1. Explain limited liability. How does it affect the demand for insurance?

2. Define loading. How does loading affect the demand for insurance?

3: Use an example to define risk aversion.

4: Are wealthy people more or less likely to buy insurance? Explain your answer.

5: What are major loss exposures arising from auto accidents?

6: What types of coverage are often provided by personal auto policies?

7: Individual auto liability can be sold either with a "single limit" or "split limits". Explain the difference.

8: What is the main difference between the medical payments coverage and the personal injury protection coverage?

9: What is the right of salvage?

10: What damages are usually covered under "other than collision" or "comprehensive" coverage?

11. Why many insurers provide a multiple car discount?

12: What are the main components of the rate classification systems used by auto insurers? Briefly explain each.

13: Why auto insurance is higher in large cities compared to small towns?

14: Explain underwriting. What are the main underwriting criteria?