What is a policy?
This coverage pays for damage to your car from a non-collision event, such as a storm, theft, or hitting a deer.
What is comprehensive coverage?
True or False: You will pay more in total interest if you make a larger down payment.
What is False?
A factory warranty and fewer maintenance expenses are two advantages of buying this type of car.
What is a new car?
Besides the loan payment, name one other routine cost of owning a vehicle.
What is gas, insurance, maintenance, inspection, or registration/excise tax?
These are the regular payments you make to an insurance company to keep your policy active.
What are premiums?
This coverage pays for damage to your car when you are in an accident, regardless of who is at fault.
What is collision coverage?
Lenders will almost always require you to carry this type of coverage if you are still making payments on your auto loan.
What is collision coverage?
A lower purchase price is a primary advantage of buying this type of car.
What is a used car?
Besides the loan payment and the answer from the $100 question, name another routine cost of owning a vehicle.
What is gas, insurance, maintenance, inspection, or registration/excise tax?
This is the amount you must pay out-of-pocket for a claim before the insurance company will pay their share.
What is a deductible?
In Maine's 50/100/25 liability limits, the "50" stands for this.
What is $50,000 for bodily injury to one person?
This is the main financial advantage of choosing a 4-year loan instead of a 5-year loan, even though monthly payments are higher.
What is paying less total interest?
Lower costs for insurance and excise tax are advantages of buying this type of car.
What is a used car?
This is the standard, flat fee for a license plate when registering a car in Maine.
What is $35?
A windshield replacement costs $490, and your deductible for this type of claim is $100. This is the amount the insurance company will pay.
What is $390?
In Maine's 50/100/25 liability limits, the "25" stands for this.
What is $25,000 for property damage?
True or False: When you lease a vehicle for three years, you get to own it at the end for far less than it would have cost to finance it.
What is False?
This is the term for the value of the car at the end of the loan term, which is often higher for a new car than a used one.
What is resale value?
This is a tax paid to the town or city when registering a vehicle in Maine, often based on the car's original MSRP.
What is excise tax?
Name two ways you can lower your auto insurance premiums right away.
What is raising your deductible or reducing your coverage (e.g., dropping collision)?
This type of coverage protects you if you are in an accident caused by a driver who has no insurance or not enough insurance.
What is Un/Underinsured Motorist Coverage (UMC)?
This is the primary reason a 45-year-old driver with more assets would want higher liability limits than a typical 22-year-old driver.
What is having more assets to protect (e.g., from a lawsuit)?
It would be wise to drop collision coverage on a car when its value is this.
What is not worth much (or, when the cost of coverage exceeds the car's value)?
A truck kicks up a stone and breaks Mr. McConnell's windshield. This is the part of his insurance that will help pay for the repair.
What is comprehensive coverage?