Car Insurance Flashcards

Which type of car insurance coverage is required by law in almost every U.S. state?

Answer: Liability

Liability insurance is mandated in nearly all states to ensure drivers can compensate others for damages they cause.

What does a '100/300/100' liability policy limit mean?

Answer: $100K per person / $300K per accident / $100K property damage

The split limit notation means $100,000 per injured person, $300,000 total per accident for injuries, and $100,000 for property damage.

What happens to your car insurance rate if you file multiple claims within a short period?

Answer: Rates typically increase at renewal

Multiple claims signal higher risk to insurers, which usually results in higher premiums at the next renewal.

Which discount is most commonly offered by insurers to reward safe driving behavior?

Answer: Telematics or usage-based discount

Telematics programs track your actual driving habits and reward low-risk behavior like smooth braking and limited night driving.

What does 'actual cash value' (ACV) mean when an insurer settles a total loss claim?

Answer: The market value of the vehicle at the time of loss, minus depreciation

ACV is the replacement cost of the vehicle minus depreciation, reflecting what the car was worth just before the loss.

Which scenario would most likely result in an insurer denying a car insurance claim?

Answer: The driver was using the car for ride-share work without a commercial endorsement

Using a personal auto for commercial ride-share activity without proper coverage is a material misrepresentation that can void a claim.

What is the role of an 'insurance adjuster' after you file a car insurance claim?

Answer: To investigate the claim and determine the amount the insurer will pay

An adjuster reviews evidence, assesses damage, and calculates the settlement amount on behalf of the insurer.