Georgia Property & Casualty Practice Exam

What is the main purpose of the Georgia Automobile Insurance Plan?

1. It provides low-cost auto insurance to Georgia residents.

2. It makes auto insurance available to applicants who have been unable to buy insurance through the usual methods.

3. It is a reinsurer for Georgia auto insurers.

4. It ensures the solvency of Georgia auto insurers and guarantees their policies.

The correct answer is: It makes auto insurance available to applicants who have been unable to buy insurance through the usual methods.

The main purpose of the Georgia Automobile Insurance Plan is to provide access to auto insurance for those individuals who have had difficulty obtaining coverage through standard insurance markets. This might include high-risk drivers or those with unfavorable driving histories who may be denied insurance by traditional providers. The plan serves as a safety net, ensuring that all residents have the opportunity to purchase a basic level of auto insurance, thereby promoting equitable access to coverage within the state. This is crucial for maintaining legal compliance with the state’s financial responsibility laws, which require drivers to have at least a minimum amount of liability coverage. In contrast, while cost may be a consideration for some, the primary focus is not on offering low-cost options, but rather on availability for high-risk individuals. Additionally, the plan does not function as a reinsurer for insurance companies nor does it directly guarantee the solvency of these insurers. Its focus is specifically on making insurance attainable for those who would otherwise struggle to secure coverage through regular avenues.