Finance 341 Test #2
A defendant who is only slightly liable may be required to pay the full amount of damages under which of the following? A) the joint and several liability rule B) the collateral source rule C) arbitration D) res ipsa loquitor
A
All of the following are covered autos under the liability section of the PAP EXCEPT A) a nonowned van which is driven by the insured on a regular basis. B) a trailer owned by the named insured. C) a borrowed auto used by the insured as a substitute for a stolen covered auto. D) a newly acquired auto which replaces a vehicle previously described in the policy.
A
All of the following are elements of negligence EXCEPT A) the ability to pay damages. B) the failure to perform a legal duty to use reasonable care. C) damage or injury to a claimant. D) proximate cause between the negligent act and the injury or harm that occurs.
A
Arguments in favor of reforming the civil justice system include which of the following? I. There is often a long delay in settling lawsuits. II. Compensation awards have decreased significantly over the past two decades. A) I only B) II only C) both I and II D) neither I nor II
A
Compensatory damages include A) general damages and special damages. B) special damages and punitive damages. C) punitive damages and general damages. D) general damages, special damages, and punitive damages. Answer: A
A
Damages awarded for losses that can be determined or measured are A) special damages. B) general damages. C) punitive damages. D) comparative damages.
A
Duties of an insured after a collision loss covered under the PAP include which of the following? I. Take reasonable steps to protect the vehicle from further damage. II. Admit fault if the insured believes he or she caused the collision. A) I only B) II only C) both I and II D) neither I nor II
A
Heather sued Robert for injuries suffered in an automobile accident. Based on the facts presented, the jury concluded that Heather was 40 percent at fault in the accident and Robert was 60 percent at fault. Under the common law doctrine of contributory negligence, the jury should award Heather A) nothing. B) 40 percent of her actual damages. C) 60 percent of her actual damages. D) 100 percent of her actual damages.
A
Ken purchased a PAP with liability limits of 100/300/50, medical payments coverage, and collision coverage. Ken fell asleep while driving late at night. He crossed the center line and hit a car approaching from the other direction. The following losses occurred: —The driver of the other car suffered $30,000 in bodily injuries. —Ken's car sustained $5,000 in damages. —Ken incurred $5,000 in medical expenses. —The car that Ken hit was a total loss. Which of Ken's Personal Auto Policy (PAP) coverages will cover the other driver's medical expenses? A) bodily injury liability B) collision coverage C) medical payments coverage D) property damage liability
A
Louise was in a hurry and tried to cross the street in the middle of the block rather than at a street corner. A car struck her. Even though Louise placed herself in danger, she may still be able to collect for her injuries if the driver had an opportunity to avoid hitting her but failed to do so. This rule is called the A) last clear chance rule. B) collateral sources rule. C) alternative dispute resolution rule. D) joint and several liability rule.
A
Sarah purchased a Personal Auto Policy with liability limits of 50/100/25. Sarah ran a stop sign and hit a van. The van sustained $15,000 in damages. The following bodily injuries were suffered by passengers in the van: Passenger #1, $15,000; Passenger #2, $60,000; and Passenger #3, $10,000. Sarah sustained $5,000 in medical expenses, and Sarah's car sustained $10,000 in damages. How much will Sarah's insurer pay under Part A: Liability Coverage? A) $90,000 B) $100,000 C) $115,000 D) $125,000
A
Steve was involved in an auto accident. Both drivers were partially at fault for the accident. Steve's actual damages were $50,000. He was judged to be 20 percent at fault. If Steve's state has a contributory negligence law, how much will Steve collect? A) $0 B) $10,000 C) $25,000 D) $40,000
A
Steve was involved in an auto accident. Both drivers were partially at fault for the accident. Steve's actual damages were $50,000. He was judged to be 60 percent at fault. If Steve's state has a 51 percent rule for comparative negligence, how much will Steve collect? A) $0 B) $20,000 C) $30,000 D) $50,000
A
Tony has an unendorsed Personal Auto Policy which provides medical payments coverage. Under which of the following circumstances would the injured person be eligible for benefits under Tony's policy? I. A friend in the car is injured while Tony is driving a covered auto. II. A passenger on a motorcycle driven by Tony is injured when Tony hit another vehicle. A) I only B) II only C) both I and II D) neither I nor II
A
Under a dram shop law, a business may be held liable for damages resulting from A) the sale of alcohol. B) the creation of an unsafe work place. C) the sale of prescription drugs. D) the creation of a hostile work environment.
A
Under certain conditions, the wrongful acts of one person can be attributed to another person. This practice is called A) imputed negligence. B) mediation. C) comparative negligence. D) strict liability.
A
Under common law, which of the following persons is most likely to be classified as an invitee? A) a mail carrier B) a social guest C) a door-to-door salesperson D) a solicitor for a charitable organization
A
Which of the following is a covered person under the medical payments coverage of the PAP? A) a family member of the named insured if struck by an auto while crossing the street B) a pedestrian struck by the named insured's auto C) the named insured while she is operating her car as a taxi D) a carjacker who is involved in an accident after stealing the insured's car
A
Which of the following is an intentional tort? A) slander B) negligence C) strict liability D) murder
A
Which of the following may give rise to imputed negligence? A) employer-employee relationships B) injury to a trespasser C) sole proprietorships D) attractive nuisance situations
A
Which of the following statements about the elements of negligence is (are) true? I. The negligence of the tortfeasor may arise from a failure to act. II. The damage that results must be in the form of property damage. A) I only B) II only C) both I and II D) neither I nor II
A
Which of the following statements about the legal obligations of a property owner is (are) true? I. A property owner must inspect the premises for the benefit of an invitee and correct any unsafe conditions. II. A property owner has the right to set a trap designed to injure a trespasser. A) I only B) II only C) both I and II D) neither I nor II
A
Which of the following statements about the payment of defense costs by the PAP is (are) true? I. They are paid in addition to the policy limits. II. They are payable even after the limit of liability is exhausted. A) I only B) II only C) both I and II D) neither I nor II
A
A common situation involving strict liability includes which of the following? A) operating a motor vehicle B) blasting operations C) manufacturing a product D) mining operations
B
A homeowner was repairing the deck on the back of his home. He left power tools on the deck when he quit working for the day. A neighbor's child saw the power tools. He came on to the deck, and started to play with a power saw. He cut off two of his fingers. A property owner may be held liable for creating a condition that entices children to enter the property where they are injured under the doctrine of A) sovereign immunity. B) attractive nuisance. C) family purpose. D) respondeat superior.
B
All of the following are categories of torts EXCEPT A) intentional torts. B) breach of contract. C) strict liability. D) negligence.
B
All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT A) the cost of an appeal bond in a lawsuit stemming from an auto accident. B) the cost of a bail bond for a traffic violation when no accident is involved. C) interest which accrues on a liability judgment covered by the policy. D) reasonable expenses incurred by the insured to testify at a trial involving a lawsuit covered by the policy.
B
All of the following are examples of tort reform proposals EXCEPT A) modifying the collateral source rule. B) eliminating caps on noneconomic damages. C) regulation of attorney fees. D) imposing penalties to deter frivolous lawsuits.
B
All of the following are proposed solutions to the medical malpractice problem EXCEPT A) shortening the statute of limitations for filing lawsuits. B) eliminating arbitration panels to resolve disputes. C) placing limitations on contingent fees charged by attorneys. D) placing limitations on damage awards.
B
All of the following losses are excluded under Part D (coverage for damage to your auto) of an unendorsed PAP EXCEPT A) vandals damaged a portable cell phone kept in the car. B) theft of a compact disc player which was permanently installed in the auto. C) damage caused to a car's engine because the named insured never changed the oil. D) destruction of a radar detector which overheated and caught on fire.
B
All of the following requirements must be met to satisfy the doctrine of res ipsa loquitur EXCEPT A) The injured party has not contributed to the accident in any way. B) The injured party must prove negligence on the part of the defendant. C) The event is one that normally does not occur in the absence of negligence. D) The defendant has exclusive control over the instrumentality causing the accident.
B
Angie was injured when her car was struck by a driver who ran a red light. The other driver carried the minimum liability coverage necessary to be considered financially responsible. Angie's injuries were $15,000 above the minimum bodily injury limit. There is a coverage that can be added to the PAP that applies when a negligent driver carries the minimum liability insurance required by the state, but is less than the insured's actual damages for bodily injury. This coverage is called A) medical payments coverage. B) underinsured motorists coverage. C) bodily injury liability coverage. D) uninsured motorists coverage.
B
Bruce believes a local manufacturer is responsible for contaminating some land he owns. He filed suit against the company. Rather than have the case go to court, the manufacturing company's legal team suggested mediation or arbitration to settle the case. Methods that are employed to resolve legal disputes without litigation, such as mediation, are called A) collateral source rules. B) alternative dispute resolution techniques. C) joint and several liability techniques. D) comparative negligence rules.
B
In addition to providing coverage in the United States, its territories and possessions, and Puerto Rico, where else does the PAP provide coverage? A) in Mexico B) in Canada C) in both Mexico and Canada D) anywhere in the world
B
James was injured in an auto accident caused by another motorist's negligence. To reimburse him for his hospital bills and lost earnings, items which can be specifically itemized, James will receive A) punitive damages. B) special damages. C) imputed damages. D) general damages.
B
Ken purchased a PAP with liability limits of 100/300/50, medical payments coverage, and collision coverage. Ken fell asleep while driving late at night. He crossed the center line and hit a car approaching from the other direction. The following losses occurred. —The driver of the other car suffered $30,000 in bodily injuries. —Ken's car sustained $5,000 in damages. —Ken incurred $5,000 in medical expenses. —The car that Ken hit was a total loss. Which of Ken's Personal Auto Policy (PAP) coverages will cover the damage to Ken's car? A) bodily injury liability B) collision coverage C) medical payments coverage D) property damage liability
B
Michelle had major abdominal surgery. Months after the surgery, she still did not feel well. When she was operated on again, the surgeon discovered two sponges that were not removed at the conclusion of the first operation. Michelle should be able to collect damages without having to prove negligence under the doctrine of A) joint and several liability. B) res ipsa loquitor. C) contributory negligence. D) uberrimae fidei.
B
Nancy was injured when she drove her car through a stop sign and was struck by Philip's car. Philip saw Nancy and could have stopped. However, he failed to do so since he had the right-of-way. Nancy can recover damages from Philip under which of the following legal doctrines? A) vicarious liability B) the last clear chance rule C) contributory negligence D) the assumption of risk doctrine
B
One tort reform permits manufacturers to assert that as long as the product conformed to the prevailing technology and production methods at the time it was produced, it cannot be considered a defective product today. This defense is called the A) collateral source rule. B) state of the art defense. C) strict liability defense. D) privity of contract rule.
B
Patricia purchased a Personal Auto Policy (PAP). Her car was rear-ended by a driver who fled the scene. Patricia suffered whiplash, migraine headaches, and she was unable to work. Which of the following coverages will cover her lost work earnings? A) medical payments B) uninsured motorists C) underinsured motorists D) bodily injury liability
B
Steve was involved in an auto accident. Both drivers were partially at fault for the accident. Steve's actual damages were $50,000. He was judged to be 60 percent at fault. If Steve's state has a pure comparative negligence law, how much will Steve collect? A) $0 B) $20,000 C) $30,000 D) $50,000
B
The purpose of gap insurance is to A) pay the difference between the bodily injury liability limit purchased and the actual amount of bodily injury liability if it exceeds the limit. B) pay the difference between the amount the insurer pays if a car is a total loss and the remaining amount owed on a lease or car loan. C) pay the difference between the medical payments coverage limit and the actual medical expenses of injured family members or passengers in the insured auto. D) pay the difference between the uninsured motorists coverage limit and the actual amount of the medical expenses incurred by the insured.
B
Traditionally, federal state, and local governments could not be sued. This immunity had eroded over time. Today, government units may be liable for injuries arising out of money-making activities. Such activities are called A) municipal operations. B) proprietary functions. C) commercial ventures. D) pecuniary interest.
B
Under one doctrine, a person who understands the danger inherent in an activity cannot recover damages in the event of injury from the activity. This doctrine is called the A) contributory negligence doctrine. B) assumption of risk doctrine. C) comparative negligence doctrine. D) fellow servant doctrine.
B
Under state workers compensation programs, employers may not use common law defenses to defend against claims of workers who are injured on the job. In such cases, proof of a worker's injury is proof of responsibility of the employer. Because of this characteristic, workers compensation is an example of A) personal injury. B) strict (absolute) liability. C) comparative negligence. D) tort liability.
B
What is the intent of the family purpose doctrine? A) to impose liability on children for the care of elderly parents B) to impose liability on the owner of an automobile for the negligence of immediate family members operating the automobile C) to impose liability on a parent for any negligence caused by a child D) to impose strict liability on the owner of a wild animal for any injuries caused by the animal
B
Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP? I. A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses II. The spouse of a named insured who is killed by an uninsured motorist A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following situations would be covered by the liability section of an unendorsed PAP if the insured is legally liable? A) The insured injures a pedestrian while operating a friend's new motorcycle. B) The insured backs into and damages the garage door of his rented house. C) The insured intentionally runs into another motorist's car after the driver cut in front of him. D) The insured damages a parked car while driving a dump truck for his employer.
B
Which of the following situations would be covered under the liability section of the PAP? I. A mechanic is sued by a pedestrian who is injured when the mechanic has an accident while road testing the insured's auto. II. The daughter of the named insured is sued after she has an accident when a new friend she just met at a campus hangout lets her drive his car. A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following statements about comparative negligence laws is (are) true? I. Under the pure rule, any negligence by the plaintiff automatically bars recovery for damages. II. Under the 50 percent rule, parties who are equally at fault are each allowed to recover damages. A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following statements about monetary damages awarded by a court is (are) true? I. The purpose of general damages is to provide benefits for medical expenses or loss of earnings. II. The purpose of punitive damages is to punish the tortfeasor so that others are deterred from committing the same wrongful act. A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following statements about the Miscellaneous-Type Vehicle Endorsement to the PAP is (are) true? I. It provides bodily injury liability coverage for any vehicle rented by the insured. II. It can be added to PAP to insurance motorcycles and motor scooters. A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following statements about the immunity of governmental entities is (are) true? I. Governmental entities are more likely to be immune from liability when performing proprietary functions than when performing governmental functions. II. Many courts have eliminated the immunity of government entities. A) I only B) II only C) both I and II D) neither I nor II
B
Which of the following statements about the uninsured motorists coverage of the PAP is true? A) The coverage usually applies only to property damage. B) The coverage applies only if the uninsured motorist is legally liable. C) Unless higher amounts are purchased, the maximum benefit is normally limited to $1,000. D) A covered person's only recourse is to sue the insurer if there is a disagreement over the amount of damages.
B
Which of the following statements concerning the collision damage waiver when renting an auto is true? I. It relieves the renter from legal liability to third parties arising out of operation of the rented car. II. It relieves the renter from legal liability for the vehicle if it is damaged or stolen. A) I only B) II only C) both I and II D) neither I nor II
B
A car damaged in an auto accident may have reduced market or resale value after it is repaired. Some insureds have sought to recover this reduction in market or resale value. This loss in value is called A) gap coverage. B) betterment. C) diminution. D) subrogation.
C
A legal action in which a plaintiff pursues damages from a defendant on behalf of a group of individuals who have also been harmed is called a A) collateral source action. B) punitive damages case. C) class action lawsuit. D) joint and several liability case.
C
A person who enters or remains on the property with the occupant's expressed or implied permission is called (a)n A) trespasser. B) resident agent. C) invitee. D) licensee.
C
All of the following are considered to be uninsured vehicles for purposes of the uninsured motorists coverage of the PAP EXCEPT A) a vehicle owned by an individual who is insured, but for less than the amount required by the state's financial responsibility law. B) a hit-and-run vehicle, the ownership of which cannot be determined. C) a vehicle owned by an individual who purchased just enough liability insurance to satisfy the state's financial responsibility law. D) a vehicle insured by a company which becomes insolvent before a claim can be paid.
C
All of the following are insured persons under the liability coverage of the PAP EXCEPT A) a friend to whom the named insured loans a covered auto. B) the employer of the named insured for actions resulting from the named insured's use of a covered auto. C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized. D) a relative of the named insured if a member of the same household.
C
All of the following statements about the termination provisions of the PAP are true EXCEPT A) The insured can cancel the policy for any reason. B) The insurer can cancel a newly-written policy if it has been in force for fewer than 60 days. C) The insurer can cancel the policy after it has been in force for 60 days only if the insured has three or more traffic violations. D) The insurer can refuse to renew the policy at its annual anniversary date as long as proper notice is given prior to the end of the policy period.
C
Alternative techniques for resolving legal disputes without litigation include which of the following? I. Arbitration II. Mediation A) I only B) II only C) both I and II D) neither I nor II
C
Cities, counties, school districts, police, transit operations, and water/sewage treatment plants are being sued more often. This broad, problematic, area of tort claims is called A) private sector liability. B) directors and officers liability. C) public entity liability. D) cyber liability.
C
In the context of medical malpractice, what is a "never event"? A) A medical condition that despite the best screening and technology cannot be detected. B) A pandemic that quickly spreads and infects many people. C) A medical error that should never occur. D) An event for which doctors and medical facilities cannot be held legally responsible.
C
In which of the following situations would medical payments be paid under an unendorsed PAP? A) injuries incurred while riding a motorcycle B) injuries incurred while an auto is being used without the presumption that permission would have been granted to use the auto C) injuries incurred in an auto while it is used in a share-the-expense car pool D) injuries incurred during the course of employment if workers compensation benefits are available
C
John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie's car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. How much will be paid by each policy? A) Sophie's policy will pay $150,000, John's policy will pay $150,000. B) Sophie's policy will pay $50,000, John's policy will pay $250,000. C) Sophie's policy will pay $100,000, John's policy will pay $200,000. D) John's policy will pay the entire amount.
C
Ken purchased a PAP with liability limits of 100/300/50, medical payments coverage, and collision coverage. Ken fell asleep while driving late at night. He crossed the center line and hit a car approaching from the other direction. The following losses occurred. —The driver of the other car suffered $30,000 in bodily injuries. —Ken's car sustained $5,000 in damages. —Ken incurred $5,000 in medical expenses. —The car that Ken hit was a total loss. Which of Ken's Personal Auto Policy (PAP) coverages will cover Ken's medical expenses? A) bodily injury liability B) collision coverage C) medical payments coverage D) property damage liability
C
Larry has $25,000 of bodily injury liability coverage under his PAP. This limit is the minimum amount required by his state to be considered financially responsible. While on a vacation, Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury. Which of the following statements describes the situation for Larry while he was in the neighboring state? A) Larry's policy was suspended while he was in the neighboring state. B) Larry had only $25,000 of liability coverage. C) Larry's policy automatically provided $50,000 of liability coverage. D) Larry's policy automatically provided $100,000 of liability coverage.
C
Malcolm was involved in an auto accident. He was judged to be 20 percent at fault in the accident, and the other party was judged to be 80 percent at fault. Malcolm's actual damages were $40,000. Under a pure comparative negligence rule, how much will Malcolm receive for his injuries? A) $8,000 B) $24,000 C) $32,000 D) $40,000
C
One requirement for proving that an act was negligent is the existence of an unbroken chain of events between the act and the injury or harm that occurred. This unbroken chain of events is called A) condition precedent. B) cause and effect. C) proximate cause. D) condition subsequent.
C
One tort reform proposal is capping noneconomic damages. Noneconomic damages include A) payment for time missed from work. B) payment for the cost of a hospital stay. C) payment for pain and suffering. D) payment for the cost of care provided by a physical therapist.
C
Rob purchased a Personal Auto Policy (PAP) with collision and other-than-collision coverage. Which of the following losses would be covered under his policy? A) Rob wrecked his car while using it as a taxi cab. B) Thieves took Rob's radar detector from his car. C) A flash flood washed Rob's car off the road and damaged it. D) The new tires Rob had on the car were defective and wore out after 2 months.
C
Situations under which parents can be held liable for the actions of a child include which of the following? I. The child uses a parent's gun to injure someone. II. The child is acting as an agent of the parent. A) I only B) II only C) both I and II D) neither I nor II
C
Someone who is asked to come on to the property to benefit the property owner, such as customers at a store or a garbage collector, is classified as a(n) A) trespasser. B) resident agent. C) invitee. D) licensee.
C
The doctrine of respondeat superior applies to a(n) A) parent's liability for a negligent child. B) pet owner's liability for the pet. C) employer's liability for a negligent employee. D) manufacturer's liability for a faulty product.
C
The insurance company's options for settling a collision loss to a covered auto under the PAP include which of the following? I. Pay the loss in money. II. Repair or replace the damaged auto. A) I only B) II only C) both I and II D) neither I nor II
C
The purpose of the Miscellaneous-Type Vehicle Endorsement to the PAP is to A) add coverage for newly-acquired autos. B) provide coverage for when the insured is using someone else's auto with the permission of the owner. C) insure motorcycles, mopeds, motor scooters, and similar vehicles. D) provide coverage for when the insured is using someone else's auto without the permission of the owner.
C
Trisha was injured when the delivery truck for a local furniture store struck her. The delivery driver claimed the brakes of the delivery truck failed, causing the accident. Trisha filed suit, and in her lawsuit named the delivery driver, the furniture store, the service station responsible for vehicle maintenance, and the manufacturer of the vehicle. Even though the manufacturer of the vehicle may be only 1 percent responsible for the accident, it may be required to pay a large percentage of the damages under the A) collateral source rule. B) assumption of risk rule. C) joint and several liability rule. D) last clear chance rule.
C
Which of the following are legal obligations of a property owner with respect to an invitee? I. The property owner must warn an invitee of any unsafe conditions. II. The property owner must inspect the premises and eliminate any dangerous conditions revealed by the inspection. A) I only B) II only C) both I and II D) neither I nor II
C
Which of the following is considered to be a collision loss under Part D (coverage for damage to your auto) of the PAP? A) The covered auto was damaged when the car hit a deer. B) The covered auto is vandalized by a thief after it is stolen. C) The covered auto is damaged when it slid off an icy road and hit a fence. D) The covered auto is damaged by a fire after the engine overheated.
C
Which of the following persons is (are) covered for liability insurance under the PAP? I. a family member who drives a covered auto II. a family member who occasionally drives a friend's auto A) I only B) II only C) both I and II D) neither I nor II
C
Which of the following statements about class action lawsuits is (are) true? I. Law firms, rather than individuals who are injured, often initiate the lawsuit. II. The cost of filing a single lawsuit on behalf of may aggrieved parties is less than the cost each of the parties filing a separate lawsuit. A) I only B) II only C) both I and II D) neither I nor II
C
Which of the following statements about the liability limits of the PAP is (are) true? I. The policy can be written with split limits of liability. II. Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability. A) I only B) II only C) both I and II D) neither I nor II
C
Which of the following statements about the medical payments coverage of the PAP is true? A) The amount of the benefit typically is $100,000. B) Covered expenses must be incurred within 30 days of the accident. C) Covered expenses include the cost of funeral services. D) The benefit limit applies on a per-accident basis rather than on a per-person basis.
C
Which of the following statements about torts is (are) true? I. The person who is injured or harmed by a tort is called a plaintiff or claimant. II. The punishment for committing a tort is damages in the form of money. A) I only B) II only C) both I and II D) neither I nor II
C
A legal wrong for which the law allows a remedy in the form of money damages is a A) crime. B) breach. C) misdemeanor. D) tort.
D
A situation in which a person is held legally liable even though fault or negligence cannot be proven is an example of A) general damages. B) comparative negligence. C) an intentional tort. D) strict liability.
D
All of the following statements about Part D (coverage for damage to your auto) of the PAP are true EXCEPT A) Coverage may be purchased with or without collision insurance. B) Losses are paid regardless of fault. C) Coverage applies to a nonowned auto occasionally driven by an insured. D) No coverage is provided for newly-acquired vehicles.
D
Dennis was involved in an accident. He believes the damage to his auto is $7,000. His insurer believes the damage is only $3,500. Which PAP provision is designed to handle disputes between the insurer and the insured over the amount of the loss? A) other insurance provision B) agreed amount endorsement C) coinsurance provision D) appraisal provision
D
Failure to exercise the degree of care required by law to protect others from harm is called A) premeditated liability. B) vicarious liability. C) punitive damages. D) negligence.
D
Francis opened a store. She knows that customers who come to the store may be injured on the premises and hold her responsible for their injuries. Under common law, business customers in the store Francis opened are considered A) aliens. B) licensees. C) trespassers. D) invitees.
D
James was injured in an auto accident caused by another motorist's negligence. He received severe facial lacerations and injured his back in the accident. In payment for his pain, suffering, and disfigurement, losses which cannot be specifically itemized, James will receive A) punitive damages. B) special damages. C) imputed damages. D) general damages.
D
Jan was injured in a work-related auto accident. She sued the other driver, and the case went to court. While questioning Jan, the defendant's lawyer asked if her injuries and lost earnings were covered under workers compensation. Jan's lawyer objected to the question. The judge ruled the question was improper and instructed the jury to disregard the question. Based on the judge's reaction to the question, which of the following rules is in force where this trial took place? A) the joint and several liability rule B) the last clear chance rule C) the comparative negligence rule D) the collateral source rule
D
John has an auto which is covered for collision losses subject to a $250 deductible. Kate's auto also has collision coverage but her deductible is $500. Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs? A) John's policy will pay $1,500, and Kate's policy will pay nothing. B) John's policy will pay $1,750, and Kate's policy will pay nothing. C) Kate's policy will pay $1,750, and John's policy will pay nothing. D) Kate's policy will pay $1,500, and John's policy will pay $250.
D
Joyce was injured by an uninsured drunk driver while she was riding in a friend's car. Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000. How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries? A) Each policy will pay $35,000. B) Joyce's policy will pay $50,000, and the friend's policy will pay nothing. C) Joyce's policy will pay $50,000, and the friend's policy will pay $20,000. D) The friend's policy will pay $50,000, and Joyce's policy will pay $20,000.
D
Ken purchased a PAP with liability limits of 100/300/50, medical payments coverage, and collision coverage. Ken fell asleep while driving late at night. He crossed the center line and hit a car approaching from the other direction. The following losses occurred. —The driver of the other car suffered $30,000 in bodily injuries. —Ken's car sustained $5,000 in damages. —Ken incurred $5,000 in medical expenses. —The car that Ken hit was a total loss. Which of Ken's Personal Auto Policy (PAP) coverages will cover the damage to the car that Ken hit? A) bodily injury liability B) collision coverage C) medical payments coverage D) property damage liability
D
Legal liability arising out of "driverless cars" is a developing issue. Another name for "driverless cars" is A) droids. B) uninsured motorists. C) drones. D) autonomous vehicles.
D
Unmanned aircraft systems are gaining in popularity. These systems are creating new liability exposures. Unmanned aircraft systems are also known as A) rockets. B) hovercraft. C) ultralights. D) drones.
D
What is the purpose of the extended nonowned liability coverage endorsement to the PAP? A) to provide liability coverage for an insured's employer when an insured uses his or her auto for business purposes B) to provide liability coverage for an insured who occasionally operates a nonowned auto C) to provide liability coverage for anyone who loans a covered auto to another driver D) to provide liability coverage for an insured who operates a nonowned auto on a regular basis
D
Which of the following statements is (are) true with respect to the collision damage waiver on rented cars? I. It is inexpensive and is provided at no charge by most rental car companies. II. It waives the renter's liability for bodily injury liability arising out of use of the rented auto. A) I only B) II only C) both I and II D) neither I nor II
D
