The Purpose of Gap Insurance Is to

question 51

Multiple Choice

The purpose of gap insurance is to

• A)pay the difference between the bodily injury liability limit purchased and the actual amount of bodily injury liability if it exceeds the limit.
• B)pay the difference between the amount the insurer pays if a car is a total loss and the amount owed on a lease or car loan.
• C)pay the difference between the medical payments coverage limit and the actual medical expenses of injured family members or passengers in the insured auto.
• D)pay the difference between the uninsured motorists coverage limit and the actual amount of the medical expenses incurred by the insured.

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Definitions:

Total Revenue

It refers to the total receipts from sales of goods or services sold by a company during a particular period.

Purely Competitive Seller

Refers to a market participant in an industry structure where many sellers offer identical products, and no single seller can influence price or market conditions.

Demand (D)

A consumer's desire and willingness to pay a price for a specific good or service, holding all other factors constant.