COMMERCIAL AUTOMOBILE INSURANCE

What coverage is used to cover damage to a customer's auto in the care and custody of a repair garage?

Garagekeeper's liability.

The coverage territory of the Business Auto form provides for "worldwide liability coverage" for private passenger autos that the insured:

Hires, leases, rents or borrows without a driver while outside the United States, its territories and possessions. World-wide liability coverage is provided for a period of 30 days for autos the insured hires, leases, rents or borrows without a driver. The insured's liability is determined in a settlement agreed to by the insurer, or in a suit filed in the United States or its territories, possessions, Puerto Rico or Canada.

Part II - Liability of the Auto Dealers' (Garage) coverage form provides coverage for all of the following, EXCEPT:

Liability arising from damage to the property of a customer left in the insured's care.

Under a Business Auto policy, which of the following types of physical damage loss is not covered?

Loss to radar detection equipment.

The MCS-90 Endorsement to a Truckers or Motor Carrier Coverage form can be cancelled:

With 35-days notice if either the insured or the insurer cancels.

The exclusions of Section II of the Business Auto policy are found in:

Part B.

The MCS-90 endorsement provides coverage for all of the following, EXCEPT:

Personal injury. Personal injury is NOT covered by the MCS-90 endorsement. The endorsement specifies that is covers "public liability" which includes coverage for bodily injury, property damage, and environmental restoration.

Which of the following sections of a Business Auto policy contains the "Definitions" of the policy?

Section V.

The supplementary payments of Section II - Liability of the Business Automobile policy covers the cost of a bail bond up to:

$2,000. Supplementary payments include the cost of a bail bond up to $2,000 including bonds for related traffic offenses required because of a covered accident.

Section III of a Business Auto policy will pay up to _____ per day for transportation expense.

$30

The Motor Carrier Act of 1980 requires those hired to transport nonhazardous property to carry a minimum limit of liability of:

$750 thousand.

The Loss of Use coverage extension of Section III of a Business Auto policy will pay a maximum of:

$900.

Loza's automobile, covered by a Business Auto policy, was stolen. Temporary transportation expenses will be paid beginning:

48 hours after the theft.

All of the following would be covered under the Business Auto policy, EXCEPT:

A business partner using his own vehicle running a personal errand.

Which of the following would be covered under Business Auto Symbol 7?

Specifically described auto only. The purpose of Symbol 7 on Commercial Auto policies is to cover only specifically described vehicles as opposed to covering any vehicle. This occurs when an insurer may agree to cover all of the owner's vehicles except certain types. A vehicle used to transport pollutants or explosives is an example.

Under the comprehensive coverage of a Business Auto policy, which of the following would not be a covered loss?

After sliding on an icy pavement, a driver hits a guard rail. Since the vehicle sustained damage by hitting the guard rail, it is considered a collision claim. This is because the definition of collision includes the upset of a vehicle, its impact with another vehicle or object; anything else would be other than collision and thus be covered by comprehensive coverage.

Which of the following would be covered under the "supplementary payments" of Section II - Liability of a Business Auto policy?

All post-judgment interest in a suit defended by the insurer.

Which of the following would be "an insured" under a Business Auto policy?

Any person who is driving a covered auto owned by the named insured after receiving permission.

Uninsured motorist coverage and medical payments coverage under a Business Automobile policy:

Are not covered by the policy unless added by endorsement.

Which of the following Business Auto symbols would permit the insured to purchase both liability coverage and physical damage coverage?

Symbol 2. Symbol 2 is the only symbol listed in the answer choices (there ARE others that were NOT listed in the answer choices) that permits the insured to purchase both liability coverage and physical damage coverage.

A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Motor Carrier form by using:

Symbol 69. The Truckers form uses Symbol 48 to cover trailers in possession of the insured under a written Trailer Interchange Agreement. The Motor Carrier Form uses Symbol 69.

What symbol is used for a non-owned auto under a Business Automobile policy?

Symbol 9. Symbol 9 is used to provide coverage for non-owned autos used for the businesses under a Business Auto policy.

All of the following are additional duties of an insured after a physical damage loss claimed under a Business Auto policy, EXCEPT:

Taking a damaged vehicle to a repair shop immediately to have an estimate of the damage made.

Which of the following types of businesses is most likely to be covered under the Auto Dealers' (Garage) form?

Tex's Auto Sales & Service, Inc.

Symbol 23 is designated on the insured's Garage Coverage form. This indicates:

That owned private passenger autos only are covered.

Section II of the Business Auto policy provides the details of the insurer's "duty to defend" the insured in a lawsuit. This duty is more broad than the insurer's responsibility to pay any damages for which the insured is liable. Which of the following describes this broadened duty on the BAP?

The BAP "duty to defend" extends to providing a defense against fraudulent claims.

Calvin has a Business Automobile policy covering the automobiles he uses in his business. He acquires a new trailer with a load capacity of 1,000 pounds and he plans to attach it to a van he already owns. The van is scheduled on the policy with Symbol 7 listed beside it. Based on this information, how long does Calvin have to report his new trailer to the insurance company?

Calvin is required to report newly acquired vehicles to the insurance company within 30 days.

Which of the following is NOT a Commercial Automobile form that may be added to a Commercial Package policy?

Commercial Vehicle.

Which of the following is NOT excluded by Section II - Liability of the Business Automobile policy?

Cost to defend the insured.

Which of the following statements is TRUE regarding "diminution in value" coverage under Section III of the Business Auto policy?

Coverage for "diminution in value" is not provided under Section III because it is an indirect loss.

The insured is covered under a Business Auto policy and experiences a collision loss. The insured will receive:

The lesser amount of the actual cash value or the cost to repair or replace.

The "Towing & Labor" coverage of a Business Auto policy will cover all of the following, EXCEPT:

Buses

An insured has purchased BAP physical damage coverage against specified causes of loss. Protection applies to all of the following perils, EXCEPT:

Falling objects.

Which of the garage policy coverages will pay for physical damage to a garage customer's auto regardless of legal liability?

Garagekeepers direct primary coverage. The Garagekeepers' direct primary coverage pays for damages to a customer's vehicle regardless of fault. The Garagekeepers legal liability form would require that the claimant prove negligence on the part of the garage.

In which of the following situations would Section II of the Business Auto policy provide coverage?

Liability of the insured assumed under a "sidetrack agreement".

The unendorsed standard Garage Coverage form includes all of the following, EXCEPT:

Medical payments coverage for the insured. Medical payments coverage is not automatically included on the Garage Coverage form. This type of coverage must be added by endorsement.

Which of the following is NOT a coverage of the Truckers' form?

Medical payments. Medical payments is not a coverage of the Truckers' form. This coverage would need to be added by endorsement.

All of the following are included in the definition of "auto" under the Business Auto policy, EXCEPT:

Mobile equipment.

Jerusha has her business automobiles covered under a Business Auto policy in a state that does not have a no-fault law. She has purchased a new business van recently but was not required under her policy provisions to report her newly acquired auto. Based on this information, which of the following BAP symbol is listed on the Declarations page of Jerusha's policy?

Symbol 1. When Symbol 1 is listed on the Declarations page, the insured is not required to report "newly acquired autos" to the insurer. This is because Symbol 1 covers "any auto". Symbol 7 used for specifically described autos and we know Jerusha did not specifically describe her new van to the insurer. Symbol 5 is used in states where there IS a no-fault law. Symbol 3 is used for owned private passenger autos, which would not apply to Jerusha's new van.

A road construction contractor has mobile equipment that is used in his business. The state has changed the law and now requires some of the equipment to carry liability insurance to comply with the financial responsibility laws of the state. What symbol will the insurance company use to add these items to the insured's commercial auto policy?

Symbol 19. The insurance company will use Symbol 19, "mobile equipment subject to compulsory auto financial responsibility."

Which of the following symbols when indicated on an Auto Dealers' (Garage) form indicates coverage for "any auto"?

Symbol 21. Symbol 21, when indicated on an Auto Dealers' (Garage) form indicates coverage for "any auto".

Under the "Other Insurance" clause of a Business Auto policy, which of the following statements is TRUE?

The BAP provides primary coverage for owned autos and excess insurance for non-owned autos.

Which of the following statements is TRUE regarding the appraisal process under a Business Automobile claim?

Either the insured or the insurer may demand an appraisal.

Which Garage Coverage form symbol is used to indicate that the covered automobile(s) is/are subject to a compulsory "no-fault" law?

Symbol 25. Symbol 25 is used to designate covered autos that are subject to compulsory state "no-fault" laws.

The liability section of the Business Auto policy excludes coverage for pollution damage except in certain circumstances. Which of the following statements describe a circumstance where pollution would NOT be covered by the Business Auto policy?

When a covered truck leaks contaminating anti-freeze from its radiator because the radiator cap was accidentally left off. For the leaking antifreeze (a pollutant) to be covered, the leak must have been caused by an accident.

Joe owns an automobile dealership. Alex purchases a vehicle from Joe and drives it home. Later that week, Alex experiences a mechanical problem with the car and brings it back to Joe's dealership. Joe asks his best mechanic to test drive Alex's car around the block to determine the problem. While on the test drive, the mechanic hits another vehicle and injures its driver. Alex's car is also totaled in the accident. Alex's vehicle would be covered under which coverage of Joe's Garage policy?

Garagekeepers liability

Which of the following statements is NOT TRUE regarding Trailer Interchange coverage?

It covers damage to a trailer under the policy of the trucker who owns the trailer but was not in possession of that trailer at the time of the loss.

Which of the following statements is NOT TRUE regarding Symbol 1 of a Business Auto policy?

It provides narrow liability coverage therefore insurance companies use it frequently.

When Symbol 48 is indicated on a Truckers' form:

Physical damage to a non-owned trailer is covered when the insured trucker is liable under a written interchange agreement. Trailer Interchange insurance covers damage to a non-owned trailer and applies when truckers borrow or lease a trailer from another firm for use in their own business - a very frequent practice in the industry.

Which of the following Business Automobile policy symbols permits the insured to purchase coverage for both liability and physical damage?

Symbol 3. Symbol 3 is the only BAP symbol (listed in the answer choices) that covers the automobile for both liability and physical damage coverage. Symbols 6, 7, and 19 (among others) provides only liability coverage.

Mary's Maids, Inc. wants to cover a fleet of sedans used by the maids to travel to the homes they are servicing. Which of the following symbols would most likely be scheduled on the Declarations page of Mary's a Business Auto form?

Symbol 3. Symbol 3 would be used as a fleet of private passenger vehicles owned by the named insured would be covered.

All of the following statements regarding the Motor Carrier Act of 1980 are correct, EXCEPT:

The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to nonowned trailers being used under a written Trailer Interchange agreement.

Lawrence's business is covered by a Business Auto policy and carries the required liability limit for his state of $30,000 for bodily injury to all persons. Lawrence drives the truck to another state where the financial responsibility limit is $50,000 for bodily injury to all persons. While in the other state, Lawrence has an at-fault accident and injures 3 people who sue for $60,000 in total damages. How much will Lawrence's Business Auto policy pay on this claim?

$50,000. Lawrence's policy will automatically pay the financial responsibility limit for the state in which Lawrence was driving, which would be $50,000. Lawrence would have to pay the remaining $10,000 out of pocket. This is due to the coverage extension that modify's the policy's liability coverage limit to meet another states' minimum required limits when the covered auto is being driven in that state.

Bob and Pete's Used Cars has purchased a Garage policy with dealer's physical damage coverage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases a vehicle and drives it The "Dealers Drive Away Collision" endorsement eliminates the 50 miles coverage limitation of the dealer's physical damage coverage. back to the dealership. If Pete suffers a physical damage loss during this trip:

Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage policy.

Bob and Pete's Used Cars has purchased a Garage policy with dealer's physical damage coverage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases a vehicle and drives it The "Dealers Drive Away Collision" endorsement eliminates the 50 miles coverage limitation of the dealer's physical damage coverage. back to the dealership. If Pete suffers a physical damage loss during this trip:

Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage policy. The "Dealers Drive Away Collision" endorsement eliminates the 50 miles coverage limitation of the dealer's physical damage coverage.