Insurance Customer Service Rep 440 Practice Test 2025 – Complete Exam Prep

In the context of Basic Personal Injury Protection (PIP) coverage, the deductible is the amount that the insured must pay out of pocket before the insurance coverage begins to take effect. The selection of $1,000 as the deductible amount for Jeremy's Basic PIP coverage aligns with standard provisions for many insurance policies, where a $1,000 deductible is common.

This deductible is significant as it impacts how much the insured pays in the event of a claim. If Jeremy were to incur medical expenses due to a covered accident, he would be responsible for paying the first $1,000, and the insurance would then cover the remaining costs up to the policy limits. This deductible structure helps to manage risks and costs for both the insurer and the insured.

The options with lower and higher amounts, like $500 or $1,500, might not accurately reflect the typical deductible levels for Basic PIP coverage, which often standardizes around $1,000. The higher deductible of $2,000 would impose a greater financial burden on the insured before the coverage kicks in, which is generally not the case for Basic PIP policies designed to provide essential coverage with a moderate deductible.