Module 7 - Personal Auto Policy

The insured has an auto policy with liability limits of 30/60/10. He negligently runs off the road and causes $70,000 damage to an apartment building. How much will the policy pay for the damage to the building?

$10,000 In the policy described, damage the policyholder causes to someone else's property is limited to $10,000.

George has Underinsured motorist limit of $300,000, Fred has Coverage A liability limit of $100,000. Fred injures George in an auto accident and George sues Fred for $250,000. How much will George collect from his Coverage C Underinsured motorist?

$150,000

What is the limit for temporary transportation expenses under a personal auto policy?

$20 a day with a maximum of $600

How much will the personal auto policy pay for a rental car if the insured vehicle is stolen?

$20 per day, up to $600 maximum

If an insured had a limit of liability of 100/300/25 what is the maximum amount that could be payed for a property damage claim?

$25,000

Under the medical payments coverage of a personal auto policy, the insurer pays for medical expenses and funeral services incurred within how many years from the date of an accident?

3

Part B Medical Payments found in the personal auto policy would pay benefits for how long?

3 Years

Which of the following would not qualify as "your covered auto"? A A newly acquired vehicle purchased three days ago B A newly acquired vehicle purchased 20 days ago C Any owned trailer D A 10 ton dump truck used as a temporary substitute automobile

A newly acquired vehicle purchased 20 days ago

Which of the following individuals would be covered for liability under the personal auto policy? A A six-year-old who is not licensed while driving the car around the block B An employee injured while going to the jobsite C A thief who stole the car D A mechanic who is test driving the car

A six-year-old who is not licensed while driving the car around the block

Physical damage losses under the personal auto policy are reimbursed on what basis?

Actual cash value or cost to repair or replace, whichever is less

Which of the following is not excluded under Part D - damage to your auto? A An at fault accident committed by the insured B Government confiscation C Wear and tear D Theft of electronic equipment temporarily installed in the auto

An at fault accident committed by the insured

If a dispute arises over whether an insured is entitled to uninsured motorists coverage, what process is used to settle the dispute?

Arbitration Part C of the PAP contains an arbitration provision, which may be used to settle disputes involving whether the insured is entitled to coverage or the amount of damages.

Which of the following is NOT included in the Personal Injury Protection endorsement in a personal auto policy in Michigan? A Attorney fees B Work loss C Replacement services D Funeral expenses

Attorney fees

Which of the following individuals would be ineligible for automobile insurance? A Ben who is under the age of 18 B Susan who was convicted of reckless driving three times over 10 years ago C Hannah who has accumulated three insurance eligibility points in the last three years D Barry who has a suspended license due to driving under the influence

Barry who has a suspended license due to driving under the influence

Bobby, age 16, borrows his parents' car without their permission and gets into an accident. Which of the following statements about coverage under the parents' personal auto policy is CORRECT? A Bobby is covered by his parents' policy because he is a family member. B Bobby is covered by his parents' policy because he is included in the definition of named insured. C Bobby is not covered for this accident because he used the car without permission D Bobby is not covered because it was not his car

Bobby is covered by his parents' policy because he is a family member.

Which of the following is considered a uninsured/underinsured motor vehicle? A Car insured for less than the limits required by the state B Car furnished by an employer to an aunt living in the insured's household C A dune buggy used off-road D Car owned by the state insurance department

Car insured for less than the limits required by the state

Depending on the circumstances, a passenger injured in an automobile accident may be able to recover under all of the following coverages EXCEPT

Collision

While backing her car into a parking space on a neighborhood street, Melanie struck a fire hydrant with her bumper. Which coverage under Melanie's personal auto policy (PAP) will cover the damage to the bumper?

Collision

Part D

Coverage for Damage to the Insured's Auto

Which one of the following guarantees that an insurer CANNOT refuse to insure or continue to insure an eligible applicant? A Michigan FAIR Plan B Essential Insurance Act C Michigan Automobile Insurance Placement Facility D Michigan Basic Property Insurance Association

Essential Insurance Act

The Extended Non-Owner endorsement on a Personal Auto policy does which of the following? A Expands the exclusions for non-owned autos B Eliminates coverage for non-owned autos C Expands coverage for non-owned autos used furnished and available for your regular use D Eliminates the driver of a company car from coverage

Expands coverage for non-owned autos used furnished and available for your regular use

Every state requires that each person be able to prove they are financially prepared if involved in an accident. Michigan requires minimum liability limits of 50/100/10. What is the name of that law?

Financial responsibility law

All states have financial responsibility laws that require each driver to prove that he can pay for bodily injury or property damage liability losses arising out of auto accidents. These are also known as

Financial responsibility laws

Which of the following damages is covered Under Part D—Coverage for Damage to the Insured's Auto? A Flood B Wear and tear C Mechanical breakdown not resulting from total theft D Freezing

Flood

Which one of the following would NOT be paid as supplementary payments under Part A of the personal auto policy? A Funeral expenses for the insured B Expenses the insurer incurs in investigating claims C Interest accruing after a judgment is entered which was defended by the insurer D The insured's lost earnings up to $200 per day because of court appearances

Funeral expenses for the insured

In a personal auto policy, which of the following would not be considered occupying? A Getting into the car B Getting out of the car C Getting off of the car D Getting out from underneath the car

Getting out from underneath the car

Tammy was struck by a hit-and-run driver and suffered injuries to her neck. Which part of her personal auto policy, if any, will cover this loss?

Her uninsured motorists coverage pays her medical bills

The PAP provides coverage for newly acquired vehicles.

How coverage applies depends on the coverage and whether the vehicle is a replacement for an already insured vehicle or an additional auto. For liability, medical payments, and uninsured motorists coverage, a replacement vehicle automatically has the broadest coverage provided for any vehicle already listed on the declarations page. Notification of the insurer is not required.

Part A of the personal auto policy would apply in which of the following situations? A Insured's 13-year-old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars B Garage mechanic while test-driving the insured's auto C Driver using the insured vehicle to transport people for a fee D Driver who intentionally causes an accident

Insured's 13-year-old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars

Cecil sells his car and buys another one to replace it. How does the liability coverage in his personal auto policy apply to the replacement vehicle?

It is automatically covered

While driving to work one morning, Joe is hit from behind by a car driven by Sam. Joe is injured and taken to the hospital where he is admitted with a broken shoulder and other internal injuries. During the police investigation, it is determined that Sam was 100% negligent and did not have automobile insurance. What coverage will indemnify Joe for his injuries?

Joe's uninsured motorist bodily injury coverage

Which one of the following would be considered a temporary substitute vehicle under the terms of the personal auto policy? A Loaner vehicle provided by an auto repair shop B Company car provided by an employer C New car purchased by the insured 3 days ago D Truck borrowed from a friend while moving

Loaner vehicle provided by an auto repair shop

Which of the following is NOT one of the requirements for a loss to be paid under the uninsured motorists coverage of the personal auto policy? A Loss involves property damage to insured's auto B Loss is sustained by an insured C Insured is legally entitled to damages D Other vehicle meets policy's definition of uninsured vehicle

Loss involves property damage to insured's auto

Jane insures her car with ABC Insurers. Which of the following individuals best describes a family member on Jane's policy? A Maggie, her older sister, who lives with Jane B Uncle Joe visiting from Texas C Renee, a friend, who lives with Jane D Robert, her ex-husband who moved out last week

Maggie, her older sister, who lives with Jane

The personal auto policy coverage applies to losses, accidents, or occurrences that take place during the policy period in all the following locations EXCEPT A San Juan, Puerto Rico B Cabo San Lucas, Mexico C Alberta, Canada D Dover, Delaware

Mexico

The personal auto policy will cover you while driving an auto in all of the following places except A Mexico B Guam C Puerto Rico D Detroit

Mexico

What type of endorsement would be used to insure a recreational vehicle under the personal auto policy?

Miscellaneous type vehicle endorsement

Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company?

No—a written endorsement by the insurer is the only way to change the policy

If a vehicle collides with a boulder that came tumbling down the side of a mountain, what coverage would pay for the damage?

Other than Collision

If the insured hits a deer while driving his own vehicle, which part of the personal auto policy will pay to repair the vehicle?

Other than Collision

What part of the personal auto policy covers losses caused by malicious mischief, vandalism, hail, or floods?

Other than Collision

Comprehensive Coverage is also known as

Other than collision coverage

While driving to work, Leonard is eating his breakfast, reviewing his appointment book, and talking on his cell phone. He runs a red light and collides with a commuter van. The van's occupants are hospitalized. Which part of Leonard's personal auto policy covers the occupants' injuries and damage to the van?

Part A

Funeral expenses for the insured would be paid by

Part B—medical payments coverage of the PAP.

Anthony is a new Michigan resident with a driver's license. He has been denied automobile insurance through all ordinary methods. What is one option that Anthony may have to obtain automobile insurance?

The Michigan Automobile Insurance Placement Facility

Mary was involved in an accident with a hit-and-run driver. Her car was damaged. Which of the following items would be covered under the collision coverage in the personal auto policy? A The front windshield is shattered B The vehicle is stolen before the tow truck can tow it to the body shop C Mary's luggage in the trunk is destroyed. D The vehicle is towed to the body shop

The front windshield is shattered

Roberta shares carpool expenses with co-workers. During her turn driving to work, she is involved in an accident in which one of her passengers is injured and her car is damaged. How does her personal auto policy respond?

The insurance company will cover the auto repairs and injuries.

Which of the following statements regarding an insured's duties in the event of a loss is true? A Collision losses will only be paid if the insured was not at fault B The insurer must be allowed to inspect the damage before the repairs are made C The insured must give a proof of loss with every claim D Theft losses must prove forcible entry

The insurer must be allowed to inspect the damage before the repairs are made

Which of the following statements is TRUE regarding the termination provision? A The insurer must provide written notice to the insured for policy cancellation or nonrenewal. B The insured may only cancel the policy at renewal C The insurer may cancel or non-renew an auto policy at any time during the term of the policy D The insurer may only cancel the policy at renewal

The insurer must provide written notice to the insured for policy cancellation or nonrenewal.

An insured rents a car while on vacation in Canada and causes an accident. What coverage is provided for this loss under the personal auto policy?

The loss is covered under an unendorsed policy

Which of the following endorsements would be used to cover a motorhome or a golf cart on a personal auto policy? A The named non-owner endorsement B The auto redefined endorsement C The drive other car endorsement D The miscellaneous vehicle endorsement

The miscellaneous vehicle endorsement

Which of the following is the reason for Underinsured motorist? A The other driver has less than the state minimum B The insurer doesn't have enough insurance C The other driver doesn't have enough insurance D The insured has the state minimum

The other driver doesn't have enough insurance

If a California resident with a personal auto policy with the minimum liability limits has an accident in a state that requires higher limits, which of the following will occur? A The policy will automatically provide the required higher limits at no extra charge. B The loss is not covered. C The insured must first purchase an other states coverage endorsement D The policy will provide the higher limits, but the insured must first pay the additional premium.

The policy will automatically provide the required higher limits at no extra charge.

All of the following statements regarding Part D- coverage for damage to your auto are correct EXCEPT A This coverage covers all personal property in the vehicle. B This coverage pays for direct and indirect loss to the named insured's rental or borrowed cars C This coverage pays for direct and indirect loss to the named insured's covered auto D This coverage is commonly known as physical damage coverage.

This coverage covers all personal property in the vehicle.

A car is stolen and smashed into a tree which statement is true? A This is a collision only B This is other than collision only C This is both collision and other than collision D This is neither as theft is excluded

This is other than collision only

Which of the following would be classified as a collision? A Upset B Tree falling on the car C Striking a deer D Struck by a thrown rock

Upset

All of the following vehicles are eligible for coverage under the PAP EXCEPT A a pickup with a gross vehicle weight of 15,000 pounds B a private-passenger auto C a minivan with a 7,500 gross vehicle weight D a four-wheel drive SUV

a pickup with a gross vehicle weight of 15,000 pounds

Howard borrows his neighbor's car because his car is in the body shop after his oldest son had an accident on a trip home from college. Under Howard's automobile policy, his neighbor's car is considered

a temporary substitute automobile

A personal auto policy provides coverage for all for the following drivers of an insured car EXCEPT A a thief who steals the car B insured's child who attends school in another state C the insured's spouse D a neighbor who uses the car with the insured's permission

a thief who steals the car

Matt has just been nonrenewed by his auto insurance company because he had 3 speeding tickets and 2 at-fault accidents in the last 9 months. Matt will most likely need to obtain insurance from

an assigned risk plan

Assigned risk plans provide

auto insurance for drivers with poor driving records. The typical coverage provided for liability is the minimum amount required by state law.

Automobile comprehensive coverage insures all of the following perils EXCEPT Collision Glass Breakage Theft Fire

collision

Personal Protection Insurance coverage includes all of the following EXCEPT: A medical services for an injured person's care B death benefits of $25,000 C wage loss up to 85% for 3 years D payment of necessary services with a limit of $20 per day for three years

death benefits of $25,000

A pickup or van is eligible for PAP coverage as long as

it does not exceed 10,000 pounds gross vehicle weight. An additional requirement is that the pickup or van is not used to deliver persons or property for a fee

All of the following kinds of property are excluded from property protection insurance benefits EXCEPT A property owned by the insured whose vehicle caused the property damage B vehicles and their contents C legally parked automobiles owned by someone other than the insured driver D property damaged from accidents that occurred outside Michigan

legally parked automobiles owned by someone other than the insured driver

Part D coverage for damage to your auto covers

loss caused against collision and other than collision. It does not cover any personal property in the vehicle.

A temporary substitute automobile is

one used with the owner's permission as a substitute vehicle for the insured's covered auto while that auto is out of normal service because of breakdown, repair, servicing, loss, or destruction

The miscellaneous type vehicle endorsement to the PAP covers

recreational vehicles as well as motorcycles, motorhomes, all-terrain vehicles (ATVs), dune buggies, and similar vehicles that otherwise are excluded by the policy

The insured rear-ends another vehicle that is stopped at a red light. The driver of the car struck by the insured is badly injured. The insured, his daughter, and her friend were in the car and were also injured. Part B of the insured's personal auto policy will pay medical expenses for all of the following EXCEPT A the occupant of the car struck by the insured B the insured C the insured's daughter's friend D the insured's daughter

the occupant of the car struck by the insured