Auto Prep #2

Jason has a personal auto policy with $250 deductible collision coverage and $100 deductible other than collision coverage. He runs a stop sign and hits another car. There is $1,300 worth of damage to his (the insureds) car. How much will the insurer pay for the damage to Jason's car? A. $1,050 B. $1,200 C. $950 D. Nothing, since the accident was Jason's fault

A. $1,050 This loss is a collision claim. The $1,300 loss is subject to a deductible of $250. $1,300.-$250= $1050.00

With endorsement tapes, CDs, cassettes and other media would be covered for: A. $200 B. The amount scheduled on the endorsement C. $500 D. $1,000

A. $200 With endorsement tapes, CDs, cassettes and other media would be covered for $200

Which of the following is NOT a supplementary payment under coverage A of a Personal Auto Policy? A. $500 a month loss of income B. $200 a day loss of earnings C. $250 maximum for bail bonds D. Post-judgement interest Loss of income or earnings is paid to a damaged party at up to $200 per day. It could be $50 per day or $100 per day but the max is $200 per day

A. $500 a month loss of income Loss of income or earnings is paid to a damaged party at up to $200 per day. It could be $50 per day or $100 per day but the max is $200 per day

A car is insured using a personal auto policy. The car is damaged by hail. The loss is: A. Covered as other than collision loss B. Excluded because of the uninsurable catastrophic potential damage by hail C. Covered as a collision loss D. Covered only if the car was in a garage or shelter at the time of the hail

A. Covered as other than collision loss This is covered by Comp.

Which type of coverage is needed to cover how much you owe on a vehicle and how much the actual cash value is worth? A. Gap Coverage B. New Auto Coverage C. P & I (protection and indemnity) D. Liability Coverage

A. Gap Coverage

Which of the following is NOT covered under collision coverage? A. Impact with an animal. B. Impact with another vehicle. C. Impact with another flying object (wall, tree, pole, etc.). D. Upset (flipping the vehicle over).

A. Impact with an animal. This would be considered a comprehensive loss.

The Medical Payments Coverage in a PAP 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 infant daughter sustains injuries when the car she is occupying 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. Mobile home does not meet the definition of a covered auto. This would be classified as a premises exposure.

What is the purpose of Named Non owner Coverage? A. This endorsement is for people who don't own a vehicle but still drive (rented, public transportation, company vehicle, etc.) B. This endorsement allows non-owned vehicles furnished for the insureds regular use (company car). C. This endorsement allows the PAP to cover vehicles such as motorcycles, Atvs, dune buggies, and motor homes. D. This endorsement covers expenses incurred in the event of a total theft.

A. This endorsement is for people who don't own a vehicle but still drive (rented, public transportation, company vehicle, etc.)

The limited Mexico endorsement applies to trips to Mexico with a duration of: A. 7 days or less B. 10 days or less C. 2 days or less D. 14 days or less Mexico Coverage Endorsement covers accidents that occur in Mexico within 25 miles of the United States border. It applies only when the insured will be in Mexico for 10 days or less

B. 10 days or less Mexico Coverage Endorsement covers accidents that occur in Mexico within 25 miles of the United States border. It applies only when the insured will be in Mexico for 10 days or less

The rate for a Good Driver Discount policy shall be at least _________ 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 shall be at least 20% below the rate the insured would otherwise have been charged for the same coverage.

Under a personal auto policy, what qualifies as an insured while using a covered auto? A. Only the named insured and resident relatives B. Any person C. Only the named insured, resident relatives, and other entities responsible for the use of the auto D. Only the named insured, resident relatives, and passengers

B. Any person Any person driving an insured vehicle qualifies as an insured while using that covered auto.

Who is eligible for Low Cost Auto Insurance Program? A. Low-income California residents in San Francisco and Los Angeles counties with good driving records. B. Low-income residents of California. C. Low-income residents of any state in the U.S. D. Low-income California residents who have filed bankruptcy within the last 5 years.

B. Low-income residents of California. The California Low Cost Automobile Insurance Program is now available statewide. Eligibility is based on the household's gross annual income.

What endorsement can be used to insure a motorcycle under a personal auto policy? A. Named non-owner coverage endorsement B. Miscellaneous type vehicle endorsement C. No endorsement is available to broaden a PAP to cover motorcycles D. No endorsement is needed; the unendorsed PAP covers motorcycles

B. Miscellaneous type vehicle endorsement Misc type vehicle endorsement may be used instead of a stand alone policy, but with limitations.

Which of the following losses would be covered under Jason's personal auto policy other than collision coverage? A. Jason's suitcase is stolen from his car while the car is parked at the airport B. Someone shoots Jason's car rear window while the car is parked on the street C. The sides and top of the Jason's car is damaged when it rolls over on an icy curve D. Jason locks his keys in the car, and then breaks a window to gain quick access

B. Someone shoots Jason's car rear window while the car is parked on the street Damage to the wind shield would be covered under Comp.

Which of the following is NOT true of the Market Conduct Bureau? A. The Bureau conducts examinations licensed insurer`s claims-handling practices in the state. B. The Bureau provides individuals and companies assistance in buying automobile liability insurance in the state. C. The Bureau protects the public when they purchase insurance, make claims, etc. from insurance companies. D. The Bureau consists of the Field Claims Bureau and Field Rating and Underwriting Bureau.

B. The Bureau provides individuals and companies assistance in buying automobile liability insurance in the state. This bureau protects the public, but does not assist them in buying insurance.

Which of the following statements is false regarding the cost of the low cost automobile insurance program? A. The two pilot counties include San Francisco County and Los Angeles 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. The policy covers two vehicles per household at an initial annual rate of $410 for San Francisco County and $450 for Los Angeles 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.

B. The policy covers one vehicle per household. The policy covers two vehicles per household at an initial annual rate of $410 for San Francisco County and $450 for Los Angeles 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.

Which of the following coverage's pays the cost of renting a car if the vehicle is inoperable because of a covered Comprehensive or Collision loss? A. Physical Damage B. Transportation Expenses C. Physical Damage Settlement Option D. Other Than Collision

B. Transportation Expenses

To place business with CAARP a person must have tried over and over to get insurance through the regular market within how many days before applying to CARRP? A. 15 days B. 30 days C. 60 days D. 90 days To place business with CAARP, a person must have made extensive efforts to get insurance through the regular market in the 60 days before applying to CARRP.

C. 60 days To place business with CAARP, a person must have made extensive efforts to get insurance through the regular market in the 60 days before applying to CARRP.

Which of the following Personal Auto Coverage's 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 (other than collision) B. Collision coverage C. Liability coverage D. Medical payments

C. Liability coverage

Which of the following is NOT true of the Good Driver Discount according to Proposition 103? A. Prop. 103 states that an insurer cannot refuse to write an applicant who qualifies for a good driver discount. B. A good driver discount should be at least 20% below the rate the insured would otherwise have charged for the same coverage. C. Prop. 103 requires that the insured purchase homeowner's insurance to be eligible for the good driver discount. D. A good driver discount applies if all of the following criteria is met: licensed driver has not had one violation point during the past three years, was not the driver of motor vehicle that involved an accident which resulted in death or in total loss of damage exceeding $500, and was not principally at fault.

C. Prop. 103 requires that the insured purchase homeowner's insurance to be eligible for the good driver discount.

What is the purpose of a Miscellaneous Type Vehicle Endorsement? A. This endorsement is for people who don't own a vehicle but still drive (rented, public transportation, company vehicle, etc.) B. This endorsement allows non-owned vehicles furnished for the insured's regular use (company car). C. This endorsement allows the PAP to cover vehicles such as motorcycles, ATV's, dune buggies, and motor homes. D. This endorsement covers expenses incurred in the event of a total theft.

C. This endorsement allows the PAP to cover vehicles such as motorcycles, ATV's, dune buggies, and motor homes. Miscellaneous Type Vehicle Endorsement allows the PAP to cover these vehicles.

While Jason's covered auto is in the repair shop following damage caused by a collision, Jason would have coverage for which of the following vehicles under his Personal Auto Policy? A. Any vehicle used by Jason without the reasonable belief that he is entitled to use such vehicle. B. Any auto furnished for Jason's regular use, but not named on the policy. C. Any vehicle located inside a racing facility for the purpose of racing. D. Any vehicle not owned by Jason, but furnished for his use while his covered auto is out of normal use because of breakdown, repair, servicing, loss, or destruction. The temporary auto coverage provision allows the PAP to provide coverage for an insured while he uses 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.

D. Any vehicle not owned by Jason, but furnished for his use while his covered auto is out of normal use because of breakdown, repair, servicing, loss, or destruction. The temporary auto coverage provision allows the PAP to provide coverage for an insured while he uses 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.

To be eligible to receive the Low Cost Auto Insurance Program the drivers must meet all of the following EXCEPT: A. Have no more than one property damage-only accident in which they were at fault. B. Have no felony or misdemeanor vehicle code violations on their record. C. Have a vehicle valued at less than the $20,000 D. Be at least 16 years of age.

D. Be at least 16 years of age. Be at least 19 years old

What type of endorsement waives the standard requirement of a 4-wheel vehicle and/or a vehicle weight of less than 10,000 pounds' limitation? A. Extended Non-owned Liability B. Named Non-owner C. Excess Automobile Liability Exposure D. Miscellaneous Type Vehicle

D. Miscellaneous Type Vehicle

Personal auto policy territory limits include which of the following cities? A. Cancun, Mexico B. Paris, France C. Mexico City, Mexico D. Montreal, Canada

D. Montreal, Canada

A policy that typically insures drivers who have a less than favorable driving record or less driving experience than is desired is known as which of the following coverages? A. GAP coverage B. Named Nonowner coverage C. Other Than Collision coverage D. Non-standard Physical Damage coverage

D. Non-standard Physical Damage coverage

Which of the following does NOT define an uninsured motorist? A. A hit and run vehicle. B. Person without insurance. C. Person's insurer becomes insolvent. D. Person with insurance.

D. Person with insurance.

If an insured under a personal auto policy leaves a covered auto at an auto dealer for repairs, and the auto is involved in an accident while being test driven by an employee of the dealer, how will the personal auto policy respond to liability claims? A. The personal auto policy is primary B. There is no coverage under the personal auto policy C. The personal auto policy will share with the dealer's policy on a pro-rate basis D. The personal auto policy is excess

D. The personal auto policy is excess

Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car? A. The financial responsibility limits B. The broadest coverage of any autos listed in the declarations C. The coverage primarily operated by the named insured D. The policy excludes this usage The question assumes that the non-owned company car is used regularly

D. The policy excludes this usage The question assumes that the non-owned company car is used regularly

When are personal effects that are transported in the vehicle covered? A. When the loss was caused by another driver. B. When the personal effects are listed in the policy. C. They are not covered unless listed on an endorsement. D. They are not covered.

D. They are not covered. Personal items are covered under a home or renters policy.