Question 28

Deductibles apply to collision and other than collision coverage in personal automobile insurance.

Deductibles are an integral part of collision and other than collision coverage in personal automobile insurance policies. They represent the amount the insured must pay out of pocket before the insurance company covers the remaining costs.

A) Medical expense

Medical expense coverage typically pays for medical bills resulting from accidents, and deductibles do not apply in the same way as they do for collision or comprehensive coverage. Therefore, this option is incorrect as it does not involve the same deductible structure.

B) Collision and other than collision coverage

Collision and other than collision coverage are the areas where deductibles are most commonly applied. When a loss occurs under these coverages, the insured must pay the deductible before the insurance company pays for the remaining damages, making this option correct.

C) Bodily injury

Bodily injury coverage deals with injuries that others sustain due to the insured’s actions and typically does not involve deductibles. This type of coverage is based on liability, not on the insured's own losses, rendering this option incorrect.

D) Supplementary payments

Supplementary payments are additional benefits provided under an automobile policy, such as coverage for legal fees or lost wages, and they do not require a deductible. This makes this option incorrect, as deductibles do not apply to supplementary payments.

Conclusion

The correct answer is B, as deductibles are specifically related to collision and other than collision coverage in personal automobile insurance. Options A, C, and D fail to apply deductibles in their respective contexts, emphasizing that only collision and other than collision coverage involve out-of-pocket expenses before insurance benefits are activated.