Other Than Life (OTL) Practice Exam

The insured accidentally collides with a guardrail. What type of claim is this?

1. Third Party Liability

2. Collision

3. Specified perils

4. Comprehensive

The correct answer is: Collision

In this scenario, the term "collision" refers specifically to an incident where the insured vehicle encounters another object, such as the guardrail mentioned. Collision coverage is a type of auto insurance that pays for damage to the insured vehicle resulting from a collision with another vehicle or an object, regardless of fault. The important aspect of collision claims is that they provide coverage for the costs to repair or replace the damaged vehicle, irrespective of how the accident occurred. On the other hand, third party liability would involve damages inflicted on another party due to the insured’s actions, not damage to the insured's own vehicle. Specified perils generally refers to insurance policies that cover certain outlined risks, but does not specifically apply to the scenario presented. Comprehensive coverage typically covers incidents unrelated to collisions (e.g., theft, vandalism, or natural disasters), making it irrelevant in this case of a direct impact with a guardrail. Thus, the classification of the claim as collision accurately captures the nature of the incident involving the insured's vehicle.