9 UM/UIM Endorsement and State Variations Quiz

The application of two or more underinsured motorists (UIM) coverage limits to a single auto accident because two or more separate policies apply is called Select one: A. Interpolicy stacking. B. Other insurance stacking. C. Intrapolicy stacking.. D. Pro rata stacking.

A. Interpolicy stacking.

Which one of the following describes a rationale for underinsured motorist (UIM) coverage? Select one: A. Many at-fault motorists have insurance that meets the state minimum liability limits but are unable to fully compensate an injured person. B. It provides an insured with an excess layer of liability coverage to protect an insured that causes a catastrophic accident. C. Because UIM payments are taxable, UIM provides a revenue source for the state. D. UIM replaces medical payments coverage for those who cannot afford comprehensive policy packages.

A. Many at-fault motorists have insurance that meets the state minimum liability limits but are unable to fully compensate an injured person. CorrectCorrect. Many at-fault motorists have insurance that meets the state minimum liability limits but are unable to fully compensate an injured person.

In states that apply the damages trigger in underinsured motorists (UIM) coverage situations, the UIM endorsement applies Select one: A. When the negligent driver carries liability limits that are lower than the injured party's actual damages. B. When the negligent driver carries liability limits that are equal to the limits provided by the UIM coverage of the injured party. C. When the negligent driver carries liability limits above the limits provided by the UIM coverage of the injured party. D. When the negligent driver carries liability limits below the limits provided by the UIM coverage of the injured party.

A. When the negligent driver carries liability limits that are lower than the injured party's actual damages.

The application of two or more underinsured motorists (UIM) coverage limits to a single auto accident because a single policy covers more than one vehicle is called Select one: A. Interpolicy stacking. B. Intrapolicy stacking. C. Other insurance stacking. D. Pro rata stacking.

B. Intrapolicy stacking.

The underinsured motorists (UIM) coverage can be added to the Personal Auto Policy (PAP) to provide coverage to the insured when a negligent driver has auto liability limits Select one: A. Supplemented by a personal umbrella policy. B. Equal to or greater than the insured's underinsured limits but not adequate to pay for the injuries caused by the accident. C. That are lower than the limits provided by the underinsured motorists coverage of the insured person. D. That have been cancelled.

C. That are lower than the limits provided by the underinsured motorists coverage of the insured person.

Sammy was driving his automobile insured with an unendorsed Personal Auto Policy (PAP) when he was involved in a collision with another car. The driver of the other car was at fault for the accident. Sammy was severely injured and may be facing lifelong disability and medical bills of several hundred thousand dollars. The only applicable insurance policy for the at-fault driver has liability limits of $10,000 per person and $20,000 per accident. The at-fault driver has no personal assets. From Sammy's perspective, this situation illustrates the benefit of purchasing Select one: A. An excess policy. B. A personal umbrella policy. C. Underinsured motorist (UIM) coverage. D. Uninsured (UM) motorist coverage.

C. Underinsured motorist (UIM) coverage. CorrectCorrect. Underinsured motorist (UIM) coverage is important in situations in which a negligent driver is insured but the policy limits are insufficient to pay the insured's damages

Some states' underinsured motorists (UIM) coverage endorsements contain a "limits trigger." In states that apply the UIM limits trigger, UIM coverage applies when Select one: A. The insured has failed to maintain the minimum limits required for bodily injury liability. B. The insured has failed to acquire medical payments coverage for any injuries received while occupying a motor vehicle. C. The negligent driver carries liability insurance limits that are lower than the injured party's actual damages. D. The negligent driver carries liability limits below the limits provided by the UIM coverage of the injured party.

D. The negligent driver carries liability limits below the limits provided by the UIM coverage of the injured party.

Which one of the following conditions affects which state's uninsured motorists (UM) and underinsured motorists (UIM) insurance laws apply and determines who receives UM/UIM protection and under what circumstances? Whether the single auto policy covers more than one vehicle Whether the insured has a good driving record Where the insured's vehicle is registered or principally garaged Whether the insured lives in an urban area or a rural area

Where the insured's vehicle is registered or principally garaged