United Kingdom Car Insurance Practice Exam

United Kingdom Car Insurance Practice Exam

 

1. What is the minimum level of car insurance required by law in the UK?
   • A) Comprehensive
   • B) Third-Party
   • C) Third-Party, Fire, and Theft
   • D) No insurance required
     Answer: B) Third-Party

 

1. What does comprehensive car insurance cover?
   • A) Only damage to your car
   • B) Damage to your car, third-party damage, fire, theft, and vandalism
   • C) Only damage to third-party vehicles
   • D) Only theft
     
     
     

     Answer: B) Damage to your car, third-party damage, fire, theft, and vandalism

 

1. What is a “no claims discount” (NCD)?
   • A) A discount for paying annually
   • B) A discount for not making any claims over a certain period
   • C) A discount for driving a low-risk vehicle
   • D) A discount for being a young driver
     Answer: B) A discount for not making any claims over a certain period

 

1. What does “excess” mean in car insurance?
   • A) The monthly premium
   • B) The amount you pay out of pocket before your insurer covers the claim
   • C) The total amount your insurer will pay
   • D) The cost of your vehicle
     Answer: B) The amount you pay out of pocket before your insurer covers the claim

 

1. Which type of insurance provides the most basic level of coverage?
   • A) Comprehensive
   • B) Third-Party
   • C) Third-Party, Fire, and Theft
   • D) None
     Answer: B) Third-Party

 

1. Which of the following is NOT covered by most car insurance policies?
   • A) Fire damage to your vehicle
   • B) Theft of your vehicle
   • C) Damage caused by wear and tear
   • D) Injury to others in an accident
     Answer: C) Damage caused by wear and tear

 

1. What is the primary reason why young drivers often pay higher premiums?
   • A) They are considered a higher risk due to inexperience
   • B) They often choose higher excess levels
   • C) They drive more expensive cars
   • D) They live in urban areas
     Answer: A) They are considered a higher risk due to inexperience

 

1. What does third-party car insurance cover?
   • A) Only the damage to your own vehicle
   • B) Damage to third-party property and injury to others
   • C) Theft of your car
   • D) Damage to your car in the event of a fire
     Answer: B) Damage to third-party property and injury to others

 

1. What does a “black box” insurance policy monitor?
   • A) Your fuel consumption
   • B) Your driving habits, such as speed and braking
   • C) The age of your vehicle
   • D) Your annual mileage
     Answer: B) Your driving habits, such as speed and braking

 

1. What is the purpose of a telematics (black box) insurance policy?

• A) To provide comprehensive coverage at a lower price
• B) To monitor driving behavior and reward safe driving
• C) To guarantee no claims discount
• D) To cover repair costs for mechanical failures
  Answer: B) To monitor driving behavior and reward safe driving

 

1. What is the “policyholder” in car insurance?

• A) The driver of the vehicle
• B) The person who owns and holds the insurance policy
• C) The person who makes a claim
• D) The person who pays the premium
  Answer: B) The person who owns and holds the insurance policy

 

1. What happens if you drive without valid insurance in the UK?

• A) You may be fined or have your license revoked
• B) Your car will be impounded
• C) You could be taken to court
• D) All of the above
  Answer: D) All of the above

 

1. Which of the following could invalidate your car insurance policy?

• A) Driving your car outside of the UK
• B) Providing false information during the application
• C) Driving while under the influence of alcohol
• D) All of the above
  Answer: D) All of the above

1. What is “insured value” in the context of car insurance?

• A) The price at which you bought the car
• B) The market value of the car at the time of the claim
• C) The cost of the car including repairs
• D) The total premium you pay for the insurance
  Answer: B) The market value of the car at the time of the claim

 

1. What is “agreed value” insurance?

• A) The insurer will pay a pre-agreed amount in case of loss, regardless of the car’s market value
• B) The insurer will pay the cost of repairs
• C) The insurer only covers the cost of the car at the time of purchase
• D) The insurer will not cover depreciation in case of a claim
  Answer: A) The insurer will pay a pre-agreed amount in case of loss, regardless of the car’s market value

 

1. What is an “add-on” in car insurance policies?

• A) Additional insurance for specific coverage options
• B) The cost of adding a second driver to the policy
• C) The monthly payment method for insurance
• D) A discount for choosing comprehensive insurance
  Answer: A) Additional insurance for specific coverage options

 

1. Which of the following is typically excluded from a standard car insurance policy?

• A) Theft
• B) Vandalism
• C) Wear and tear
• D) Fire damage
  Answer: C) Wear and tear

 

1. What does “third-party, fire, and theft” insurance cover?

• A) Damage to third-party property, fire, and theft of your vehicle
• B) Only fire and theft of your vehicle
• C) Only damage to third-party vehicles
• D) Only personal injuries
  Answer: A) Damage to third-party property, fire, and theft of your vehicle

 

1. What should you do if you receive a speeding ticket while driving under a car insurance policy?

• A) Inform your insurer if required
• B) Pay the ticket but do not inform your insurer
• C) Ignore the ticket
• D) Appeal the ticket before notifying the insurer
  Answer: A) Inform your insurer if required

 

1. What type of damage is covered under “comprehensive insurance”?

• A) Damage to other vehicles only
• B) Damage to your own vehicle, theft, and damage caused by accidents
• C) Only damage caused by fire
• D) Only third-party injury and property damage
  Answer: B) Damage to your own vehicle, theft, and damage caused by accidents

 

1. What should you do if your car is stolen?

• A) Contact your insurer and the police immediately
• B) Wait 48 hours before contacting your insurer
• C) Only report to the police
• D) Nothing, as the insurer will automatically know
  Answer: A) Contact your insurer and the police immediately

 

1. What is the purpose of a “windshield cover” in car insurance?

• A) To cover the cost of replacing a damaged windshield
• B) To cover the cost of repairs for any mechanical failures
• C) To cover damage caused by weather conditions
• D) To cover the cost of adding a GPS system to your car
  
  
  

  Answer: A) To cover the cost of replacing a damaged windshield

 

1. What is “personal injury cover” in car insurance?

• A) Covers the cost of damage to the car
• B) Covers the medical expenses for injuries sustained in a car accident
• C) Covers the legal costs of a claim
• D) Covers theft and fire damage
  Answer: B) Covers the medical expenses for injuries sustained in a car accident

 

1. If another driver is at fault in an accident, what should you do?

• A) Contact their insurer directly
• B) Make a claim on your own insurance
• C) Report the incident to the police immediately
• D) Wait for their insurer to contact you
  Answer: B) Make a claim on your own insurance

1. How should you report a car accident to your insurer?

• A) Wait until you have a police report
• B) Report it immediately after the incident, even if no one was injured
• C) Only if the damage is severe
• D) Only after you have resolved the incident privately
  Answer: B) Report it immediately after the incident, even if no one was injured

 

1. Which of the following is considered a “write-off” in car insurance?

• A) A car that is repaired but not covered by insurance
• B) A car that is too damaged to repair economically
• C) A car that is not insured
• D) A car with minor scratches and dents
  Answer: B) A car that is too damaged to repair economically

 

1. What is a “courtesy car” in car insurance?

• A) A car loaned to you while your car is being repaired
• B) A car rented from a third-party provider
• C) A car you are insured to drive under a third-party policy
• D) A car that belongs to your insurer
  Answer: A) A car loaned to you while your car is being repaired

 

1. What should you do if your insurer rejects your claim?

• A) Appeal the decision through the Financial Ombudsman Service (FOS)
• B) Accept the decision and pay for repairs yourself
• C) Contact the police to investigate
• D) Do nothing and move on
  Answer: A) Appeal the decision through the Financial Ombudsman Service (FOS)

 

1. What is the purpose of “legal cover” in car insurance?

• A) Covers repair costs for accidents
• B) Provides assistance with legal costs after an accident
• C) Covers the loss of earnings after an accident
• D) Covers the cost of replacing lost keys
  Answer: B) Provides assistance with legal costs after an accident

 

1. Which of the following is an example of “modifying” your car?

• A) Adding a new paint job
• B) Upgrading the engine or exhaust
• C) Installing new seats or stereo equipment
• D) All of the above
  Answer: D) All of the above

 

1. What is the penalty for driving without insurance in the UK?

• A) A fine of up to £1,000 and six penalty points on your license
• B) A fine of up to £500
• C) A ban on driving for 6 months
• D) A penalty of up to £5,000
  Answer: A) A fine of up to £1,000 and six penalty points on your license

 

1. What is a “green card” in car insurance?

• A) A discount card for insurance premiums
• B) A document proving that you have valid insurance when driving abroad
• C) A temporary insurance policy for driving outside the UK
• D) A type of no-claims bonus
  Answer: B) A document proving that you have valid insurance when driving abroad

 

1. Which of the following documents must you carry when driving a vehicle?

• A) Proof of insurance
• B) A valid driving license
• C) The vehicle’s MOT certificate (if applicable)
• D) All of the above
  Answer: D) All of the above

 

1. What is the Financial Services Compensation Scheme (FSCS) in relation to car insurance?

• A) A government-backed insurance for lost or stolen cars
• B) A service that compensates consumers if their insurance company goes bankrupt
• C) A consumer protection agency for insurance fraud
• D) A refund program for car insurance overpayments
  Answer: B) A service that compensates consumers if their insurance company goes bankrupt

 

1. What does the Consumer Rights Act 2015 cover in relation to car insurance?

• A) The right to choose your insurer
• B) The right to fair treatment and transparent terms
• C) The right to cancel any policy without penalty
• D) The right to legal advice after an accident
  Answer: B) The right to fair treatment and transparent terms

 

1. What happens if you don’t disclose material information when applying for car insurance?

• A) Your policy might be canceled or claims denied
• B) Your premium will be lowered
• C) You will automatically receive a refund
• D) Nothing, as insurers do not check for hidden information
  Answer: A) Your policy might be canceled or claims denied

 

1. If your car insurance policy is canceled mid-term, what might you be charged?

• A) A cancellation fee
• B) The full premium for the remainder of the term
• C) A penalty for breaking the contract
• D) All of the above
  Answer: D) All of the above

 

1. What is the purpose of the Financial Conduct Authority (FCA) in car insurance?

• A) To manage the insurance claims process
• B) To ensure that car insurers treat customers fairly and maintain high standards
• C) To issue policies and make payments
• D) To promote vehicle safety
  Answer: B) To ensure that car insurers treat customers fairly and maintain high standards

 

1. What is a “no-fault” claim in car insurance?

• A) A claim where neither driver is at fault
• B) A claim where one driver is fully responsible
• C) A claim where you are the only driver involved
• D) A claim made by your insurer on your behalf
  Answer: B) A claim where one driver is fully responsible

 

1. What does “insurer insolvency” mean?

• A) The insurer has ceased trading
• B) The insurer has gone bankrupt and is unable to pay claims
• C) The insurer has increased premiums
• D) The insurer has lost its regulatory license
  Answer: B) The insurer has gone bankrupt and is unable to pay claims

 

1. What is the primary purpose of “breakdown cover” in car insurance?

• A) To cover repair costs
• B) To provide assistance when your car breaks down
• C) To offer free repairs at any mechanic
• D) To cover the cost of your car’s depreciation
  Answer: B) To provide assistance when your car breaks down

 

1. What does “accidental damage” cover in car insurance?

• A) Damage caused by a collision with another vehicle or object
• B) Wear and tear damage
• C) Damage from mechanical failure
• D) Damage caused by the owner’s negligence
  Answer: A) Damage caused by a collision with another vehicle or object

 

1. What is a “temporary insurance policy”?

• A) A short-term insurance policy for specific occasions, such as test driving or borrowing a car
• B) A policy that covers a car’s repair costs
• C) A special policy for high-risk drivers
• D) A policy that covers rental cars
  Answer: A) A short-term insurance policy for specific occasions, such as test driving or borrowing a car

 

1. What is the difference between “market value” and “agreed value” insurance?

• A) Market value is based on the current market price, agreed value is pre-set by the insurer
• B) Market value is higher than agreed value
• C) Agreed value is only used for older cars
• D) There is no difference
  Answer: A) Market value is based on the current market price, agreed value is pre-set by the insurer

 

1. What is “personal belongings cover” in car insurance?

• A) Coverage for items left in your car that are lost or damaged
• B) Coverage for injuries sustained by passengers
• C) Coverage for personal injuries to the driver
• D) Coverage for damage to your car caused by others
  Answer: A) Coverage for items left in your car that are lost or damaged

 

1. What is a “premium”?

• A) The deductible amount you pay after a claim
• B) The monthly or annual payment made to maintain your insurance policy
• C) The market value of your car
• D) The amount your insurance company will pay for repairs
  Answer: B) The monthly or annual payment made to maintain your insurance policy

 

1. What does “full coverage” insurance generally refer to?

• A) Comprehensive coverage including liability, theft, fire, and accident damage
• B) Only third-party coverage
• C) Only fire and theft
• D) A basic form of insurance
  Answer: A) Comprehensive coverage including liability, theft, fire, and accident damage

 

1. What is “legal protection insurance”?

• A) Covers legal costs if you are involved in a legal dispute
• B) Covers damages to your vehicle caused by other drivers
• C) Provides discounts on legal services
• D) Covers damage to your car due to vandalism
  Answer: A) Covers legal costs if you are involved in a legal dispute

 

1. What does “driver’s excess” refer to?

• A) The amount you pay for the first part of a claim
• B) The number of passengers allowed in the vehicle
• C) The amount you pay for repairs after an accident
• D) The total policy cost
  Answer: A) The amount you pay for the first part of a claim

 

1. What is “temporary car insurance”?

• A) Insurance for a single trip or specific period
• B) Insurance for rental cars
• C) A policy for newly purchased vehicles
• D) A special policy for high-risk drivers
  Answer: A) Insurance for a single trip or specific period