Question

As Paul is driving up to the mountains to do some hunting, a deer sprints out in front of him. He strikes the deer, causing $5,000 in damage to his truck at $1,000 in injuries to himself. What insurance coverage would pay for the damage to Paul's truck?

A. PIP
B. Comprehensive
C. Collision
D. Liability

Answer 1

The correct answer is B. Comprehensive insurance. It covers non-collision damages such as hitting an animal, and is the applicable coverage when Paul strikes a deer with his truck.

Step-by-step explanation:

The insurance coverage that would pay for the damage to Paul's truck after he struck a deer would be Comprehensive insurance.

Comprehensive coverage is responsible for damages to a vehicle that are not a result of collisions with other cars or objects and includes events such as hitting an animal, natural disasters, theft, and vandalism.

Therefore, the correct answer is B. Comprehensive.

Auto insurance operates on the principle of pooling risk. For example, if we consider 100 drivers with varying risks of accidents, they collectively pay premiums to cover the costs of damages incurred by any member of the pool.

In such a situation, the total premium collected needs to match the total cost of all damages for the insurance model to be sustainable.