3: Meeting Personal Auto Coverage Needs

The medical payments coverage in the Personal Auto Policy (PAP) applies to Select one: A. Any person occupying a covered auto. B. Any insured who is also covered by workers compensation for the same accident. C. Anyone occupying a car not owned by any insured but driven by an insured. D. Anyone injured in an accident involving an insured.

A. Any person occupying a covered auto.

The Part B—Medical Payments Coverage of the Personal Auto Policy (PAP) contains an Other Insurance provision. If two automobile policies from different insurers cover the same owned vehicle, Select one: A. Each insurer pays its pro rata share. B. The policy with the lower limit of liability is excess. C. The policy with the lower limit of liability is primary. D. The first insurer to receive notice of the claim becomes primarily liable.

A. Each insurer pays its pro rata share.

Lisa was driving home during a snowstorm when she slid off the road and struck a fence surrounding a local farm. Which one of the following would be covered under the collision coverage of her personal auto policy? Select one: A. The medical expenses for her broken wrist B. The damage to her vehicle C. The damage that she caused to the fence D. The medical expenses for a horse that was injured by the damaged fence

B. The damage to her vehicle

An example of an uninsured motor vehicle under the Personal Auto Policy (PAP) is Select one: A. An uninsured auto owned by the named insured's spouse. B. An old bus placed on blocks and used as a home. C. A vehicle that is self-insured under state law. D. A hit-and-run vehicle with an unidentified owner that hits the named insured's covered auto.

D. A hit-and-run vehicle with an unidentified owner that hits the named insured's covered auto.

Which one of the following is an example of a supplementary payment under the liability coverage of the Personal Auto Policy (PAP)? Select one: A. Traffic violation fines B. Emergency response assessment C. Pre-verdict interest D. Cost of bail bonds

D. Cost of bail bonds

Under the liability coverage in the Personal Auto Policy (PAP), the insurer agrees to pay Select one: A. Costs incidental to claims not covered by the policy. B. Judgments for bodily injury intentionally caused by the insured. C. Judgments in excess of the liability limits. D. Defense costs incurred by the insurer.

D. Defense costs incurred by the insurer.

Katie was on vacation visiting her friend Emily. One day Katie borrowed Emily's car and collided with a deer, resulting in $3,000 damage to Emily's car. Emily and Katie each have a Personal Auto Policy (PAP) with collision and other than collision (OTC) coverages. Which one of the following would be the primary source of recovery for the damage to Emily's car? Select one: A. Katie's collision coverage B. Emily's collision coverage C. Katie's OTC coverage D. Emily's OTC coverage

D. Emily's OTC coverage

Anthony spent a number of years restoring an old show car that had belonged to his grandfather. In order to make the personal auto insurance premium for the car affordable, he selected the Maximum Limit of Liability Under the Coverage for Damage to Your Auto Endorsement with a stated amount of $50,000. In the event of a total loss to the car, the insurer's maximum limit of liability for a covered loss is limited to Select one: A. The lesser of the stated amount, actual cash value, or replacement cost value. B. The appraised value C. The greater of the stated amount or appraised value. D. The stated amount.

A. The lesser of the stated amount, actual cash value, or replacement cost value.

While backing a family car out of the driveway, Harry's 18-year-old son accidentally collides with Harry's car, which is parked on the street. Each car has $3,500 in damages. Both cars are insured on the same Personal Auto Policy (PAP), but Harry's car has a $500 collision deductible and the other car has a $1,000 collision deductible. What is the total deductible amount that Harry's PAP insurer will apply for the two vehicles? Select one: A. $500 B. $1,000 C. $1,500 D. $2,000

B. $1,000

Anna's employer provides her with a company car, which she and her husband are also permitted to use for personal use. Which one of the following endorsements should Anna consider adding to her personal auto policy (PAP) to provide excess liability and/or medical payments coverage? Select one: A. Auto Loan/Lease Coverage Endorsement B. Extended Non-Owned Coverage-Vehicles Furnished or Available for Regular Use Endorsement C. Named Non-Owner Coverage Endorsement D. Miscellaneous Type Vehicle Endorsement

B. Extended Non-Owned Coverage-Vehicles Furnished or Available for Regular Use Endorsement

An uninsured motor vehicle under the Personal Auto Policy (PAP) can mean a land motor vehicle or trailer of any type that meets any of the following criteria, EXCEPT: Select one: A. It is a hit-and-run vehicle whose operator cannot be identified and it hits the named insured's covered auto. B. It is insured by an insurer incorporated in a state that is different from the state where the accident occurred. C. A bodily injury liability policy applies to it at the time of an accident but the insurance company becomes insolvent. D. No bodily injury insurance or bond applies to it at the time of an accident.

B. It is insured by an insurer incorporated in a state that is different from the state where the accident occurred.

Jimmy lives in Maine and owns two autos which he insures under a standard personal auto policy (PAP). He is planning a family vacation to California and is curious about whether his PAP will provide any coverage for the rental vehicle in California. Which one of the following statements is correct regarding the coverage for "non-owned autos" provided under a standard PAP? Select one: A. The standard PAP will cover the cost to rent a vehicle similar to the ones he owns for up to a period of 30 days. B. Most PAP coverages, including liability, collision, and comprehensive, generally extend to rented autos used within the policy territory. C. The standard PAP will extend liability and medical payments coverage to rented vehicles, but separate collision and comprehensive coverage must be purchased for the rental vehicle.

B. Most PAP coverages, including liability, collision, and comprehensive, generally extend to rented autos used within the policy territory.

Liana insured her car with a Personal Auto Policy (PAP) that has split limits for liability coverage of $100/$300/$75. She was found by a court to be at fault for an accident that injured the other driver and ordered to pay a judgment of $98,000, plus $6,000 in prejudgment interest. How much will Liana's insurer pay under her PAP? Select one: A. $92,000 B. $98,000 C. $100,000 D. $104,000

C. $100,000

Which one of the following is an expense payable under the Part B—Medical Payments Coverage of the Personal Auto Policy (PAP)? Select one: A. Cost of bail bonds B. Lost wages C. Funeral expenses D. General damages

C. Funeral expenses

Grace owns two vehicles that are insured under her Personal Auto Policy (PAP). One of the vehicles is covered for both collision and other than collision (OTC). The other is covered only for OTC. The collision deductible is $500, and the OTC deductible is $250. Grace borrowed her neighbor Helen's vehicle one day to run an errand while both of her vehicles were unavailable. On her way home, she lost control of the vehicle and hit a tree. There were no serious injuries, but the damage to the vehicle was $5,000. Helen's PAP covers the vehicle for OTC coverage only, subject to a $250 deductible. Which one of the following statements regarding this scenario is true? Select one: A. Grace's PAP insurer will pay $4,750 for this loss. B. There is no coverage available under either Grace's PAP or Helen's PAP. C. Grace's PAP insurer will pay $4,500 for this loss. D. Helen's PAP insurer will pay $4,750.

C. Grace's PAP insurer will pay $4,500 for this loss.

Under the uninsured motorists (UM) coverage in the Personal Auto Policy (PAP), the insurer agrees to pay compensatory damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle. These damages include all of the following, EXCEPT: Select one: A. Lost wages B. Medical expenses C. Punitive damages D. Rehabilitation expenses

C. Punitive damages

Li insured his car with a Personal Auto Policy (PAP) that has split limits for liability coverage of $50/$100/$25. He was found by a court to be at fault for an accident that injured the other driver and ordered to pay a judgment of $45,000, plus $5,000 in prejudgment interest. How much will Li's insurer pay under his PAP? Select one: A. $25,000 B. $30,000 C. $45,000 D. $50,000

D. $50,000

Philip insures his car with a Personal Auto Policy (PAP). Philip's car is damaged when he is involved in an accident that is entirely caused by the driver of another car. The other car is also insured with a PAP. All of the following statements are true, EXCEPT: Select one: A. Philip can collect for this loss from his own insurer. B. Philip can collect for this loss from the insurer of the other car. C. If Philip's insurer pays, Philip's insurer can subrogate against the insurer for the other car. D. If the other car's insurer pays, the other car's insurer can subrogate against Philip's insurer.

D. If the other car's insurer pays, the other car's insurer can subrogate against Philip's insurer.

Which one of the following causes of loss is covered under the other than collision (OTC) section of the Personal Auto Policy (PAP)? Select one: A. Hitting a tree B. Hitting another car C. Overturn from the driver losing control D. Missiles or falling objects

D. Missiles or falling objects