*Please provide explanation of answer*

Peggy is the proud owner of a brand new sports-car. Her automobile insurance policy includes collision and uninsured motorists coverage so that if the car is damaged in an accident, she will be able to have it restored like new. The policy states that Peggy is required to notify the insurer or the insurance agent immediately when a covered loss occurs. Four weeks ago, Peggy got into an accident while showing off for her friends at a local beach resort. Since the accident was her fault, she decided to get estimates of the damage, and possibly pay for the repairs herself so that her insurance premiums will not increase. After receiving the estimates, she determined it would be better to let the insurance company pay for the damage. Which of the following statements concerning Peggys auto insurance policy is correct?

1. The auto insurance policy is a bi-lateral contract, where Peggy is legally required to pay the premium and the insurance company is legally required to pay for covered damage in the event of a loss.
2. Since Peggy intentionally damaged the automobile, the insurance company will not pay for the damages to the car.
3. The insurer must pay for the damages to the car, since damages from an accident are specifically covered under the policy.
4. Peggy may not be able to collect under the insurance policy because she did not satisfy all of the conditions for coverage.