Question

On which of these may cancellation of an automobile policy by the insurer be based?

1) the age of the insured, such as turning 75 years old
2) failure of the insured to give written notice to the insurer of an accident within 15 days in which he was at fault
3) suspension of the driver's license of a person who is insured under the policy and who usually drives the insured automobile
4) all of the above

Answer 1

Including the age of the insured, failure to report accidents, and the suspension of the driver's license. Option 4, 'all of the above', is the correct answer.

Step-by-step explanation:

Regarding the question on which of these may cancellation of an automobile policy by the insurer be based, the correct answer is option 4) all of the above. Insurers can cancel a policy for various reasons, including the age of the insured if it poses a significant risk (though this is subject to regulatory scrutiny and anti-discrimination laws), failure to report an accident within a specified timeframe, and suspension of the driver's license of an insured person who usually operates the vehicle.

Auto insurance is critical for protecting drivers against potential financial liabilities from accidents or damages to their vehicle. The cost of insurance can vary based on factors like the vehicle's safety rating, the driver's history, and the vehicle's history. Insurers classify drivers into risk categories to determine premiums, taking into account past accidents, which may indicate a high-risk driver. Insurers rely on information to assess risk, but this information is often imperfect, hence they need guidelines to manage policies effectively.