/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 23 What does comprehensive coverage... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 8: Problem 23

What does comprehensive coverage pay for?

Short Answer

Expert verified
Comprehensive coverage pays for damage to your car that's not caused by collision. This includes coverage for incidences such as fire, theft, vandalism, storms, flood, falling objects, glass damage, and collision with animals. However, it does not generally cover personal belongings in the car, routine maintenance, wear and tear or damage/injuries from a collision that's not animal-related.

Step by step solution

01

Definition of Comprehensive Coverage

Comprehensive coverage, as it relates to auto insurance, is a type of protection that helps cover the cost of certain types of damage to your vehicle not caused by collisions. It is sometimes called 'other than collision' coverage or 'OTC'.
02

Cost coverage by Comprehensive Coverage

This type of coverage typically covers damage from fire, vandalism or theft, storm or flood, falling objects, hitting an animal and glass damage. This means if your car is damaged due to these reasons, you are likely to be eligible to claim monies to cover the repair or replacement cost from your insurer, minus your deductible.
03

Limits of Comprehensive Coverage

It's important to note that comprehensive coverage does not cover everything. For instance, it does not cover damage or injuries from a car accident, unless the damage was caused by an animal. In this case, collision coverage would be needed. It also does not generally cover personal belongings in the car, routine maintenance, or wear and tear.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Types of Auto Insurance Coverage
Auto insurance is essential for protecting yourself financially on the road. Different types of auto insurance coverage can provide various protections.
Some common types include:
  • Liability Insurance: This is generally required by law and covers damages or injuries you cause to others in an accident.
  • Collision Coverage: This helps pay for repairs to your vehicle after an accident, regardless of who is at fault.
  • Comprehensive Coverage: Also known as 'other than collision' coverage, this pays for damage that is not related to a collision, such as theft or natural disasters.
  • Personal Injury Protection (PIP): This covers medical expenses for you and your passengers after an accident.
  • Uninsured/Underinsured Motorist Coverage: Provides protection if you're involved in an accident with someone who doesn't have adequate insurance.
Understanding these types of coverages can help you make informed decisions when choosing your auto insurance policy.
Damage Covered by Insurance
When it comes to damage covered by car insurance, the type of coverage determines what is included.
Comprehensive insurance, for example, covers a wide range of non-collision-related damages:
  • Fire or Explosion: If your vehicle catches fire or is damaged by an explosion, comprehensive coverage will help pay for repairs.
  • Theft and Vandalism: These are common concerns, and comprehensive coverage can help replace or repair your car if it is stolen or vandalized.
  • Natural Disasters: Storms, floods, and other acts of nature can cause significant damage, which this coverage assists with.
  • Falling Objects: Whether it's a tree branch during a storm or debris from a construction site, comprehensive insurance has you covered.
  • Animal Collisions: If a deer darts in front of your car, this coverage helps repair the damage.
Each coverage type addresses different situations, so it's vital to know what each entails.
Insurance Claims Process
Understanding the claims process is crucial for effectively using your insurance. When an incident occurs, follow these steps:
  • Document the Damage: As soon as it's safe, take pictures and make notes about the damage to your vehicle.
  • Report the Incident: Contact your insurance company as soon as possible to notify them of the damage or incident.
  • File a Claim: Provide your insurance company with all necessary information, such as police reports if applicable, and complete all required forms.
  • Damage Assessment: The insurer may send an adjuster to assess the damage and determine the reimbursement amount.
  • Claim Settlement: Once everything is reviewed, you'll receive payment for the repairs or replacement, minus any deductible, if applicable.
Quick and thorough action can help expedite the claims process and ensure you receive the appropriate compensation.
Deductibles in Insurance Policies
Deductibles are an essential part of auto insurance policies, influencing both the cost of your premium and the amount you pay when making a claim.
A deductible is the amount of money you agree to pay out of pocket before your insurance coverage kicks in.
For instance, if you have a $500 deductible and you're filing a claim for $2,000 in repairs, you would pay the first $500, and your insurance would cover the remaining $1,500.
Here鈥檚 what to consider about deductibles:
  • High Deductible: Generally leads to lower monthly premiums but higher out-of-pocket costs in a claim.
  • Low Deductible: Typically results in higher premiums but lower costs when you file a claim.
  • Customizing Deductibles: You can choose different deductibles for various types of coverage (e.g., one deductible for comprehensive and another for collision).
Choosing the right deductible involves balancing upfront costs versus potential savings. Understanding your financial comfort level can help make this decision.

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In Exercises 11-18, a. Determine the periodic deposit. Round up to the nearest dollar. b. How much of the financial goal comes from deposits and how much comes from interest? \(\$ ?\) at the end of each month \(7.5 \%\) compounded monthly 10 years \(\$ 250,000\)

Make Sense? In Exercises 19-25, determine whether each statement makes sense or does not make sense, and explain your reasoning. I like to keep all my money, so I pay only the minimum required payment on my credit card.

Here are additional formulas that you will use to solve some of the remaining exercises. Be sure you understand what each formula describes and the meaning of the variables in the formulas. Here are two ways of investing 30,000 for 20 years $$ \begin{array}{|l|l|l|} \hline \text { Lump-Sum Deposit } & \text { Rate } & \text { Time } \\ \hline \$ 30,000 & \begin{array}{l} 5 \% \text { compounded } \\ \text { annually } \end{array} & 20 \text { years } \\ \hline \text { Periodic Deposit } & \text { Rate } & \text { Time } \\ \hline \begin{array}{l} \text { \$1500 at the end of } \\ \text { each year } \end{array} & \begin{array}{l} 5 \% \text { compounded } \\ \text { annually } \end{array} & \text { 20 years } \\ \hline \end{array} $$ a. After 20 years, how much more will you have from the lump-sum investment than from the annuity? b. After 20 years, how much more interest will have been earned from the lump- sum investment than from the annuity?

In Exercises \(31-34\), round up to the nearest dollar. You would like to have \(\$ 3500\) in four years for a special vacation following college graduation by making deposits at the end of every six months in an annuity that pays \(5 \%\) compounded semiannually. a. How much should you deposit at the end of every six months? b. How much of the \(\$ 3500\) comes from deposits and how much comes from interest?

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} . $$ Round answers to the nearest dollar. Suppose that you are buying a car for \(\$ 60,000\), including taxes and license fees. You saved \(\$ 10,000\) for a down payment. The dealer is offering you two incentives: Incentive \(\mathrm{A}\) is \(\$ 5000\) off the price of the car, followed by a five-year loan at \(7.34 \%\). Incentive B does not have a cash rebate, but provides free financing (no interest) over five years. What is the difference in monthly payments between the two offers? Which incentive is the better deal?10. Suppose that you are buying a car for \(\$ 56,000\), including taxes and license fees. You saved \(\$ 8000\) for a down payment. The dealer is offering you two incentives: Incentive \(A\) is \(\$ 10,000\) off the price of the car, followed by a four-year loan at \(12.5 \%\). Incentive B does not have a cash rebate, but provides free financing (no interest) over four years. What is the difference in monthly payments between the two offers? Which incentive is the better deal?
See all solutions

Recommended explanations on Math Textbooks

Discrete Mathematics

Read Explanation

Probability and Statistics

Read Explanation

Geometry

Read Explanation

Calculus

Read Explanation

Theoretical and Mathematical Physics

Read Explanation

Statistics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.