P&C CH.5 AUTO POLICY EXAM REVIEW

An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay? A) $60 B) $80 C) $100 D) $120

A) $60

With respect to auto insurance, the term owned autos includes all of the following EXCEPT A) A pickup or van titled to and used in the named insured's business. B) Any private passenger auto titled to the named insured. C) A pickup or van acquired by the named insured during the policy period. D) Any private passenger auto leased to the named insured for a period of more than 6 months.

A) A pickup or van titled to and used in the named insured's business.

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy? A) A two-ton grain truck with a 6,500-pound capacity B) A two-wheeled trailer designed to be towed by the station wagon C) A farm pickup with 1,000-pound capacity D) A station wagon that is used personally

A) A two-ton grain truck with a 6,500-pound capacity

An uninsured motor vehicle includes all of the following EXCEPT A) A vehicle owned and operated by a self-insurer. B) A vehicle which flees a hit-and-run accident. C) A vehicle not covered by an auto insurance policy. D) A vehicle that has no liability bond in force.

A) A vehicle owned and operated by a self-insurer.

In a personal auto policy, the medical payments coverage is similar to A) Accident insurance, because it pays medical expenses regardless of fault. B) Accident insurance, because it has the same limits. C) Bodily injury coverage, because it pays the insured's doctor bills. D) Bodily injury coverage, because it provides legal protection if the insured causes injuries to others.

A) Accident insurance, because it pays medical expenses regardless of fault.

In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? A) First limit B) Second limit C) Third limit D) Combined limit

A) First limit

All of the following are parts of a personal auto policy EXCEPT A) Garage coverage. B) Medical payments coverage. C) Duties after an accident or loss. D) Liability coverage.

A) Garage coverage.

With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT A) Immediately report to an emergency room for medical examination. B) Notify the insurer as soon as possible with a description of the accident. C) Protect the insured auto from further damage. D) Promptly contact the police if the accident was a hit-and-run.

A) Immediately report to an emergency room for medical examination.

Which of the following is NOT included in the definition of an "auto" under a commercial auto policy? A) Mobile equipment B) A land motor vehicle C) A trailer D) A semitrailer

A) Mobile equipment

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT A) Physical damage. B) Uninsured motorist. C) No-fault medical payments. D) Liability.

A) Physical damage.

While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? A) Property damage liability B) Collision coverage C) Other-than-collision coverage D) This loss would not be covered.

A) Property damage liability

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is A) Provided by the insured's policy on an excess basis. B) Not covered. C) Shared on a pro rata basis. D) Provided by the insured's policy on a primary basis.

A) Provided by the insured's policy on an excess basis.

As defined in commercial auto policy forms, mobile equipment includes all of the following types of land vehicles EXCEPT A) Self-propelled vehicles used for snow removal. B) Vehicles that provide mobility to permanently mounted power cranes. C) Vehicles that travel on crawler treads. D) Bulldozers and forklifts.

A) Self-propelled vehicles used for snow removal.

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? A) Symbol 5 B) Symbol 6 C) Symbol 7 D) Symbol 9

A) Symbol 5

Which one of the following symbols used in business auto coverage is correctly described? A) Symbol 9 - nonowned autos only B) Symbol 1 - owned auto only C) Symbol 2 - owned autos subject to no-fault D) Symbol 7 - hired autos only

A) Symbol 9 - nonowned autos only

What is the business auto coverage territory for? A) United States and its territories, Canada, or worldwide for private passenger hired autos B) Only for the specific location of the business C) United States only D) United States and Mexico

A) United States and its territories, Canada, or worldwide for private passenger hired autos

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT A) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. B) Up to $200 a day for loss of earnings due to attendance at hearings or trials. C) Premiums on appeal bonds in any suit the insurer defends. D) Up to $250 for bail bonds required because of a covered accident.

A) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? A) $5,000 minus the policy deductible B) $14,000 C) $15,000 D) $5,000 maximum for the accident

B) $14,000

Transportation expenses are covered under a personal auto policy for A) $50 per day, for a maximum of $750. B) $20 per day, for a maximum of $600. C) $25 per day, for a maximum of $500. D) $50 per day, for a maximum of $500.

B) $20 per day, for a maximum of $600.

What is the amount of deductible that applies to the per accident limit by the Broad Form Products Coverage endorsement in commercial auto policies? A) $100 B) $250 C) $500 D) $750

B) $250

An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A" $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries? A) $30,000 B) $50,000 C) $105,000 D) $25,000

B) $50,000

An automobile that is owned by multiple individuals who are not spouses or otherwise in the same household may be insured under a personal auto policy if A) Separate policies are written for each individual involved. B) A joint ownership coverage endorsement is added. C) A miscellaneous-type vehicle endorsement is added. D) An extended ownership endorsement is added.

B) A joint ownership coverage endorsement is added.

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto? A) A vehicle rented for the insured's personal use B) A vehicle that is titled to another person, but is being used with permission by an insured C) A vehicle leased to the named insured for 12 months by a leasing company D) A vehicle that is titled and insured by the named insured, but is driven principally by the named insured's son, who is resident of the household

B) A vehicle that is titled to another person, but is being used with permission by an insured

The garage coverage form is used to insure A) Owner-operators who use their own trucks to haul property for the motor carriers that hire them. B) Auto businesses, such as auto dealers, service stations, and auto repair shops. C) Businesses that use automobiles to transport property of others or their own property. D) All types of organizations other than auto businesses and motor carriers.

B) Auto businesses, such as auto dealers, service stations, and auto repair shops.

Which endorsement under the commercial auto policy provides the insured's employees additional protection while using a vehicle not owned, hired, or borrowed for the insured business? A) Hired autos B) Employees as insureds C) Drive other car D) Deductibles liability

B) Employees as insureds

An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay? A) Only the limits specified in the policy B) Higher limits C) Lower limits D) The insurer will not pay for out-of-state accidents

B) Higher limits

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? A) Only in California B) In California and any other state C) Anywhere in the world D) Only the U.S. and Mexico

B) In California and any other state

Extended nonowned coverage endorsement in a PAP broadens which of the following coverages? A) Physical damage B) Liability and medical payments C) Transportation expenses D) Uninsured motorists

B) Liability and medical payments

To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form? A) MCS-70 B) MCS-90 C) MCS-80 D) Garage

B) MCS-90

The Broad Form Products Coverage endorsement in commercial auto policies does which of the following? A) Adds property coverage B) Removes the defective products exclusion C) Adds the defective products exclusion D) Removes property coverage

B) Removes the defective products exclusion

A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true? A) The damage occurred when the renovations were done. B) The damage occurred when the concrete fell. C) The renovation contractor is liable. D) The first owner is responsible for the damage.

B) The damage occurred when the concrete fell.

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? A) Both policies will share equally in the loss. B) The driver's policy would be primary. C) The driver's policy will act in excess of the passenger's policy. D) The passenger's policy would be primary.

B) The driver's policy would be primary.

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? A) A passenger in the insured's vehicle is injured following an accident caused by the insured. B) The insured damages a rented garage when he failed to stop in time. C) A temporary substitute vehicle is damaged while the insured is driving it. D) The insured's vehicle is damaged when it collides with a deer.

B) The insured damages a rented garage when he failed to stop in time.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT A) A friend is injured while driving the insured's vehicle with permission. B) The insured is injured while exiting a friend's mobile home. C) The insured is injured by a motor vehicle while crossing the street. D) The insured's child sustains injuries when the car she is in accidentally rolls down a hill.

B) The insured is injured while exiting a friend's mobile home.

The individual named insured endorsement under a commercial auto policy provides coverage for which of the following? A) The sole proprietor of the business and their spouse only B) The sole proprietor of the business and their family members C) The sole proprietor of the business only D) The sole proprietor of the business and their employees

B) The sole proprietor of the business and their family members

If a covered auto is involved in an auto accident in another state, what happens to the limits of policy liability in a personal auto policy? A) They do not apply. B) They adjust to at least the minimum limits of the other state. C) They decrease based on the state law. D) They do not change.

B) They adjust to at least the minimum limits of the other state.

A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil and certain categories of hazardous waste? A) $500,000 B) $750,000 C) $1 million D) $5 million

C) $1 million

What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy? A) $250 B) $500 C) $1,000 D) $2,000

C) $1,000

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? A) $6,000 would be paid under collision coverage. B) This would not be a covered loss. C) $6,000 would be paid under other-than-collision coverage. D) $3,000 would be paid under other-than-collision; $3,000 would be paid under collision coverage.

C) $6,000 would be paid under other-than-collision coverage.

A tow truck was stolen from the insured's premises. The insured has loss of use coverage on his commercial auto policy. How much will the insured be able to collect from the coverage if unable to use the town truck in its operations for 40 days? A) $200 B) $400 C) $600 D) $800

C) $600

According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry for the transportation of nonhazardous property? A) $250,000 B) $500,000 C) $750,000 D) $1 million

C) $750,000

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? A) 90 days B) 1 year C) 3 years D) 5 years

C) 3 years

In the event of theft of a covered vehicle, transportation expenses coverage in a personal auto policy will cover the expenses starting how many hours after theft? A) Immediately B) 24 hours C) 48 hours D) 72 hours

C) 48 hours

Which of the following would be considered an uninsured vehicle? A) A government owned vehicle B) A vehicle operated by an insured's family member C) A vehicle fleeing a hit-and-run accident D) A vehicle owned by a self-insurer

C) A vehicle fleeing a hit-and-run accident

Which of the following would be considered an insured under a business auto coverage form? A) Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business B) A partner of the named insured for any covered auto owned by that person or a member of their household C) Anyone while using a covered auto owned by the named insured with permission D) The owner or anyone else from whom the named insured hires or borrows a covered auto

C) Anyone while using a covered auto owned by the named insured with permission

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile? A) Property damage liability coverage B) Comprehensive coverage C) Collision D) Other-than-collision

C) Collision

In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn? A) Loss of use B) Specified C) Comprehensive D) Blanket

C) Comprehensive

In which of the following sections of a commercial auto policy will you find specific information about the policy period? A) Selected endorsements B) Definitions C) Conditions D) Additional coverages

C) Conditions

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? A) Comprehensive coverage B) Collision coverage C) Liability coverage D) Medical payments

C) Liability coverage

A common exclusion found under physical damage to your auto includes A) Riot or civil commotion. B) Towing and labor. C) Mechanical breakdown. D) Glass breakage.

C) Mechanical breakdown.

A private passenger auto operated by the named insured that is not titled to the insurer and that is borrowed from an employee or partner is considered a(n) A) Temporary substitute. B) Owned vehicle. C) Nonowned auto. D) Hired auto.

C) Nonowned auto.

Rental Reimbursement is only available if the policy includes which coverage? A) Towing and Labor Costs B) Named Nonowner Coverage C) Other Than Collision Coverage D) Extended Nonowned Coverage for Named Insured

C) Other Than Collision Coverage

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is A) Shared on a pro rata basis. B) Provided by the insured's policy on a primary basis. C) Provided by the insured's policy on an excess basis. D) Not covered.

C) Provided by the insured's policy on an excess basis.

Which of the following is covered under the physical damage coverage of a personal auto policy? A) A cellular phone in a locked vehicle B) Custom furnishings or equipment in a pick up or van exceeding coverage of $1,500 C) Sound reproduction equipment permanently installed in the covered auto D) A covered auto seized and destroyed by a government authority

C) Sound reproduction equipment permanently installed in the covered auto

The insured rented a car while her regular vehicle was being repaired after an accident. The rented car is considered a A) Nonowned vehicle. B) Hired vehicle. C) Temporary substitute. D) Covered auto.

C) Temporary substitute.

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? A) The insured's vehicle is damaged when it collides with a deer. B) A passenger in the insured's vehicle is injured following an accident caused by the insured. C) The insured damages a rented garage when he failed to stop in time. D) A temporary substitute vehicle is damaged while the insured is driving it.

C) The insured damages a rented garage when he failed to stop in time.

In personal auto policies, the term "you" refers to A) Any person reading the policy. B) The insurer. C) The named insured. D) Any person injured in a covered accident.

C) The named insured.

Under the business auto coverage form, mobile equipment is covered for liability insurance A) When listed on the declarations. B) When coverage is written as Symbol 1. C) When being carried or towed by a covered auto. D) On an excess basis.

C) When being carried or towed by a covered auto.

The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured A) Will suspend the physical damage coverage. B) Will waive all future premiums. C) Will not relieve the insurer of its policy obligations. D) Is one of the reasons an insurer can cancel the policy.

C) Will not relieve the insurer of its policy obligations.

Which of the following would NOT qualify as a hired auto? A) An auto hired by an employer B) An auto leased from a commercial rental company C) An auto rented for personal use D) An auto borrowed from an employee

D) An auto borrowed from an employee

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? A) Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle B) Any auto furnished for the insured's regular use, but not named on the policy C) Any vehicle while located inside a racing facility for the purpose of racing D) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

D) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

Which of the following would NOT be covered under the liability section of a personal auto policy? A) Property damage caused by a trailer detaching from an insured vehicle B) Bodily injury resulting from an accident while a person other than the named insured is operating the vehicle C) Property damage to a store front while the insured driver is under the influence D) Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle

D) Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is A) Not liable for the damages in excess of his limits. B) Required to post a bond for the amount of damages above his limits. C) Considered uninsured. D) Considered underinsured.

D) Considered underinsured

The designation symbols used in commercial auto policies can be found in which policy section? A) Liability Coverage B) Definitions C) Conditions D) Covered Auto

D) Covered Auto

Which of the following is the federal body that regulates truckers who travel across state lines? A) Motor Carriers Commerce Agency B) Truckers and Trade Commission C) Federal Trade Commission D) Federal Motor Carrier Safety Administration

D) Federal Motor Carrier Safety Administration

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? A) Drive other car B) Additional insured - lessor C) Hired autos specified as covered autos you own D) Individual named insured

D) Individual named insured

Which of the following would be covered under the Garage Liability Coverage Form? A) Product recalls B) Fellow employees C) Loss of use D) Insured's business premises

D) Insured's business premises

An insured is driving her automobile and strikes a large pothole that causes a flat tire. Which coverage of the insured's personal auto policy will pay for the repair? A) Comprehensive B) Collision C) Transportation expenses D) Loss is not covered.

D) Loss is not covered.

Which of the following personal auto coverages would apply for damage caused by a bird hitting the windshield? A) Property damage coverage B) Uninsured motorist coverage C) Collision coverage D) Other-than-collision coverage

D) Other-than-collision coverage

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? A) The insured's friend is injured in an accident while riding as a passenger in the insured's car. B) The insured's mother is injured while exiting from the insured vehicle. C) The insured is struck by another vehicle while crossing the street. D) The insured is injured while driving his motorcycle on his resident premises.

D) The insured is injured while driving his motorcycle on his resident premises. B/C coverage does not apply if its less than 4 wheels

Who is NOT an insured for liability on a BAP? A) Anyone using a covered auto with permission B) Anyone liable for the conduct of the insured C) The named insured in any covered auto D) The owner of a car the insured borrows

D) The owner of a car the insured borrows

When would uninsured motorist coverage apply? A) When the insured drives an uninsured vehicle B) When the insured is legally liable, but does not have sufficient coverage C) When the insured is legally liable D) When the other party is legally liable but has no insurance

D) When the other party is legally liable but has no insurance