One policy definition in the Personal Auto Policy (PAP) includes four classes of vehicles. This description of vehicle classes is found in which one of the following policy definitions?
Select one:
A. “Occupying”
B. “Property damage”
C. “We,” “us,” and “our”
D. “Your covered auto”
Correct. It is found as part of “Your covered auto”
The Agreement and Definitions page of the Personal Auto Policy (PAP) includes
Select one:
A. A general agreement stating the insurer’s duty to pay damages and defense costs subject to the terms of the policy.
B. A general agreement stating that the insurer is providing the coverage subject to payment of premium and to the terms of the policy.
C. The name and mailing address of the insured.
D. The name of the insurer issuing the policy.
Correct. The Agreement and Definitions page of the Personal Auto Policy (PAP) includes a general agreement stating that the insurer is providing the coverage subject to payment of premium and to the terms of the policy.
The Personal Auto Policy (PAP) contains definitions of words and phrases that must be understood. Which one of the following is true regarding these policy definitions?
Select one:
A. The definition section of the PAP is found at the end of the policy to avoid conflicting with coverages.
B. Definitions are written in simple language to be easily understood by average individuals.
C. All coverage limits are included in the definitions section of the PAP.
D. Definitions have clarified the policy so that lawsuits are barred over policy language.
Correct. Definitions are written in simple language to be easily understood by average individuals.
Certain words and phrases defined in the Personal Auto Policy (PAP) weigh heavily on whether or not coverage is provided. The words “you” and “your” refer to
Select one:
A. The named insured and the insurer.
B. The named insured and family members.
C. The named insurer and family members.
D. The named insured and an unnamed spouse.
Correct. It refers to the named insured and an unnamed spouse.
Li insured his car with a Personal Auto Policy (PAP) that has split limits for liability coverage of $50/$100/$25. He was found by a court to be at fault for an accident that injured the other driver and ordered to pay a judgment of $45,000, plus $5,000 in prejudgment interest. How much will Li’s insurer pay under his PAP?
Select one:
A. $25,000
B. $30,000
C. $45,000
D. $50,000
Correct. $50,000. The damages covered also include any prejudgment interest awarded against the insured. (Note that because prejudgment interest is part of the award for damages, it is subject to the applicable limit of liability.)
Donna owns a car insured by a Personal Auto Policy (PAP) with the minimum liability limits required by her state, $10/$20/$5. While on vacation in another state where the minimum liability limits are $15/$30/$5, she causes an accident. For purposes of that loss, her liability limits under her PAP are
Select one:
A. $10/$20/$5.
B. $15/$30/$5.
C. $15/$30/$10.
D. $25/$50/$15.
Correct. $15/$30/$5. The Out of State Coverage provision applies when an auto accident occurs in a state other than the one in which the covered auto is principally garaged. If an accident occurs in a state that has a law that requires higher liability limits than the limits shown in the declarations, the PAP automatically provides the higher required limits for the accident.
Liability split limits for a Personal Auto Policy (PAP) expressed as $300/$500/$100 mean limits of
Select one:
A. $300 per person for bodily injury, $500 per accident for bodily injury, and $100 per accident for property damage.
B. $300,000 per accident for bodily injury, $500,000 for property damage and bodily injury, and a $100,000 deductible.
C. $300,000 per person for bodily injury, $500,000 per accident for bodily injury, and $100,000 per accident for property damage.
D. $900,000 for all damages combined.
Correct. Liability split limits for a PAP expressed as $300/$500/$100 mean limits of $300,000 per person for bodily injury, $500,000 per accident for bodily injury, and $100,000 per accident for property damage.
Liana insured her car with a Personal Auto Policy (PAP) that has split limits for liability coverage of $100/$300/$75. She was found by a court to be at fault for an accident that injured the other driver and ordered to pay a judgment of $98,000, plus $6,000 in prejudgment interest. How much will Liana’s insurer pay under her PAP?
Select one:
A. $92,000
B. $98,000
C. $100,000
D. $104,000
Correct. $100,000. Because prejudgment interest is part of the award for damages, it is subject to the applicable limit of liability for Part A.
An owner of a car insured with a Personal Auto Policy (PAP) for which an insured selected and paid a premium for medical payments coverage
Select one:
A. Would not be eligible for medical payments under the PAP if injured while occupying a motorcycle on a public highway.
B. Would be eligible for medical payments under the PAP if injured while occupying a motorcycle on a public highway.
C. Would be eligible for medical payments under the PAP if injured while occupying a motorcycle on the insured’s own property.
D. Would not be eligible for medical payments under the PAP if injured while driving a motorcycle but would be eligible for such coverage while riding as a passenger on a motorcycle.
Correct. A medical payments coverage exclusion applies if the insured is injured while occupying a motorized vehicle with fewer than four wheels.
Under the uninsured motorists (UM) coverage in the Personal Auto Policy (PAP), the insurer agrees to pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle. These damages are best identified as which one of the following?
Select one:
A. Rehabilitation expenses
B. Medical expenses
C. Lost wages
D. Compensatory damages
Correct. These damages are compensatory damages.
With respect to a vehicle used as a temporary substitute for the insured’s covered auto, medical payments coverage under a Personal Auto Policy (PAP)
Select one:
A. Are specifically excluded from coverage.
B. Is excess over other collectible auto insurance that pays medical expenses.
C. Is primary for medical and funeral expenses.
D. Is shared on a pro rata basis.
Correct. With respect to a nonowned vehicle or a vehicle while used as a temporary substitute for the insured’s covered auto, medical payments coverage under a PAP is excess over any other collectible auto insurance that pays medical or funeral expenses.
An insured has a Personal Auto Policy (PAP) that includes uninsured motorist (UM) coverage for his own car. The insured is injured while riding on a private tour bus that is hit by an at-fault uninsured motorist. Which one of the following statements is true?
Select one:
A. The insured is entitled to UM coverage under his PAP under the share-the-expense car pool exception.
B. The insured is entitled to UM coverage from the bus company’s policy but not from his own PAP.
C. The insured is entitled to UM coverage under his or her PAP.
D. The insured is not entitled to UM coverage because of the public or livery conveyance exclusion.
Correct. Because the public or livery conveyance exclusion applies only to “your covered auto,” the insured and family members would be covered for UM while occupying a public or livery conveyance that is not “your covered auto.”
Which one of the following causes of loss is covered under the other than collision (OTC) section of the Personal Auto Policy (PAP)?
Select one:
A. Hitting a tree
B. Missiles or falling objects
C. Overturn from the driver losing control
D. Hitting another car
Correct. Missiles or falling objects are listed as covered causes of loss under the OTC section of the PAP.
Collision coverage under the Personal Auto Policy (PAP)
Select one:
A. Applies only to damage to a vehicle for which the owner of the vehicle is responsible.
B. Applies to damage to a vehicle resulting from explosion or earthquake.
C. Applies to damage to a parked insured vehicle resulting from a passenger in another parked vehicle opening its door.
D. Is less expensive than other than collision (OTC) coverage.
Correct. Collision coverage under the Personal Auto Policy (PAP) applies to damage to a parked insured vehicle resulting from a passenger in another parked vehicle opening its door.
Jamal flew from his home in New York to California for a vacation. While there, he rented a car. Jamal declined all of the optional coverages that were offered to him at the rental agency. While driving the rental car, Jamal was at fault in a collision with a truck. The repairs to the rental car will cost $2,000. Jamal’s Personal Auto Policy (PAP) has a $250 other than collision deductible and a $500 collision deductible. What amount will Jamal’s insurer pay for the loss?
Select one:
A. $0
B. $1,500
C. $1,750
D. $2,000
Correct. $2,000 – $500 deductible = $1,500. Part D coverages apply to a “non-owned auto” unless it is one that the insured regularly drives.
John has a Personal Auto Policy (PAP) with both collision and other than collision coverages. While John was working out at the gym, his car was stolen from the parking lot. The police recovered John’s car five days later, but it had been damaged. John’s car was in the shop 10 days for repairs. For what number of days will John’s insurer pay him for transportation expenses?
Select one:
A. 5
B. 10
C. 13
D. 15
Correct. 5 + 10 – 2 = 13. A 48-hour waiting period applies to total theft losses under OTC coverage.
Which one of the following statements is true regarding cancellation of the Personal Auto Policy (PAP)?
Select one:
A. An insurer cannot cancel a policy for nonpayment of premium.
B. Insurers can usually cancel a new policy that has been in force for less than a certain number of days (such as sixty days).
C. In most states a verbal notice of cancellation is sufficient, provided notice is given 90 days prior to the cancellation.
D. Whenever state laws and policy cancellation provisions conflict, the policy provisions supersede the state law.
Correct. Insurers can usually cancel a new policy that has been in force for less than a certain number of days (such as sixty days).
Bob has a Personal Auto Policy (PAP) with physical damage coverages. Bob got up early one morning to go to work and found vandals had broken the rear window of his car during the night. Two nights later it rained heavily, which ruined the back seat upholstery. After a few days, Bob submitted a claim to his insurer. Which one of the Duties After an Accident or Loss in the PAP has Bob failed to comply with?
Select one:
A. Prevent further loss
B. Proof of loss
C. Cooperation with the insurer
D. Permit inspection and appraisal
Correct. Bob has failed to comply with the Duties After an Accident or Loss in the PAP to prevent further loss.
Under the Personal Auto Policy (PAP), the named insured’s rights and duties under the policy
Select one:
A. Cannot be assigned to another party without the insurer’s written consent.
B. Can be transferred if the insured sells an auto.
C. Can be transferred by a verbal agreement.
D. Can be assigned to another party without the insurer’s written consent.
Correct. Under the Personal Auto Policy (PAP), the named insured’s rights and duties under the policy cannot be assigned to another party without the insurer’s written consent.
In addition to general duties under a Personal Auto Policy (PAP), a person seeking coverage under Part D—Coverage for Damage to Your Auto must perform additional duties. Which one of the following is one of these additional duties?
Select one:
A. Submit a proof of loss when required by the insurer
B. Submit to a physical examination conducted by a doctor chosen by the insurer
C. Promptly notify police if a hit-and-run driver was involved in the accident
D. Promptly notify police if a covered auto is stolen
Correct. This is a general duty. In addition to general duties under a Personal Auto Policy (PAP), a person seeking coverage under Part D—Coverage for Damage to Your Auto must promptly notify police if a covered auto is stolen. This may increase the possibility that the vehicle will be recovered.
0 Comments