State Farm Auto Insurance Practice Test

What does the Residual Market Plan aim to accomplish?

1. To provide insurance options for highly profitable clients

2. To insure individuals unable to obtain insurance through regular channels

3. To offer discounts for bundled policies

4. To manage high-risk business insurance

The correct answer is: To insure individuals unable to obtain insurance through regular channels

The Residual Market Plan is specifically designed to provide insurance coverage for individuals who cannot obtain insurance through standard or traditional channels. This includes those who may be deemed high-risk, such as drivers with a history of accidents or violations, or those living in areas with higher risks related to theft or natural disasters. The plan serves as a safety net, ensuring that these individuals still have access to necessary auto insurance coverage, which is crucial for protecting both them and the general public. While there may be other options presented that focus on profitable clients, discounts, or managing high-risk commercial insurance, these do not align with the primary goal of the Residual Market Plan. Its essential purpose is to step in where regular insurance markets may fall short, thereby promoting broader coverage inclusivity within the insurance system.