Ch. 10 Commercial Auto Coverage - Random Questions 1 - MI P&C Licensing
Which Business Auto Symbol is the most broad of all Symbols? A. Symbol 2 B. Symbol 4 C. Symbol 1 D. Symbol 3
C. Symbol 1 Symbol 1 includes any auto, whether owned or not by the insured if it is used in the insured business. 10.2
Which of the following is not a specified loss under the garagekeepers section of the Garage Coverage Forms? A. Vandalism B. Theft C. Windstorm D. Fire
C. Windstorm While windstorm is a covered peril under the specified causes of loss of the BAP, under Section III (garagekeepers coverage) the Garage policy these causes of loss include only fire, lightning, explosion, theft, mischief, and vandalism. 10.7
After an employee of a service station failed to tighten the oil filter, the leaking oil caused $700 in damage to the engine. Section II of a Garage Coverage Form would pay: A. $700 less the $100 mandatory deductible B. $700 only if the employee is proven negligent C. Nothing D. $700 less the $250 mandatory deductible
A. $700 less the $100 mandatory deductible A $100 deductible applies to all losses resulting from property damage to an auto as a result of work performed on that auto by the insured. 10.7
Which of the following autos is covered under Symbol 9 of the Business Auto Coverage Form? A. An auto owned by the insured's employee while used in the insured's business B. An auto leased or hired by the insured C. An auto borrowed by the insured D. Any auto not used in the insured's business
A. An auto owned by the insured's employee while used in the insured's business Non-owned Autos Only Coverage, Symbol 9, provides coverage for only those autos the insured does not own, lease, hire, rent or borrow, which are used in connection with the insured's business. This includes autos owned by the employees or members of their household. 10.2
The Garage Coverage Form may be written for all of the following, except: A. Car rental agency B. Public parking garage C. Car dealership D. Service station
A. Car rental agency A car rental agency would not be eligible under this form, which is intended for businesses that sell, service, or store automobiles. 10.7
The Garage Coverage Form may be written for all of the following, except: A. Car rental agency B. Service station C. Public parking garage D. Car dealership
A. Car rental agency A car rental agency would not be eligible under this form, which is intended for businesses that sell, service, or store automobiles. 10.7
What is the name for insurance covering the amount an insured is legally obligated to pay for loss to a customer's vehicle in the insured's care? A. Garagekeepers coverage B. Garage product liability C. Business auto coverage D. Garage coverage form
A. Garagekeepers coverage Garagekeepers coverage pays for loss or damage to a customer's vehicle and equipment while in the insured's care for servicing, repair, parking, or storing. 10.7
Which would be covered under the Business Auto Coverage Form? A. A vehicle repaired for others B. A borrowed truck used in the insured's business C. A trailer stored for another person D. Dealer inventory
B. A borrowed truck used in the insured's business The BAP covers owned, leased, hired, rented, or borrowed cars, trucks, trailers, and semitrailers owned and used by a business. 10.1
Which coverage is not available under the Garage Coverage Form? A. Physical damage coverage B. Advertising liability C. Product liability D. Garagekeepers coverage
B. Advertising liability Other provided coverages include premises liability and auto liability. 10.7
A business individual that carries people and property belonging to the general public for a fee from one place to another is called which of the following? A. Contract carrier B. Common carrier C. Livery carrier D. Motor carrier
B. Common carrier A common carrier is a business, individual, or organization that carries persons or property for a fee, from one place to another. The persons or property being transported are, or belong to, the general public. A trucker is a common carrier and may transport goods belonging to several customers at the same time. 10.9
BAP liability coverage would not apply to which of the following? A. Bodily injury after a person is struck by a mechanical device attached to a covered truck B. Damage to property in the insured's care C. Injury to another while driving in another state D. Bail bonds required after an insured's accident
B. Damage to property in the insured's care Damage to property in the insured's care, custody, or control is excluded under the BAP. 10.3
Section II of the Garage Coverage Form does not cover: A. Premise and operations liability B. Damage to the customer's car in the insured's care C. Completed operations liability D. Products liability
B. Damage to the customer's car in the insured's care Section II (Liability) Coverage does not cover vehicles in the insured's care, custody or control. Section III (Garagekeepers Coverage) provides this coverage. 10.7
For which of the following persons is the Drive Other Car endorsement intended? A. Owners of school buses B. Individuals who do not own an auto C. Truckers and motor carriers D. The officers and directors of a corporation
B. Individuals who do not own an auto The Drive Other Car endorsement may be added to any of the business auto coverage forms and is designed for individuals who do not personally own and insure an auto.
All of the following regarding the Garage Coverage Form are correct, except: A. It provides automobile liability, physical damage, and general liability insurance for auto businesses B. It provides coverage for product recall C. It provides physical damage coverage for covered autos the named insured owns, hires, rents, leases, or borrows D. Coverage is typically written using a blanket limit of insurance
B. It provides coverage for product recall The Garage policy does not cover property in the care and custody of the insured, injuries covered by Workers' Compensation, and liability arising from pollution or product recall. 10.7
The deregulation of the trucking industry was accomplished through which 1980 regulation? A. Motor Carrier Public Liability Act B. Motor Carrier Act C. Trailer Interchange Act D. Trucking Reform Act
B. Motor Carrier Act This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000, depending on the type of merchandise transported. 10.10
The Garagekeepers Coverage of the Garage Coverage Form covers the liability of: A. Product liability exposures B. Physical damage to a customer's car that is in the care and custody of an insured C. Damage to autos held for sale D. Owned vehicles that are used in the business
B. Physical damage to a customer's car that is in the care and custody of an insured Garagekeepers coverage provides insurance for amounts the insured is legally obligated to pay for loss or damage to a customer's vehicle in the insured's care for servicing, repair, parking, or storing. 10.7
Section II (Liability) of the Garage Coverage Form covers which of the following? A. Injuries covered by Workers' Compensation B. Property damage for which the insured is legally responsible C. Injuries to an employee that are caused by a fellow employee D. Property in the care and custody of the insured
B. Property damage for which the insured is legally responsible Section II covers property damage liability for which the insured is legally responsible. 10.7
A firm that transports goods of others, rather than its own goods, would purchase a: A. Truckers Liability Coverage B. Truckers Coverage Form C. Specified Peril Policy D. Non-Owned Good Policy
B. Truckers Coverage Form A Truckers Coverage Form is designed for common and contract carriers hauling the goods of others. 10.9
Which type of Commercial Auto policy would be best suited for a parking garage business? A. Business Auto Coverage Form B. Motor Carrier Coverage Form C. Garage Coverage Form D. Truckers Coverage Form
C. Garage Coverage Form The Garage Coverage Form is designed to provide coverage for businesses engaged in the sale, service, parking, or storage of automobiles. Eligible businesses include automobile vehicle dealerships, sales agencies, repair shops, service stations, storage garages, and public parking places. 10.7
How is lost or damaged property valued under the BAP? A. Lesser of the replacement cost and the ACV B. Greater of the cost to repair and the replacement cost C. Lesser of ACV. or the cost to repair or replace D. Greater of the ACV or the cost to repair or replace with like kind
C. Lesser of ACV. or the cost to repair or replace The most the insurer will pay for damaged or stolen property in any one accident, is the lesser of the ACV or the cost of repairing or replacing with property of like kind and quality. 10.4
Which of the business auto coverage forms provides insurance for a contract carrier that transports its own goods in addition to the goods owned by others? A. Business Auto Coverage Form B. Truckers Coverage Form C. Motor Carrier Coverage Form D. Garage Coverage Form
C. Motor Carrier Coverage Form The Motor Carrier Coverage Form provides coverage for contract carriers for the transportation of goods, for hire, that are owned by others and transporting their own property. 10.9
Mobile equipment does not include which of the following? A. Farm machinery designed for off-road use B. Vehicles that travel on crawler treads C. Motor vehicles designed for road use D. Resurfacing equipment mounted on a vehicle
C. Motor vehicles designed for road use Mobile equipment does not include vehicles designed for road use. 10.6
Which vehicle would not be eligible for a Business Auto Coverage Form? A. A trailer that is used to carry a backhoe B. A private passenger auto that is used in the business C. A van that is used by a delivery firm D. A forklift used in the business
D. A forklift used in the business Being mobile equipment, a forklift is not eligible for auto coverage, other than by endorsement. 10.1
Which of the following would not be eligible for coverage under the Business Auto Coverage Form? A. A private passenger automobile owned by the insured and used in the insured's business B. A tractor-trailer used in the insured's business C. The insured for an employee's use of a personal auto in the insured's business D. An employee injured using the employee's personal auto in insured's business
D. An employee injured using the employee's personal auto in insured's business Although the Non-owned Autos Only coverage covers the insured for the use of employee's cars in the insured's business, it does not cover injuries to the employee (these would be covered under a Workers' Compensation policy). 10.1
All of the following are sections of the Garage Coverage Form, except: A. Physical Damage Insurance B. Liability Insurance C. Garagekeepers Insurance D. Comprehensive Insurance
D. Comprehensive Insurance Comprehensive coverage is part of the Physical Damage coverage provided by Section IV. 10.7
Section III of the Garage Coverage Form provides which coverage? A. Liability for garage operations B. Liability for owned vehicles that are used in the business C. Products liability D. Garagekeepers coverage
D. Garagekeepers coverage Section III provides insurance for amounts the insured is legally obligated to pay for loss or damage to a customer's vehicle and/or equipment while it's in the insured's care for servicing, repair, parking, or storing--otherwise known as garagekeepers coverage. 10.7
All of the following are true of the Business Auto Coverage Form, except: A. It does not include contractual liability coverage B. It provides no-fault coverage in states that require it C. It covers liability from mobile equipment while being towed D. It covers injuries to employees
D. It covers injuries to employees Injuries to employees would be covered under Workers' Compensation. 10.3
Which of the following businesses would not be eligible for coverage under the Garage Coverage Form? A. Public parking lot B. Car dealer C. Service station D. Rental car agency
D. Rental car agency The Garage Coverage Form provides automobile liability and physical damage coverage, as well as General Liability Protection for businesses in the sale, service, or storage of automobiles. 10.7
Physical damage coverage under a Business Auto Coverage Form includes all of the following, except: A. Specified Causes of Loss B. Collision Coverage C. Comprehensive Coverage D. Uninsured Motorist Coverage
D. Uninsured Motorist Coverage The three types of physical damage coverage under the BAP are collision, comprehensive, and specified perils. Uninsured Motorist is a separate coverage added by endorsement. 10.4
All of the following are true of the Business Auto Coverage Form, except: A. Coverage is primary on owned autos and excess on non-owned autos B. Coverage may be written on owned private passenger autos C. Medical payments coverage may be added by endorsement D. Uninsured Motorist Coverage is included in Section II
D. Uninsured Motorist Coverage is included in Section II Section II of the BAP provides liability coverage. Uninsured Motorist coverage is provide by optional endorsement. 10.3
