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9. Auto Accidents: Causes & Prevention

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26. Insurance

The purpose of insurance is to ensure that you will be able to pay for injuries and damages if you are involved in an accident. California has a compulsory financial responsibility law which requires that every driver and every owner of a motor vehicle maintain financial responsibility at all times.

There are four forms of financial responsibility:

  • coverage by a motor vehicle or automobile liability insurance policy
  • a deposit of $35,000 with DMV
  • a surety bond for $35,000 obtained from a company licensed to do business in California
  • a DMV-issued self-insurance certificate

  • You must carry written evidence of insurance or other financial responsibility for your vehicle whenever you drive. There are minimum amounts of insurance that you must have. You must present your evidence of financial responsibility to the other people involved in the accident and at the request of law enforcement.

    There are at least four different types of insurance:

  • collision
  • comprehensive
  • liability
  • uninsured motorist

  • You should understand the differences between them for when it is time for you to purchase insurance for your own vehicle.

    Collision insurance deals with damage to your vehicle in the event of a collision. This type of insurance is normally subject to a deductible, meaning that you have to pay a certain amount for damage to your vehicle before your insurance company will pay. Collision insurance policies are limited by various terms indicated in the policy.

    Comprehensive insurance deals with theft of your vehicle or damage to your vehicle caused by factors other than a collision such as a rock hitting your windshield. Comprehensive policies are also normally subject to a deductible and are limited by various terms in the policy.

    Liability insurance addresses your responsibility to others for injury, death, and property damage. This is the type of insurance that you are required to have by law. Liability policies are also limited by terms in the policy.

    Uninsured motorist insurance addresses medical expenses that you or your passengers may incur when in an accident that is not your fault and is caused by another driver who does not have insurance.

    Before you purchase insurance, make sure that the agent/broker and insurer you select are licensed by the California Department of Insurance. Call 1-800-927-HELP to determine the license status and obtain additional information.

    Lesson Summary


      

    Lesson 9 Quiz


    You will now answer 5 questions to test what you learned during this lesson. You must answer all questions correctly to receive completion credit for this lesson. You may answer the questions as many times as necessary to get them right.

    You should review the lesson material if you don't do well on the quiz.

    1. Teenage drivers have a total accident rate that is _____ times that of adults:


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    2. If you have a tire blowout:


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    3. Failure to yield is the primary cause of what percentage of fatal and injury collisions?


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    4. To avoid tailgating, and help avoid a rear-end collision, you should give yourself a gap of how many seconds behind the car in front of you?


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    5. If you are distracted for one second, by a cell phone, passenger, or other distraction, at 30 mph you will travel how far "blindly"?


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