Auto Policies
What is NOT considered to be a covered auto under a personal auto policy? Taxi Temporary Substitute Auto Trailer owned by the insured Auto listed in the declarations
A commercial vehicle used to carry people for a fee is excluded from a personal auto policy.
The insured has just dropped the collision coverage on his car. He lends the car to his daughter who does not own a car. She hits a tree. What statement is true?
There is no coverage There is not a grace period in the automobile policy. If you cancel the coverage today, it is deleted at the time you requested it.
What would NOT be considered a type of collision loss?
While on a trip the driver hits a moose. By definition, impact with an animal is considered a comprehensive loss.
Is any kind of property (other than the auto itself) covered under the physical damage section of the personal auto policy?
Yes, it covers all standard tools for auto repair The standard tools necessary for the auto such as the tire jack would be covered under the physical damage section of the auto policy.
Who is NOT considered insured as a family member under the PAP? Your uncle who just moved in Your nephew who lives in another town Your daughter who lives with you Your step son who lives with you
Your nephew who lives in another town Your nephew is related to you, but is not a family member since he does not live with you.
PAP policies will conform to the financial responsibility laws in a state you may be driving in. This part of the policy is called
Out of state coverage An auto policy contains the "out of state" coverage clause, which allows the policy to expand to meet the financial responsibility laws of the state you are driving in.
Liability coverage for mobile equipment while in transit on the road is available on which policy form?
PAP Liability for equipment is normally covered by the Commercial General Liability policy, except while on a roadway or being transported or towed by a covered auto.
What is included in transportation expenses? Is it included or not?
There is no addition to limits and no deductible. Covers $20 per day, up to a maximum of $600. The limits begin after an auto or non-owned auto is withdrawn from use for 24 hrs. If the car is STOLEN coverage begins within 48hrs
Fred has a personal auto policy with $100,000 bodily injury liability and $50,000 property damage liability limits. He borrows George's car and strikes a pedestrian. George also has $100,000 limit of bodily injury liability. How much will Fred's insurer pay if a $150,000 judgment is rendered against Fred?
$50,000
If Jim has $100,000 liability coverage under his personal auto policy, how much would the insurer have to pay if the courts awarded a claimant $125,000, the costs of defense was $3,000, and Jim had to take two days off from his job, which cost him $200?
$103,200 Supplementary payments cover up to $200 a day for lost wages while the insured is helping the insurer defend in court. The liability coverage would be payable up to the policy limits. The cost of defense on an Auto policy is not a supplementary payment. The cost of defense is part of the insuring agreement, and is in addition to the limits.
Tom owns a personal auto policy with limits of 100/300/50. He is responsible for injuring two individuals, Bob and Ray, in a collision. Bob suffers $45,000 and Ray suffers $105,000 in bodily injury damages. What will Tom's auto policy pay?
$145,000 + defense costs Ray will receive only $100,000 from Tom's insurer, due to the $100,000 per person limit. Therefore: $45,000 + $100,000 = $145,000, and all defense costs will be paid.
Supplementary payments provided by a personal auto policy include the cost of bail bonds up to
$250
Benjamin carries an automobile policy with Company A that has a single limit of $50,000. He borrows an auto from a neighbor who carries an automobile policy with Company B that has a single limit of $100,000. While driving the borrowed auto, Benjamin is involved in an at-fault accident in which a judgment of $125,000 is rendered against him. The loss will be paid in what way (Company A/Company B)?
$25K/$100K Insurance always "follows the car," meaning the policy listing the auto involved in the accident is primary. Company B is primary and will pay up to its limit, $100,000. When the primary coverage is exhausted, the driver's own auto coverage comes into play on an excess basis. Therefore, Company A pays $25,000 and Company B pays $100,000.
An insured has an automobile policy with a COMBINED single limit of $500,000 for bodily injury and property damage. After an accident, a court awards $300,000 for bodily injury and $25,000 for property damage to claimant #1, and $200,000 for bodily injury and $25,000 for property damage to claimant #2. In this situation, the insurance company's limit for liability is
$500,000
An insured has an automobile policy with a combined single limit of $500,000 for bodily injury and property damage. After an accident, a court awards $300,000 for bodily injury and $25,000 for property damage to claimant #1, and $200,000 for bodily injury and $25,000 for property damage to claimant #2. In this situation, the insurance company's limit for liability is
$500,000 is the insurer's limit. A combined single limit is the maximum that would be paid in any one accident for all bodily injury and property damage. Since the total liability is $550,000, the $500,000 limit is paid.
Transporting goods or people for a fee is known as a livery service. The Motor Carrier Act of 1980 would require insurance in the amount of _________________ in order to be properly covered.
1 million
Mary has a Personal Auto Policy (PAP), with Part A limits of $100,000 / $300,000. She borrows her neighbor's pick-up one day to run an errand, and while using it, accidently strikes a pedestrian causing injury. Her neighbor, Art, also has a PAP policy with Part A limits of $250,000 / $500,000. How much will Mary's policy pay for a $300,000 judgment against her?
ART's POLICY GOES FIRST 300k-250k=50k
The personal auto policy covers what persons under the medical payments section?
All occupants of the insured auto
For what would there be coverage under the "medical payments" section of the personal auto policy? The insured jumps off the truck hurting his ankle The insured drops the hood on his hand The insured changes a tire and the car falls on him All the choices
All the choices Medical payments are made to the insured as long as he is "occupying" an auto or struck as a pedestrian by an auto.
PAP policies will conform to the financial responsibility laws in a state you may be driving in. This part of the policy is called
An auto policy contains the "out of state" coverage clause, which allows the policy to expand to meet the financial responsibility laws of the state you are driving in.
The limits for BI or PD on a liability insurance policy
Are used to pay for the claimants compensatory damages
What automobile coverage must be written on a policy? Collision coverage Other than collision BI and PD Uninsured motorist coverage
BI & PD must be written on the policy under the liability section; the other coverages are optional and cannot be the only coverage written on the policy.
Liability coverage for mobile equipment while in transit ON THE ROAD is available on which policy form?
Business Auto Policy Liability for equipment is normally covered by the Commercial General Liability policy, except while on a roadway or being transported or towed by a covered auto.
Liability coverage for mobile equipment NOT in transit is available on which policy form?
Commercial General Liability
An auto policy with a $500 deductible applies to
Each physical damage loss A deductible is applied to physical damage to the insured auto only, not property damage liability or bodily injury liability.
The insured's neighbor has an uninsured vehicle, which he seldom uses. He gives the insured the keys and advises him to use it whenever he wishes. Under what circumstance is this a covered auto under the insured's PAP policy? The insured
Goes to pick up a new car battery because his car has a dead one A non-owned automobile is covered only if it is used as a temporary substitute because your car is not useable due to service, repair, breakdown or destruction.
What does uninsured motorist coverage do and what is included?
If someone chooses to purchase it, the amount of coverage cannot exceed the limit for bodily injury liability, and underinsured motorist coverage comes automatically.
What does the liability section NOT cover on an auto policy?
It does NOT cover named insured or spouse, or family members who reside with the named insured, for personal bodily injury.
As an agent, what type of automobile insurance would you recommend as the most important?
Liability
A deductible is applied to physical damage to the insured auto only, not property damage liability or bodily injury liability. Sickness Loss of use Death Bodily Harm
Loss of use is included within the definition of property damage, not bodily injury.
Make sure when the question asks if the incident is covered under the "medical payments" section of the PAP
MAKE SURE IT TALKS ABOUT A CAR
In automobile insurance, additional (supplementary) payments refer to
Payment of bail and appeal bonds and accrued interest on judgements Supplementary payments are made in addition to the limits of bodily injury and property damage shown on the "declarations" page. Such things as bail bonds up to $250, loss of earnings up to $200 and pre-judgment and post-judgment interest are included.
Which of the following would be considered a non-owned vehicle using the PAP definition of a Covered Auto, under Part D, Physical Damage?
Pick-up you rent while your van is in the shop Temporary replacement vehicles are covered for liability and physical damage if your vehicle is out of service.
What loss would NOT be covered under a policy providing automobile comprehensive physical damage? Car runs over a log, causing a flat tire Dog locked in car chews seats All choices Theft of tires from car
Road hazards that due damage to tires, are not covered under the comprehensive section of the auto policy.
Jumbo's Market ceases to operate for a week after its electricity is shut off due to a station wagon striking the transformer supplying electrical current to it. What would be covered by the auto policy covering the station wagon?
Spoiled meat in the market's refrigerator Only spoiled meat in the market's walk-in refrigeration unit is directly related, by proximate cause, to the damage arising from the auto accident.
The commercial auto policy can be very restrictive on the types of vehicles covered, based on the numeric symbol used in the policy. If the owner of a business would like to be covered for the personal use of non-owned autos, he needs to buy what endorsement?
The "drive other car" endorsement to the commercial auto policy will now allow the insured to be covered on anybody's car driven for personal use.
Transportation expenses are an additional coverage under the PAP. What is true
The coverage will not pay the cost of a rental car
At what time are automobile policies in effect?
The effective TIME of insurance is always 12:01a.m. at the stated address of the named insured. See the declarations page for this time and the effective date of coverage.
The insured has a personal auto policy. He drives his covered van in a share-in-the-expense carpool. What is correct?
The personal auto policy does not exclude coverage for people sharing expenses while carpooling. If the insured was charging a fee for the car pooling, then it would be excluded.
What would NOT be covered under a personal auto policy, physical damage section, comprehensive coverage? Theft of portable radio left on the seat Theft of spare tire from the trunk Theft of radio mounted on the dash Theft of hood ornament
Theft of portable radio left on the seat Personal items left in the vehicle would have to be covered under the homeowners coverage. Remember, the item must be permanently attached to the vehicle for the auto policy to cover it.