Personal Auto
In California, the liability for bodily injury or death to all people is a cumulative liability limit of A $30,000. B $5,000. C $15,000. D $20,000.
A $30,000. Correct! Coverage based on the California Financial Responsibility Liability Limits is $15,000 for liability for bodily injury or death to one person, subject to a cumulative limit of $30,000 for all persons.
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 $50,000 B $105,000 C $25,000 D $30,000
A $50,000 correct! The first limit shown is the most the policy will pay for injuries to any one person. The second limit is the most the policy will pay for all injuries if more than one person is injured in a single accident. The third limit is the most the policy will pay for property damage resulting for a single accident.
Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay? A $60 B $75 C $100 D $45
A $60 correct! The policy Pay $20 per day after 48 hours not to exceed 30 days in total.
Removal coverage under a standard fire policy remains in effect for A 5 days. B 10 days. C 15 days. D 30 days.
A 5 days. Correct! Removal from premises endangered by the perils (fire & lightning) insured against automatically applies for 5 days.
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the following are acceptable forms of financial responsibility EXCEPT A A surety bond for $50,000 obtained from a company licensed to do business in California. B A DMV issued self-insurance certificate. C A motor vehicle liability insurance policy. D A deposit of $35,000 with DMV.
A A surety bond for $50,000 obtained from a company licensed to do business in California. Correct! California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. There are four forms of financial responsibility: 1) A motor vehicle liability insurance policy; 2) A deposit of $35,000 with DMV; 3) A surety bond for $35,000 obtained from a company licensed to do business in California; and 4) A DMV issued self-insurance certificate.
An uninsured motor vehicle includes all of the following EXCEPT A A vehicle being used for public livery. B The accident was a hit-and-run. C The insurance company denies coverage. D The vehicle has no liability bond or insurance enforce.
A A vehicle being used for public livery. Correct! A vehicle being used for public livery is a standard exclusion in uninsured motorist coverage not a category of type of uninsured motor vehicle.
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. correct! Medical payments will pay for accidental bodily injury of an insured, regardless of fault or auto. It will pay medical expense of others occupying the insured auto.
Under a Personal Auto Policy, in which of the following locations would a vehicle primarily garaged in California be covered? A Any other state B Anywhere in the world C Mexico D Only in California
A Any other state Correct! If a covered auto is involved in an auto accident that occurs in any state or Canadian province other that the one in which the auto is principally garaged, the out-of-state coverage will apply.
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 not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair B Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle C Any auto furnished for the insured's regular use, but not named on the policy D Any vehicle while located inside a racing facility for the purpose of racing
A Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair correct! The temporary auto coverage provision allows the personal auto policy to provide coverage for an insured while using any vehicle as a temporary substitute for any other vehicle described in the policy that is out of normal use because of breakdown, repair, or servicing. This coverage does not apply to vehicles not owned by the insured, but furnished for an insured's regular use.
All of the following are eligibility criteria for applicants in the CAARP EXCEPT A Anyone who does not owe money on any automobile insurance policy within the last 18 months. B Can state (via Eligibility Certification Statement on back of application) that they attempted to secure insurance through the voluntary market and were denied coverage is eligible for participation in the program. C The vehicle to be insured must be registered in the state of California. D Anyone who has a valid driver's license.
A Anyone who does not owe money on any automobile insurance policy within the last 18 months. Correct! Anyone who has a valid driver's license, does not owe money on any automobile insurance policy within the last 12 months, and can state (via Eligibility Certification Statement on back of application) that they attempted to secure insurance through the voluntary market and were denied coverage is eligible for participation in the program. The vehicle to be insured must be registered in the state of California.
All of the following are eligibility criteria for applicants in the CAARP EXCEPT A Anyone who does not owe money on any automobile insurance policy within the last 18 months. B Can state (via Eligibility Certification Statement on back of application) that they attempted to secure insurance through the voluntary market and were denied coverage is eligible for participation in the program. C The vehicle to be insured must be registered in the state of California. D Anyone who has a valid driver's license.
A Anyone who does not owe money on any automobile insurance policy within the last 18 months. correct! Anyone who has a valid driver's license, does not owe money on any automobile insurance policy within the last 12 months, and can state (via Eligibility Certification Statement on back of application) that they attempted to secure insurance through the voluntary market and were denied coverage is eligible for participation in the program. The vehicle to be insured must be registered in the state of California.
A personal auto policy would be considered excess when an insured A Leaves his car in a parking garage and the car is involved in an accident. B Buys a car and is then involved in an accident less than 30 days later. C Pays more for collision coverage than the car is worth. D Has another auto policy and the car is involved in an accident.
A Leaves his car in a parking garage and the car is involved in an accident. Correct! The personal auto policy is excess when the insured's car is left at a facility like a parking garage and the car is involved in an accident.
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 Liability coverage B Medical payments C Comprehensive coverage D Collision coverage
A Liability coverage Correct! Supplementary payments, found in Part A - Liability, include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings.
How many vehicles per person can be covered by the California low-cost auto insurance program? A No more than 2 B All the vehicles in the household C Unlimited amount D Only one
A No more than 2 Correct! Every qualified consumer is allowed up to 2 low-cost policies under the program guidelines. If there are two qualified consumers in the household, each can have up to 2 policies for a total of up to 4 per household.
All of the following are TRUE statements regarding the requirements of an insurer to offer earth movement coverage in California EXCEPT A Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement. B No policy of residential property insurance may be issued or delivered or initially renewed in this state by any insurer unless the named insured is offered coverage for loss or damage caused by the peril of earthquake. C Coverage may be provided in the policy of residential property insurance which specifically provides coverage for loss or damage caused only by the peril of earthquake by itself. D Coverage may be provided in the policy of residential property insurance which specifically provides coverage for loss or damage caused by the peril of earthquake alone or in combination with other perils.
A Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement. correct! No additional certificate is required to market earth movement coverage.
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 motorists. C No-fault medical payments. D Liability.
A Physical damage. correct! Subrogation rights do not apply to physical damage coverage if the damage is caused by a person using the auto with a reasonable belief that they were entitled to do so.
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 The driver's policy would be primary. B The driver's policy will act in excess of the passenger's policy. C The passenger's policy would be primary. D Both policies will share equally in the loss.
A The driver's policy would be primary. Correct! Medical payments coverage pays all necessary medical and funeral expenses incurred and services rendered to the insured or passengers in the insured's vehicle, regardless of fault.
Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? A The insured is injured while driving his motorcycle on his resident premises. B The insured's friend is injured in an accident while riding as a passenger in the insured's car. C The insured's mother is injured while exiting from the insured vehicle. D The insured is struck by another vehicle while crossing the street.
A The insured is injured while driving his motorcycle on his resident premises. correct! Coverage does not apply when the insured is occupying a vehicle with fewer than 4 wheels.
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT A The insured is injured while exiting a friend's mobile home. B The insured is injured by a motor vehicle while crossing the street. C The insured's child sustains injuries when the car she is in accidentally rolls down a hill. D A friend is injured while driving the insured's vehicle with permission.
A The insured is injured while exiting a friend's mobile home. Correct! Medical payments only provided coverage to the insured and any passengers in the insured's vehicle. Injuries to other persons are coverage by a PAP liability coverage.
All of the following are true regarding physical damage coverage, EXCEPT A The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle. B Losses to non-owned autos will be covered the same as the broadest coverage available for any covered auto, except non-owned trailers are limited to $1500. C The policy will pay up to $20 per day up to a maximum of $600 for rental transportation. D The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible.
A The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle. Correct! The limit of liability is the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.
In personal auto policies, the term "you" refers to A The named insured. B Any person injured in a covered accident. C Any person reading the policy. D The insurer.
A The named insured. Correct! "You" means the named insured. "We" means the insurance company.
Which of the following is NOT one of the 3 factors set by state law for determining rates and premiums on automobile insurance policies? A The type and model of vehicle. B The insured's driving safety record. C The number of miles he or she drives annually. D The number of years of driving experience the insured has had.
A The type and model of vehicle. correct! California law states that rates and premiums for an automobile insurance policy shall be determined by application of the following factors in decreasing order of importance: (1) The insured's driving safety record; (2) The number of miles he or she drives annually; (3) The number of years of driving experience the insured has had.
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. correct! A personal auto policy does not pay the cost of a release of a vehicle impounded by a law enforcement agency.
When are the limits for uninsured motorist coverage set? A When the coverage is purchased B The limits vary depending on the severity of an accident. C After the first qualifying accident D At the time of the first claim
A When the coverage is purchased Correct! The limits for uninsured motorist coverage are set at the purchase of the policy.
The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured A Will not relieve the insurer of its policy obligations. B Is one of the reasons an insurer can cancel the policy. C Will suspend the physical damage coverage. D Will waive all future premiums.
A Will not relieve the insurer of its policy obligations. Correct! The insurer must provide the coverage stated in the policy.
Which of the following will most likely be the same in a PAP and a motorcycle endorsement? A Medical coverage B Usage C Driving experience D Liability coverage
AMedical coverage correct! While there may be additional limitations placed on coverage for medical payments and uninsured motorists in motorcycle endorsement, they will most likely be similar to those in a personal auto policy.
If a liability policy had split limits of 100/300/100, what is the maximum amount that would be payable in the event of injury to a single person? A $500,000 B $100,000 C $200,000 D $300,000
B $100,000 Correct! The first limit shown, $100,000, is the most the policy will pay for bodily injury to any one person.
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 third 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 Correct! The limit is not more than $5,000 per person per accident.
In California, the liability for bodily injury or death to all people is a cumulative liability limit of A $20,000. B $30,000. C $5,000. D $15,000.
B $30,000. correct! Coverage based on the California Financial Responsibility Liability Limits is $15,000 for liability for bodily injury or death to one person, subject to a cumulative limit of $30,000 for all persons.
In California, the liability for damage to property is limited to A $30,000. B $5,000. C $15,000. D $20,000.
B $5,000. Correct! Coverage based on the California Financial Responsibility Liability Limits is $5,000 for liability for damage to property unless higher limits are required by law.
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 Correct! The first limit shown is the most the policy will pay for injuries to any one person. The second limit is the most the policy will pay for all injuries if more than one person is injured in a single accident. The third limit is the most the policy will pay for property damage resulting for a single accident.
The rate charged for a Good Driver Discount policy should be at least what percent below the rate the insured would otherwise have been charged for the same coverage? A 15% B 20% C 30% D 10%
B 20%
The rate charged for a Good Driver Discount policy should be at least what percent below the rate the insured would otherwise have been charged for the same coverage? A 15% B 20% C 30% D 10%
B 20% correct! The rate charged for a Good Driver Discount policy shall be at least 20% below the rate the insured would otherwise have been charged for the same coverage.
During a house fire, an insured moves an antique chair listed on the policy to a storage unit. In the Standard Fire Policy, how many days will the antique chair be covered at the new location? A 3 days B 5 days C 15 days D 30 days
B 5 days
The standard fire policy specifically excludes losses which occur when a building is vacant or unoccupied for A 30 days or more. B 60 days or more. C 90 days or more. D 180 days or more.
B 60 days or more. Correct! The standard fire policy specifically excludes any loss occurring when the building is vacant or unoccupied for 60 days or more.
Which of the following is NOT a requirement for purchasing a Good Driver Discount policy? A A person has no more than one dismissal of charges in the last 3 years that would have resulted in the imposition of more than one violation point count. B A person must have been licensed to drive a motor vehicle for the previous 5 years. C A person has no more than one violation point count of the Vehicle Code in the last 3 years. D A person has not been in an accident in which he or she was principally at fault, and that resulted in bodily injury or in the death of any person.
B A person must have been licensed to drive a motor vehicle for the previous 5 years. Correct! A person only needs to be licensed to drive a motor vehicle for the previous 3 years.
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the following are acceptable forms of financial responsibility EXCEPT A A deposit of $35,000 with DMV. B A surety bond for $50,000 obtained from a company licensed to do business in California. C A DMV issued self-insurance certificate. D A motor vehicle liability insurance policy.
B A surety bond for $50,000 obtained from a company licensed to do business in California correct! California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. There are four forms of financial responsibility: 1) A motor vehicle liability insurance policy; 2) A deposit of $35,000 with DMV; 3) A surety bond for $35,000 obtained from a company licensed to do business in California; and 4) A DMV issued self-insurance certificate.
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 station wagon that is used personally B A two-ton grain truck with a 6,500-pound capacity C A two-wheeled trailer designed to be towed by the station wagon D A farm pickup with 1,000-pound capacity
B A two-ton grain truck with a 6,500-pound capacity Correct! A two-ton truck weighs 4,000 pounds. With its cargo weight of 6,500 pounds, it exceeds the 10,000-pound gross vehicle weight limit and would not be eligible. The GVW is the maximum recommended weight including the weight of the vehicle, fuel and fluids, passengers, and all cargo.
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 station wagon that is used personally B A two-ton grain truck with a 6,500-pound capacity C A two-wheeled trailer designed to be towed by the station wagon D A farm pickup with 1,000-pound capacity
B A two-ton grain truck with a 6,500-pound capacity correct! A two-ton truck weighs 4,000 pounds. With its cargo weight of 6,500 pounds, it exceeds the 10,000-pound gross vehicle weight limit and would not be eligible. The GVW is the maximum recommended weight including the weight of the vehicle, fuel and fluids, passengers, and all cargo.
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 Correct! Because the personal auto policy provides coverage on both owned and nonowned autos, situations will exist in which two or more policies will apply in a given situation. If the auto is owned and insured by someone other than the operator, then that policy will be primary coverage for that auto, and the operator's insurance would act as excess.
Which of the following would be eligible for the California low-cost auto insurance? A An individual whose vehicle is valued at $25,000 B An individual with a good driving record whose income is at 100% of the federal poverty level C A driver who has no more than 2 points for moving violations for the past 3 years D A low-income driver at the age of 18
B An individual with a good driving record whose income is at 100% of the federal poverty level Correct! The eligibility income level to qualify for the program is set at 250% of the Federal Poverty Level. Drivers must be at least 19 years old and have a good driving record. The insured vehicles cannot be valued higher than $20,000. Moving violations are limited to no more than one point within the past 3 years.
coverage for which of the following vehicles under a personal auto policy? A Any vehicle while located inside a racing facility for the purpose of racing B Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair C Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle D Any auto furnished for the insured's regular use, but not named on the policy
B Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair correct! The temporary auto coverage provision allows the personal auto policy to provide coverage for an insured while using any vehicle as a temporary substitute for any other vehicle described in the policy that is out of normal use because of breakdown, repair, or servicing. This coverage does not apply to vehicles not owned by the insured, but furnished for an insured's regular use.
Which of the following would NOT be covered under the liability section of a personal auto policy? A After a party, the insured causes an accident and is charged with driving under the influence of alcohol. B Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. C A trailer the insured vehicle is towing accidentally comes loose and causes injury to another person. D A friend of your son is using the insured vehicle with the named insured's permission and causes an accident.
B Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. correct! Vehicles with fewer than four wheels are not eligible for coverage under a PAP.
Which of the following is true regarding renewability of a low cost auto insurance policy in California? A It cannot be renewed. B It must be renewed annually. C It must be renewed every 2 years. D It is issued permanently; no renewal is required.
B It must be renewed annually. Correct! Each low cost auto policy is issued for a one-year term, and is renewable annually provided that the insured policyholder continues to meet the eligibility requirements of the program.
All of the following are FALSE regarding eligibility to place business through the CAARP EXCEPT A Low cost automobile insurance is only available through surplus lines broker. B Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications. C Any licensed agents are authorized to accept applications. D Only CAARP-certified agents who have a place of business in the two pilot counties of Los Angeles and San Francisco are eligible.
B Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications. correct! Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications for the low-cost auto insurance policy. There are approximately 7,500 agents and brokers that are CAARP-certified in the two pilot counties of Los Angeles and San Francisco. Review ContentNext Question
All of the following are TRUE regarding the California Automobile Assigned Risk Plan (CAARP) EXCEPT A Administers the state's assigned risk insurance plan for drivers otherwise unable to obtain insurance and is designated by state law as the administrator of the California Low Cost Auto Insurance Program. B The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program. C The Plan assigns drivers to private insurers based upon each company's share of the auto insurance market in the state. D CAARP was created to provide auto insurance for motorists who are unable to obtain coverage in the conventional market due to their driving records or other extraordinary circumstances.
B The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program. correct! The Department of Insurance has regulatory oversight over the program.
Which of the following would be considered the most important factor in determining the rates and premiums for an applicant for an auto policy? A The applicant's zipcode B The applicant's driving record C The number of miles driven annually D The number of years of driving experience
B The applicant's driving record Correct! Rates and premiums for an automobile insurance policy shall be determined by application of the following factors in decreasing order of importance: the insured's driving safety record; the number of miles he or she drives annually; and the number of years of driving experience the insured has had.
Which of the following statements is FALSE regarding the cost of the low cost automobile insurance program? A The costs of annual premium per one car vary by county. B The policy covers one vehicle per household. C There is a 25% surcharge if the person named on the insurance policy is an unmarried male between the ages of 19-24. D There is a 25% surcharge if an unmarried male between the ages of 19-24 lives in the policyholder's household and will be a driver.
B The policy covers one vehicle per household. correct! The costs of annual premium per one car vary by county. There is a 25% surcharge if the person named on the insurance policy is an unmarried male between the ages of 19 and 24, or if an unmarried male between the ages of 19 and 24 lives in the policyholder's household and will be a driver of the insured automobile. Every qualified consumer is allowed up to 2 low-cost policies under the program guidelines. If there are two qualified consumers in the household, each can have up to 2 policies for a total of up to 4 per household.
What type of coverage protects the insured in an accident caused by a driver with insufficient coverage? A Motor vehicle catastrophe coverage B Underinsured motorist C Uninsured motorist D Driver's calamity coverage
B Underinsured motorist Correct! Underinsured motorist coverage protects against damage to the insured or the covered auto when in an accident caused by a driver with insufficient auto insurance coverage.
Any person who claims that he or she meets the criteria based on a driver's license and driving experience acquired anywhere other than in the United States or Canada is presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada and meets the criteria for that period for at least the previous A 12 months. B 36 months. C 18 months. D 24 months.
C 18 months. correct! In addition to meeting the criteria, the insured must have been licensed to drive in the United Sates or Canada for at least the previous 18 months.
With respect to auto insurance, the term owned autos includes all of the following EXCEPT A A pickup or van acquired by the named insured during the policy period. B Any private passenger auto leased to the named insured for a period of more than 6 months. C A pickup or van titled to and used in the named insured's business. D Any private passenger auto titled to the named insured.
C A pickup or van titled to and used in the named insured's business. correct! For eligibility, the personal auto policy will insure as covered autos those vehicles owned by the named insured and not used primarily for a business, other than farming. Vehicles leased to the named insured for periods of 6 months or longer also are classified as owned for insurance purposes.
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 Correct! The policy defines collision as the upset or impact of a covered vehicle with another vehicle or object.
Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have? A Aggregate B Per occurrence C Combined single D Split
C Combined single Correct! Combined single is a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence.
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 Required to post a bond for the amount of damages above his limits. B Considered uninsured. C Considered underinsured. D Not liable for the damages in excess of his limits.
C Considered underinsured. Correct! An underinsured driver has at least the minimums required by law but not enough to cover the damages caused someone else. Underinsured motorist is an optional coverage that can be added to an auto policy. Review ContentNext Question
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 Protect the insured auto from further damage. B Promptly contact the police if the accident was a hit-and-run. C Immediately report to an emergency room for medical examination. D Notify the insurer as soon as possible with a description of the accident.
C Immediately report to an emergency room for medical examination. Correct! The personal auto policy states that the insurer has no duty to provide coverage under the policy if the insured's failure to comply with the duties after an accident or loss results in harm to the insurer.
A personal auto policy would be considered excess when an insured A Pays more for collision coverage than the car is worth. B Has another auto policy and the car is involved in an accident. C Leaves his car in a parking garage and the car is involved in an accident. D Buys a car and is then involved in an accident less than 30 days later.
C Leaves his car in a parking garage and the car is involved in an accident. correct! The personal auto policy is excess when the insured's car is left at a facility like a parking garage and the car is involved in an accident.
Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? A Riot or civil commotion B Towing and labor C Mechanical breakdown D Glass breakage
C Mechanical breakdown Correct! Damage due to wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires is a common exclusion to the physical damage coverage section.
How many vehicles per person can be covered by the California low-cost auto insurance program? A Unlimited amount B Only one C No more than 2 D All the vehicles in the household
C No more than 2 correct! Every qualified consumer is allowed up to 2 low-cost policies under the program guidelines. If there are two qualified consumers in the household, each can have up to 2 policies for a total of up to 4 per household.
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? A Aggregate B Split C Per occurrence D Per person
C Per occurrence Correct! Per occurrence sets the amount for all claims that arise from a single incident at a certain number.
All of the following are true statements regarding coverage limits of low-cost automobile insurance EXCEPT A The bodily injury is subject to a cumulative limit of $20,000. B Optional coverage for medical payments is available for extra charge. C The policy would provide coverage for physical damage. D The policy would provide coverage of $10,000 for liability for bodily injury to one person.
C The policy would provide coverage for physical damage. Correct! Optional Medical Payments and Uninsured Motorist Bodily Injury Coverages are also available, but no Physical Damage Coverage.
Which of the following is NOT one of the 3 factors set by state law for determining rates and premiums on automobile insurance policies? A The number of miles he or she drives annually. B The number of years of driving experience the insured has had. C The type and model of vehicle. D The insured's driving safety record.
C The type and model of vehicle. Correct! California law states that rates and premiums for an automobile insurance policy shall be determined by application of the following factors in decreasing order of importance: (1) The insured's driving safety record; (2) The number of miles he or she drives annually; (3) The number of years of driving experience the insured has had.
What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage? A Calamity motor coverage B Underinsured motorist C Uninsured motorist D Disaster coverage
C Uninsured motorist correct! Uninsured motorist property damage coverage protects against damage to the insured or the covered auto when in an accident caused by an uninsured motorist. The limits for uninsured motorist coverage are set at the purchase of the auto policy. Some states require a deductible each time an auto insurance claim is filed. Review ContentNext Question
When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy? A Physical damage coverage only B No coverage applies automatically C Whatever coverage applied to the vehicle being replaced D Liability coverage only
C Whatever coverage applied to the vehicle being replaced Correct! Collision and other-than-collision for a newly acquired auto begins on the date the insured becomes the owner. For coverage to apply, the company must insure it within 14 days after the insured becomes the owner if the declarations indicate that collision coverage applies to at least one auto covered under the policy. The company must insure it within 4 days after the insured becomes the owner if the declarations do not indicate that collision coverage applies.
An insurer has the right of cancellation/nonrenewal of an existing insurance policy for all of the following EXCEPT A Arbitrary exclusion from coverage due to age of driver and type of vehicle to be insured. B Failure to make premium payments. C Fraudulent misrepresentations of fact in the application process. D Increased risk level based on driving record or accident history.
Correct! Age of driver cannot be used as grounds for cancellation/nonrenewal of an existing policy except by class and cannot be arbitrarily applied to individual drivers.
With respect to auto insurance, the term owned autos includes all of the following EXCEPT A A pickup or van acquired by the named insured during the policy period. B Any private passenger auto leased to the named insured for a period of more than 6 months. C A pickup or van titled to and used in the named insured's business. D Any private passenger auto titled to the named insured.
Correct! For eligibility, the personal auto policy will insure as covered autos those vehicles owned by the named insured and not used primarily for a business, other than farming. Vehicles leased to the named insured for periods of 6 months or longer also are classified as owned for insurance purposes.
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
Correct! Hired automobiles include those that are leased, hired, rented, or borrowed, excluding autos that are owned by employees.
The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as A Electronic Producer Data Procedure (EPDP). B Effective Procedure for Certified Producers (EPCP). C Eligible Electronic Effective Date (EEED). D Electronic Effective Date Procedure (EEDP).
Correct! Only Certified Producers may submit applications to the assigned risk plan and obtain immediate coverage through CAARP's Electronic Effective Date Procedure (EEDP). This procedure allows producers to use their telephone to input coverage data, and is available for both private passenger and commercial risks. Proposed effective dates are only honored if the producer complies with all of the rules governing the Electronic Effective Date Procedure. Review ContentNext Question
Which amount is figured by subtracting depreciation from the replacement cost of a covered item? A Actual cash value B Interest of the insured C Repair cost D Pro rata percentage
Correct! The ACV of a property is the replacement cost of that property minus depreciation.
In California, the liability for bodily injury or death to one person has a financial responsibility liability limit of A $5,000. B $30,000. C $20,000. D $15,000.
D $15,000. Correct! The program provides coverage based on the California Financial Responsibility Liability Limits of $15,000 for liability for bodily injury or death to one person, subject to a cumulative limit of $30,000 for all persons, and $5,000 for liability for damage to property unless higher limits are required by law.
In California, the liability for bodily injury or death to one person has a financial responsibility liability limit of A$5,000. B$30,000. C$20,000. D$15,000.
D $15,000. correct! The program provides coverage based on the California Financial Responsibility Liability Limits of $15,000 for liability for bodily injury or death to one person, subject to a cumulative limit of $30,000 for all persons, and $5,000 for liability for damage to property unless higher limits are required by law.
Transportation expenses are covered under a Personal Auto Policy for A $25 per day, for a maximum of $500. B $50 per day, for a maximum of $500. C $50 per day, for a maximum of $750. D $20 per day, for a maximum of $600.
D $20 per day, for a maximum of $600. Correct! Other than Collision coverage provides $20 a day for up to 30 days following the theft of the entire auto, providing the auto is not recovered within 48 hours.
An insured's auto strikes a deer, causing the insured to lose control of the car and run into a tree. The total damage to the auto is $6,000. How will this loss be covered? A $3,000 would be paid under other-than-collision; $3,000 would be paid under collision coverage. B $6,000 would be paid under collision coverage C This would not be a covered loss. D $6,000 would be paid under other-than-collision coverage.
D $6,000 would be paid under other-than-collision coverage. Correct! Because the proximate cause of the loss was contact with an animal, all of the damage would be paid under other-than-collision coverage.
If a person wants to include a newly-acquired auto in a policy that is already established for another vehicle, the insurer must be notified within A 21 days. B 28 days. C 35 days. D 14 days.
D 14 days. correct! If a car owner wants to include a newly-acquired auto in a current policy, the insurer must be notified within 14 days.
Any person who claims that he or she meets the criteria based on a driver's license and driving experience acquired anywhere other than in the United States or Canada is presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada and meets the criteria for that period for at least the previous A 24 months. B 12 months. C 36 months. D 18 months.
D 18 months. Correct! In addition to meeting the criteria, the insured must have been licensed to drive in the United Sates or Canada for at least the previous 18 months.
Which of the following is NOT a requirement for purchasing a Good Driver Discount policy? A A person has no more than one violation point count of the Vehicle Code in the last 3 years. B A person has not been in an accident in which he or she was principally at fault, and that resulted in bodily injury or in the death of any person. C A person has no more than one dismissal of charges in the last 3 years that would have resulted in the imposition of more than one violation point count. D A person must have been licensed to drive a motor vehicle for the previous 5 years.
D A person must have been licensed to drive a motor vehicle for the previous 5 years. Correct! A person only needs to be licensed to drive a motor vehicle for the previous 3 years.
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 correct! Hired automobiles include those that are leased, hired, rented, or borrowed, excluding autos that are owned by employees.
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 Correct! The temporary auto coverage provision allows the personal auto policy to provide coverage for an insured while using any vehicle as a temporary substitute for any other vehicle described in the policy that is out of normal use because of breakdown, repair, or servicing. This coverage does not apply to vehicles not owned by the insured, but furnished for an insured's regular use.
Which of the following would NOT be covered under the liability section of a personal auto policy? A A trailer the insured vehicle is towing accidentally comes loose and causes injury to another person. B A friend of your son is using the insured vehicle with the named insured's permission and causes an accident. C After a party, the insured causes an accident and is charged with driving under the influence of alcohol. D Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.
D Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. Correct! Vehicles with fewer than four wheels are not eligible for coverage under a PAP.
Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have? A Split B Aggregate C Per occurrence D Combined single
D Combined single correct! Combined single is a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence.
The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as A Electronic Producer Data Procedure (EPDP). B Effective Procedure for Certified Producers (EPCP). C Eligible Electronic Effective Date (EEED). D Electronic Effective Date Procedure (EEDP).
D Electronic Effective Date Procedure (EEDP). correct! Only Certified Producers may submit applications to the assigned risk plan and obtain immediate coverage through CAARP's Electronic Effective Date Procedure (EEDP). This procedure allows producers to use their telephone to input coverage data, and is available for both private passenger and commercial risks. Proposed effective dates are only honored if the producer complies with all of the rules governing the Electronic Effective Date Procedure.
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 Lower limits B The insurer will not pay for out-of-state accidents C Only the limits specified in the policy D Higher limits
D Higher limits Correct! According to the out-of-state coverage provision in PAP, if the state or province has a financial responsibility law specifying limits of liability higher than the limits shown in the Declarations, the insured's policy will provide the higher specified limits.
Extended nonowned coverage endorsement in a PAP broadens which of the following coverages? A Duties after an accident or loss B Uninsured motorists C Physical damage D Liability and medical payments
D Liability and medical payments correct! This endorsement can broaden the liability only, or liability and medical payments coverage provided in the policy for individuals specifically named on the endorsement. It provides coverage for nonowned autos that are available for the regular use of the insured, the use of covered vehicles to carry persons or property for a fee, or use of the vehicle in other businesses (excluding the automobile business).
Which of the following will most likely be the same in a PAP and a motorcycle endorsement? A Usage B Driving experience C Liability coverage D Medical coverage
D Medical coverage Correct! While there may be additional limitations placed on coverage for medical payments and uninsured motorists in motorcycle endorsement, they will most likely be similar to those in a personal auto policy.
All of the following are FALSE regarding eligibility to place business through the CAARP EXCEPT A Any licensed agents are authorized to accept applications. B Only CAARP-certified agents who have a place of business in the two pilot counties of Los Angeles and San Francisco are eligible. C Low cost automobile insurance is only available through surplus lines broker. D Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications.
D Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications. correct! Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications for the low-cost auto insurance policy. There are approximately 7,500 agents and brokers that are CAARP-certified in the two pilot counties of Los Angeles and San Francisco.
The Standard Fire Policy is a named perils contract, which means A It covers losses for any peril. B It covers the peril in its name under any circumstances. C All perils covered must be added through endorsements. D Only perils listed in the policy are covered.
D Only perils listed in the policy are covered. Correct! Named perils contracts cover only those perils specified in the policy
A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid? A Liability B Uninsured motorist C Collision D Other-than-collision
D Other-than-collision Correct! Damage caused by a falling object would be covered under other-than-collision.
Which of the following is included under the physical damage coverage of a personal auto policy? A A covered auto that is seized and destroyed by a government authority B A cellular phone located in a locked vehicle C Custom furnishings or equipment in a pickup or van D Sound reproduction equipment permanently installed in the covered auto
D Sound reproduction equipment permanently installed in the covered auto Correct! Sound reproduction equipment is covered if installed by the manufacturer or installed later where the manufacturer would have installed the equipment.
All of the following are TRUE regarding the California Automobile Assigned Risk Plan (CAARP) EXCEPT A The Plan assigns drivers to private insurers based upon each company's share of the auto insurance market in the state. B CAARP was created to provide auto insurance for motorists who are unable to obtain coverage in the conventional market due to their driving records or other extraordinary circumstances. C Administers the state's assigned risk insurance plan for drivers otherwise unable to obtain insurance and is designated by state law as the administrator of the California Low Cost Auto Insurance Program. D The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program.
D The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program. correct! The Department of Insurance has regulatory oversight over the program.
A driver with 10 years of experience driving an automobile has never had a traffic violation or a DUI. He is now applying for a separate motorcycle policy. He has obtained his motorcycle license 2 years ago. Which of the following is true? A The driver will have to obtain a separate coverage for motorcycles. B The driver will qualify for the Good Driver Discount on a motorcycle. C Motorcycles are automatically included in a personal auto policy. D The Good Driver Discount will not apply to the motorcycle.
D The Good Driver Discount will not apply to the motorcycle. correct! In motorcycle policies or endorsements, "driving experience" means the years licensed to drive a motorcycle, not an automobile. Specialty motorcycle coverage may be offered as a separate policy.
All of the following statements are TRUE regarding the California Earthquake Authority EXCEPT A Authority policies can be marketed by the participating insurer that writes the underlying policy of residential property insurance. B The state of California has created the California Earthquake Authority, which must be administered under the authority of the Commissioner. C The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. D The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage.
D The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage. Correct! The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance; however, they are NOT permitted to sell policies for any other line of insurance coverage. Review ContentNext Question
Which of the following losses would be covered under the property damage liability coverage of a Personal Auto Policy? A A temporary substitute vehicle is damaged while the insured is driving it. B The insured's vehicle is damaged when it collides with a deer. C A passenger in the insured's vehicle is injured following an accident caused by the insured. D The insured damages a rented garage when he failed to stop in time.
D The insured damages a rented garage when he failed to stop in time. Correct! Damage to a nonowned structure would be covered under PD.
Which of the following statements is FALSE regarding the cost of the low cost automobile insurance program? A There is a 25% surcharge if the person named on the insurance policy is an unmarried male between the ages of 19-24. B There is a 25% surcharge if an unmarried male between the ages of 19-24 lives in the policyholder's household and will be a driver. C The costs of annual premium per one car vary by county. D The policy covers one vehicle per household.
D The policy covers one vehicle per household. Correct! The costs of annual premium per one car vary by county. There is a 25% surcharge if the person named on the insurance policy is an unmarried male between the ages of 19 and 24, or if an unmarried male between the ages of 19 and 24 lives in the policyholder's household and will be a driver of the insured automobile. Every qualified consumer is allowed up to 2 low-cost policies under the program guidelines. If there are two qualified consumers in the household, each can have up to 2 policies for a total of up to 4 per household.
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for A Towing coverage. B Comprehensive (other-than-collision) coverage. C Collision coverage. D Uninsured motorists coverage.
D Uninsured motorists coverage. correct! Trailers, while being towed by an insured auto, are covered automatically for BI/PD and U/M under Part A of a personal auto policy.
Which of the following is NOT one of the 3 factors set by state law for determining rates and premiums on automobile insurance policies? AThe type and model of vehicle. BThe insured's driving safety record. CThe number of miles he or she drives annually. DThe number of years of driving experience the insured has had.
correct! California law states that rates and premiums for an automobile insurance policy shall be determined by application of the following factors in decreasing order of importance: (1) The insured's driving safety record; (2) The number of miles he or she drives annually; (3) The number of years of driving experience the insured has had.
