CH 6 Personal Auto

A private passenger auto includes a leased vehicle as long as the lease contract is continuous for how many months duration? A 6 B 3 C 9 D 12

A. A lease for less than 6 months is not considered a private passenger auto eligible for coverage under the Personal Auto Policy.

Under the PAP, a temporary substitute would be covered if used: A While an insured auto needs servicing B To test drive new models C To pick up a new refrigerator that will not fit in the family car D Because the insured's auto is an automatic, and their daughter wants to learn to drive manual

A. A temporary substitute is a covered auto as long as an owned car is out of normal use due to breakdown, repair, servicing, loss, or destruction.

The definition of an uninsured motor vehicle under the Personal Auto Policy includes all of the following, except: A A vehicle newly acquired by the named insured that has not been reported to the insurer B A hit and run vehicle that cannot be identified C A vehicle insured by an insolvent company D A vehicle for which there is no liability policy

A. A vehicle newly acquired by the named insured that has not been reported to the insurer

An uninsured motor vehicle is any of the following, except: A A company car B A vehicle that does not have insurance C A vehicle with liability limits less than the state requirement D A vehicle insured by an insolvent insurance company

A. Besides a company car, a vehicle owned by the insured or a family member, or a vehicle furnished or available for the regular use of the named insured or a family member, is not considered an uninsured vehicle.

Which of the following is not a duty of the insured if the insured's vehicle is damaged when it hit a tree? A Call the police B Submit to a physical exam C Promptly notify the insurance company D Submit a proof of loss

A. Calling the police is only a duty when seeking uninsured motorist coverage.

S carries a Personal Auto Policy with Liability limits of 50/100/25. What is the maximum the policy will pay if S struck another vehicle causing injury to the occupants as follows: Driver - $70,000; Passenger 1-$30,000; Passenger 2-$50,000 and property damage to the other vehicle - $20,000? A $120,000 B $170,000 C $150,000 D $125,000

A. Coverage is as follows: Driver - $50,000; Passenger 1 - $30,000; Passenger 2 - $20,000, since the policy will only pay $50,000 per person and a total of $100,000 per accident. The property damage is fully covered, totaling $120,000.

Which of the following vehicle uses is not excluded under Personal Auto Medical Payments? A Livery B Racing C Farm use D Occupying a vehicle as a residence

A. Farm use is not listed as an exclusion as all other choices are.

After an automobile policy has been in effect for 60 days, the insurer may cancel the policy for any of the following reasons, except: A Submission of four or more claims during a single policy period B Non-payment of premium C Suspension of the driver's license of the named insured's or household resident D Material misrepresentation of information on the application by the insured

A. Generally, claims history is a valid reason for an insurer to nonrenew a policy, but it is NOT a valid reason to cancel a policy.

Under Part D, Within how many days must an insured report the purchase of a new vehicle that is replacing an existing vehicle covered by collision coverage? A 14 B 15 C 4 D 5

A. If a vehicle covered by Part D coverages is replaced by a new car with the same coverage, the policy will automatically extend coverage for 14 days.

Which of the following is FALSE about a claim payment for a Part D under Personal Auto? A If the insurer returns a stolen car to the insured, it doesn't have to pay claims for vehicle damage B The insurance company can keep or return a stolen car C The claim payment will include any applicable sales tax D The insurance company can decide whether to pay cash or repair the vehicle

A. If the insurance company returns a stolen car to the insured, it must pay for any damage that occurred as a result of the theft.

Under a policy with limits of 25/50/10, what would be the insurer's liability arising out of a single accident where claimant A has injuries in the amount of $25,000; claimant B, $20,500; and claimant C $4,000? A $49,500 B $25,000 C $50,000 D $85,000

A. The policy would pay up to the BI limit of $25,000 for A; $20,500 for B; and $4,000 for C. $25,000 + $20,500 + $4,000 = $49,500.

Liability coverage under the PAP will cover which of the following? A Non-owned golf cart B A van used to deliver newspapers C Motorcycle D Company car

A. Vehicles designed mainly for use off public roads are excluded, except for non-owned golf carts.

Temporary Substitute

Any auto or trailer that is non-owned while being used in place of an insured vehicle which not available because of breakdown, repair, servicing, loss, or destruction.

Which of the following vehicles is not considered an uninsured vehicle? A A vehicle insured for less than the state's minimum required coverage B A vehicle owned by the government C A vehicle whose coverage is denied by its insurer D A vehicle that disappears after it hits and runs

B . Government vehicles are not included in the definition of an uninsured vehicle.

A ____________vehicle is a covered vehicle when Your Covered Auto is being repaired due to a covered loss. A Replacement B Temporary substitute C Substitute D Conditional

B. A temporary substitute is also covered if the vehicle is out of normal use due to breakdown, servicing, loss, or destruction.

Other Than Collision coverage would cover losses to an insured vehicle caused by all of the following, except: A Fire B Driving into a tree C Larceny D Hail

B. Collision means the upset of the covered auto or its impact with another vehicle or object. Damage caused by the running into a tree would be covered under Collision coverage.

Each of the following is a Part A - Liability Coverage Supplementary payment, except: A $250 for the cost of a bail bond B Payment for all defense costs C $200 a day for loss of earnings due to an insurer request to assist in the trial D Premiums on appeal bonds

B. Payment for all defense costs is part of the Part A - Liability Coverage Insuring Agreement, which also includes payment for bodily injury or property damage for which the insured is legally responsible.

The limit of liability is the most paid by the insurer regardless of all of the following, except: A Number of vehicles involved B Amount of surcharges to be applied to policy C Premiums shown D Number of insureds

B. The amount of surcharge to be applied to the policy is not linked to the limit of liability.

What is the purpose of the Extended Non-Owned Coverage for a Named Individual endorsement? A Covers an individual who does not own a car B Covers non-owned vehicles furnished for the insured's regular use C Extends coverage for a leased vehicle D Coverage is extended 25 miles into Mexico

B. This endorsement provides excess coverage over the primary coverage insuring the non-owned vehicle.

Under Uninsured Motorist Coverage of the Personal Auto Policy, which of the following would be an insured? A The owner of an uninsured motor vehicle involved in an accident with the insured B A family member, occupying an insured auto struck by an uninsured vehicle C The operator of an uninsured motor vehicle involved in an accident with the insured D A family member occupying an uninsured auto

B. Uninsured Motorists Coverage provides liability coverage for an uninsured vehicle involved in an accident with an automobile occupied by the insured or a family member. However, it provides no protection for the owner or operator of the uninsured auto.

Choose the true statement regarding Out of State Coverage in the Personal Auto Policy. A When being used in any state other than the one in which the vehicle is licensed, the liability limits are automatically the minimum financial responsibility limits of the state in which the vehicle is licensed B The insured should be sure that the liability limits of the policy equal or exceed the minimum limits of the compulsory insurance or financial responsibility laws of any other state where the vehicle might travel C The limit of liability will be the same as the coverage provided in the home state or the minimum liability requirements in the state where the covered auto is being used, whichever is greater D The liability limits of the policy will be the lesser of home state coverage or the minimum liability requirement of the state in which the vehicle is being used

B. When the covered auto is operated in a state other than that in which it is licensed, the limits of the policy are not less than the contracted amounts or the minimum required by the state in which the vehicle is being used.

Supplementary Payments

Bail Bond - $250 Defending a suit - insurer pay premium on appeal bonds Interest accumulate after a judgement - insurer pays if it defends a suit Attendance of hearing or trials - $200 a day for loss of earnings Reasonable expense, not include traffic fines

Which of the following is covered under Part C - Uninsured Motorist Coverage? A A family member is struck by an insured vehicle B The insured is also covered by Workers' Compensation C Accident was caused by a hit-and-run driver D Punitive damages awarded for the insured

C. A hit-and-run vehicle can't be identified and is therefore considered uninsured.

Which of the following vehicles IS covered under Part B - Medical Payments of the PAP? A A van used as a residence B 3-wheel vehicle used off-road C A car used to carpool with colleagues D A company car issued to a family member

C. A share-the-expense vehicle is not considered a public or livery conveyance, and is therefore not excluded under the policy.

Which statement is true of medical payments in a Personal Auto Policy? A Medical payments are provided by Part A B Medical expenses include insured's injuries that result from racing activity C Expenses for medical services sustained by the insured are covered D Medical expenses are paid only when the insured is legally liable

C. Expenses for medical services sustained by the insured are covered

All of the following are true of the Personal Auto Policy, except: A It provides insurance for vehicles with a gross vehicle weight of 10,000 pounds or less B It provides no-fault in states that require it C It is written only with split limits of liability D It provides no coverage for personal effects in the vehicle

C. Limits of liability may be either split or single. Personal effects would be covered by the owner's homeowners or renter's policy.

Under Part F of the Personal Auto Policy, the Legal Action Against Us provision states that: A Legal action against the insurer is permitted only when arbitration is unsuccessful B Legal action brought against the insurer must be brought within 90 days of the loss C Legal action may not be brought against the insurer until the insured has complied with all the terms of the policy D Legal action brought against the insurer must be brought within 180 days of the loss

C. No legal action may be taken against the insurance company by anyone unless he/she has complied fully with the policy. In addition, no one may sue the insurance company until it agrees in writing that the insured has a legal obligation to pay for damages.

Claimant A has bodily injuries in the amount of $49,500; claimant B, $19,500; and claimant C $14,000 arising out of a 4-car accident caused by the insured, whose PAP carries limits of 25/50/10. What will the insurer pay? A $83,000 B $14,000 C $50,000 D $49,500

C. Regardless of the individual claim amounts, because the total of the individual claims ($83,000) exceeds the per accident limit of $50,000, the insurer's liability is limited to $50,000 for all three claimants.

Comprehensive covers all of the following losses, except: A Theft B Falling objects C Rollover D Contact with a deer

C. Rollover and hitting another vehicle or object are covered by collision coverage.

Which of the following is an insured's duty in the event of loss under the PAP? A Refer the claim adjuster to an attorney B Call the police if legal papers are received C Promptly notify the police in the event of a hit-and-run accident D Contact the at-fault party

C. The insured must cooperate with the insurer, promptly notify the insurance company of a loss, and immediately send legal papers to the insurer.

The insurer's limit of liability for a vehicle damaged by a loss under Part D is which of the following? A Actual cash value B Replacement value C The lesser of actual cash value and replacement value D The greater of actual cash value and replacement value

C. The insurer's limit of liability for loss is the lesser of the actual cash value (ACV) of the vehicle and the amount necessary to repair or replace the vehicle with another of like kind and quality.

The Limited Mexico coverage provides coverage for how many miles into Mexico? A 50 miles B 10 miles C 25 miles D 100 miles

C. The limit is 25 miles and the endorsement also applies only if the insured's visit to Mexico is for 10 days or less.

A Medical Payments claim will be paid by the insurer within how many months from the date of the occurrence? A 24 B 18 C 60 D 36

D. A Medical Payments claim will be paid within 3 years for reasonable expenses for medical and funeral expenses regardless of fault.

If an insurer non-renews an insured's policy for underwriting reasons, what is the minimum number of days' notice to the insured? A60 B 30 C 45 D 20

D. At least 20 days' notice is required.

Which of the following uses of a vehicle is not excluded under the Medical Payments coverage? A An insured drives a company car B An insured rides a motorcycle C A neighbor uses the insured's car without permission D Insured uses a truck for incidental purposes

D. Bodily injury sustained by an insured isn't covered if the insured is using a vehicle while engaged in business. However, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles. This exclusion applies to the business use of trucks and other commercial vehicles.

A temporary substitute vehicle is not a covered auto if used to substitute for which of the following? A Recently purchased van B Owned trailer C An owned car D Rental car

D. Rental Car. To be eligible for coverage, a temporary substitute vehicle may only be used in place of a vehicle described in the policy.

Supplementary payments under Part A of the Personal Auto Policy will pay which of the following? A A judgment against the insured in excess of liability limits B Doctor bills when the insured is injured in an auto accident C Loss of earnings when the insured is disabled D $250 for bail bonds

D. Supplementary payments include bail bonds payments up to $250.

Coverage for recreational vehicles can be added to the Personal Auto Policy by the: A Recreational Vehicles Endorsement B Named Non-Owner Endorsement C Cross Terrain Endorsement D Miscellaneous Type Vehicle Endorsement

D. The Miscellaneous Type Vehicles coverage includes recreational vehicles.

Under a Personal Auto Policy, which of the following is true of liability for bodily injury resulting from the insured's use of a non-owned auto? A Coverage is shared pro rata between the insured's policy and the policy on the vehicle B Coverage is provided under Part C C It is not covered because of the care, custody and control clause D Coverage is provided on an excess basis

D. The owner's coverage is primary and the driver's coverage is excess.

Which of the following is covered under a Personal Auto Policy? A Intentional damage done by the insured B Use of a non-owned vehicle used without permission C Liability for damage caused by a vehicle designed mainly for off road use D A vehicle driven with permission by an unlicensed driver

D. The policy defines insured as used in Part A, as the named insured or another person using the covered auto with permission, even if not licensed.

Which statement is false regarding the Personal Auto Policy? A Uninsured Motorist Coverage is provided by Part C B The PAP provides medical payments for up to 3 years C Collision coverage will cover damage to the insured vehicle regardless of liability D Theft is covered under property damage liability

D. Theft is covered under physical damage (Part D), not property damage liability (Part A).

Newly Acquired Auto - Part D Coverage (Coverage for Damage to your Auto)

If its an additional vehicle, must be reported or coverage ends between 4 to 14 days If Dec page indicate Collision applies to at least one vehicle, insured has 14 days to report, coverage ends after 14 days. If Dec page indicates NO Collision coverage, insured has 4 days to report or coverage ends.

Company A's per person Limit of Liability is $100,000 and Company B's is $200,000 for the same insured. How much will Company B have to pay for a covered $6,000 loss caused by the insured? A $6,000 B $4,000 C $2,000 D Zero

If other auto liability insurance applies, each policy will pay its proportionate share of the loss. Company B's limit is 2/3 of the total coverage by both policies. 2/3 of the total loss of $6,000 = $4,000.

Newly Acquired Auto - All Coverage Except Part D (Coverage for Damage to your Auto)

If tis an additional vehicle, must report to insurer within 14 days If its a replacement auto, covered for liability and medical, not coverage for collision and comprehensive even if insured does not report

Part A - Liability Coverage Part B - Medical Payments Part C - Uninsured Motorist (UM)

Part D - Coverage for Damage to Your Auto Part E - Duties after an accident or loss Part F - General Provisions

100/300/100

- 100,000 per person for bodily injury - 300,000 per accident for bodily injury - 100,000 per accident for property damage (other drivers car and landscaping)

Part D - Coverage for Damage to your Auto Transportation Expense

- Insurer will pay Max $20/day, up to $600 for transportation expense for collision and comprehensive loss. - If Theft, insurer will pay expenses incurred after 48 hours of theft and stop when auto is returned or insurer pays for the loss. - If loss is caused by a peril other than theft, payment to expense begins when auto is withdrawn from use for more than 24 hours.

Which of the following is included in the Personal Auto Policy's coverage territory? A The U.S., its territories, Canada, and Puerto Rico B The U.S., its territories, Canada, Puerto Rico, and Mexico C Anywhere location worldwide D The U.S. and its territories only

. The policy only provides coverage for accidents and losses that occur during the policy period and within the policy territory. The policy territory is the United States of America, its territories and possessions, Puerto Rico, and Canada, and while being transported between their ports. Mexico is NOT in the policy territory.