Chapter 2: Personal Insurance Coverages
How does the Auto Medical Payments Coverage endorsement modify the auto policy? A: It adds medical payment coverage to a commercial auto policy B: C: D:
A
If an Auto Policy has split limits of 30/50/25, how much will the policy pay for property damage in a single accident? A: $25,000 B: $30,000 C: $50,000 D: $10,000
A
If an insured is injured while driving his own car, what coverage in his personal auto policy will pay for the loss? A: Part B: Medical Payments B: Part A: Liability Coverage C: Part D: Coverage for Damage to Your Auto D: Part E: Duties after an Accident or Loss
A
Section I of a boatowners policy covers? A: Physical damage B: Liability C: Medical payments D: Death
A
What is a combined limit in an auto insurance policy? A: The maximum amount the insurer will pay on a covered loss B: C: D:
A
What losses are excluded from coverage in the liability section of the Personal Auto Policy? A: Intentional injury or damage, damage to property owned or transported by the insured, use of a public conveyance, or use of a vehicle without permission B: C: D:
A
A boatowners policy does NOT cover? A: Nuclear hazards B: Damage to the boat and trailer C: Liability D: Medical payments
A: Boatowners policy covers property, liability, and medical payments
All of the following statements regarding a boatowners policy are true EXCEPT? A: Replacements for the boat listed in the declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium B: Watercraft liability protects up to specified limits for claims against a "covered person" for damages due to bodily injury caused by a watercraft C: Physical damage coverage is provided on an actual cash value basis (ACV) D: Perils are insured on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured
A; Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 45 days of purchase and pays any additional premium required
With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto? A: A vehicle that is titled to another person, but is being used with permission by an insured B: A vehicle leased to the named insured for 12 months by a leasing company C: A vehicle that is titled and insured by the named insured, but is driven principally by the named insured's son, who is resident of the household D: A vehicle rented for the insured's personal use
A; Because pf the personal auto policy provides coverage on both owned and nonowned autos, situations will exist in which two or more polices will apply in a given situation. If the auto is owned and insured by someone other than the operator, then that policy will be primary coverage for that auto, and the operator's insurance would act as excess
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? A: $6,000 would be paid under other-than-collision coverage B: $3,000 would be paid under other-than-collision; $3,000 would be paid under collision coverage C: $6,000 would be paid under collision coverage D: This would not be a covered loss
A; Because the proximate cause of the loss was contact with an animal, all of the damages would be paid under other-than-collision coverage
How much coverage can be available for watercraft damage in the homeowners policy? A: Up to $1,500 B: Unlimited amount C: No more than $1,000 D: Homeowners policies do not cover watercraft
A; Homeowners policies limit the amount of property and liability coverage available for watercraft. Only $1,500 of coverage is provided in the homeowners policy for damage to watercraft, accessories, equipment and trailers, and liability for watercraft is limited by the size of the boat
Transportation expenses are covered under a Personal Auto Policy for? A: $25 per day, for a maximum of $500 B: $50 per day, for a maximum of $500 C: $50 per day, for a maximum of $750 D: $15 per day, for a maximum of $450
D; Other than Collision coverage provides $15 a day for a maximum of $450 following the theft of the entire auto, providing the auto is not recovered within 48 hours
Which of the following is covered under the physical damage coverage of a personal auto policy? A: A covered auto seized and destroyed by a government authority B: A cellular phone in a locked vehicle C: Custom furnishings or equipment in a pickup or van D: Sound reproduction equipment permanently installed in the covered auto
D; Sound reproduction equipment is covered if installed by the manufacture or installed later where the manufacturer would have installed equipment
If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? A: Umbrella policy B: Excess policy C: General Liability policy D: Auto policy
D; The underlying policy is the primary liability policy. In this scenario, it's the insured's personal auto policy
Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? A: The insured is struck by another vehicle while crossing the street B: The insured is injured while driving his motorcycle on his resident premises C: The insured's friend is injured in an accident while riding as a passenger in the insured's car D: The insured's mother is injured while exiting from the insured vehicle
B; Coverage does not apply when the insured is occupying a vehicle with fewer than 4 wheels
Extended nonowned coverage endorsement in a PAP broadens which of the following coverages? A: Physical damage B: Liability and medical payments C: Transportation expenses D: Uninsured motorist
B; This endorsement can broaden the liability only, or liability and medical payments coverage provided in the policy for individuals specifically named on the endorsement
All of the following is a covered auto in a Personal Auto Policy EXCEPT? A: A $350 trailer owned by the name insured B: A vehicle shown in the policy declarations C: A vehicle furnished for regular use of the named insured by the insured's employer D: A non-owned vehicle used by the insured when their covered auto is being serviced
C
If an auto policy has split limits of 30/50/25, what is the max amount the policy will pay for injuries to one person in a single accident? A: $10,000 B: $25,000 C: $30,000 D: $50,000
C
Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? A: 90 days B: 1 year C: 3 years D: 5 years
C; A coverage requirements in the policy states that medical expenses must be incurred within 3 years of the accident. The services also must be rendered within that time period
The medical payments coverage in a personal auto policy will pay reasonable ,edical expenses for all of the following EXCEPT? A: The insured's child sustains injuries when the car she is accidentally rolls down a hill B: A friend is injured while driving the insured's vehicle with permission C: The insured is injured while exiting a friend's mobile home D: The insured is injured by a motor vehicle while crossing the street
C; Medical payments only provide coverage to the insured and any passengers in the insured's vehicle. Injuries to other persons are covered by a personal auto policy (PAP) liability coverage
If a pilotage and towing firm is responsible for damage done to the vessel while the vessel is under its control, who is liable for the damage? A: The vessel's assured B: The insurer of the vessel C: The vessel's owners or managers D: The insurer of the pilotage and towing firm
D
If an Auto Policy has split limits of 30/50/25, what is the maximum amount the policy will pay for injuries to one person in a single accident? A: $75,000 B: $25,000 C: $50,000 D: $30,000
D
If cargo is damaged short of destination, Lloyd's agent at an intermediate port may agree to sell at best price, with settlement based on the difference between insured value and net proceeds of the sale. This is considered? A: Sue and Labor B: A particular average C: A general average D: a salvage loss
D
The Personal Auto Policy may be used to insure all of the following, except: A. A farm pickup B. A station wagon C. A conversion van D. A motorcycle
D
What is the deductible of a personal liability umbrella policy called? A: The PIL B: The CGL C: The CPP D: The SIR
D
What would be considered a newly acquired auto? A: B: C: D: A vehicle acquired by the insured during the policy period
D
Who is considered insured under Part A: Liability of a personal auto policy? A: B: C: D: The vehicle owner or his/her family member, or any person using the covered auto with permission
D
All of the following are true regarding physical damage coverage EXCEPT? A: The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle B: Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limits to $1,500 C: The policy will pay up to $20 per day up to a maximum of $600 for rental transportation D: The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible
A; The limit of liability is the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile? A: Collision B: Other-than-collision C: Property damage liability coverage D: Comprehensive coverage
A; The policy defines collision as the upset or impact of a covered vehicle with another vehicle or object
Extended nonowned coverage endorsement in a PAP broadens which of the following coverages? A: Liability and medical payments B: Transportation expenses C: Uninsured motorists D: Physical Damage
A; This endorsement can broaden the liability only, or liability and medical payments coverage provided in the policy for individuals specifically named on the endorsement. It provides coverage for nonowned autos that are available for the regular use of the insured, the use of covered vehicles to carry persons or property for a fee, or use of the vehicle in other businesses (excluding automobile business
If an auto policy has liability limits of 40/60/20, what would be the equivalent combined single limit? A: $80,000 B: $20,000 C: $60,000 D: $40,000
A; combined total of coverage for bodily injury and property damage
Zachary is the proud owner of a 1998 sports car to which he has added a high-performance engine costing several thousand dollars. Zachary has added an endorsement to his auto policy which will provide coverage against loss or damage to the engine. This type of endorsement is known as? A: Damage to Your Auto (Customized Equipment) B: Extended transportation Expenses C: Miscellaneous Coverage D: Extended Liability Coverage
A; separate endorsements are used to provide coverage for sound equipment, customizing equipment and other property
The American Institute's Hull Clause for the Return of Premiums will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be retuned for? A: Each 30-day period B: The first 10 days C: The first 30 days only D: Each 10-day period
A; the American Institute Hull Clause (AIHC) standard condition states that the premium will be returned on a pro rata basis for each 30 consecutive day period laid up in the port not under repair and not being used for storage or lighting
What Personal Auto Coverage would pay for the insured's travel expenses and loss of earnings while the insured is involved in the settlement process of a covered loss? A: B: Part A: Liability C: D:
B
What does the term "you" refer to in a personal auto policy? A: B: The named insured shown in the declarations and insured's spouse (if resident of the same household) C: D:
B
What coverages are available in the physical damage section of the personal auto policy? A: B: Collision and Other-than-collision coverages C: D:
B;
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT? A: Up to $250 for bail bonds required because of a covered accident B: Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident C: Up to $200 a day for loss of earnings due to attendance at hearings or trials D: Premiums on appeal bonds in any suit the insurer defends
B; A personal auto policy does not pay for the cost of the release of a vehicle impounded by a law enforcement agency
An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy? A: A station wagon that is used personally B: A two-ton grain truck with a 6,500-pound capacity C: A two-wheeled trailer designed to be towed by the station wagon D: A farm pickup with 1,000-pound capacity
B; A two-ton truck weighs 4,000 pounds. With its cargo weight of 6,500 pounds, it exceeds the 10,000-pound gross vehicle weight (GVW) limit and would not be able to be eligible. The GVW is the maximum recommended weight, including the weight of the vehicle, fuel and fluids, passengers and all cargo
Which of the following statements is NOT true regarding a personal umbrella liability policy? A: It provides excess liability coverage over underlying personal liability B: It provides erors and omissions coverage for an agency C: It may cover certain exposures not provided under the primary layer D: It may require the payment of a self-insured retention
B; Errors and omissions coverage is only in a professional liability policy
In a personal auto policy, the medical payments coverage is similar to? A: Bodily injury coverage, because it provides legal protection if the insured causes injuries to others B: Accident insurance, because it pays medical expenses regardless of fault C: Accident insurance, because it has the same limits D: Bodily injury coverage, because it pays the insured's doctor bills
B; Medical payments will pay for accidental bodily injury of an insured, regardless of fault or auto. It will pay medical expenses of others occupying the insured auto
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT? A: Liability B: Physical Damage C: Uninsured motorist D: No-fault medical payments
B; Subrogation rights do not apply to physical damage coverage if the damage is caused by a person using the auto with a reasonable belief that they were entitles to do so
All of the following are true regarding physical damage coverage EXCEPT? A: The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible B: The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle C: Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limited to $1,500 D: The policy will pay up to $20 per day up to a maximum of $600 for rental transportation
B; The limit of liability is the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
When would uninsured motorist coverage apply? A: When the insured is legally liable B: When the other party is legally liable but has no insurance C: When the insured drives an uninsured vehicle D: When the insured is legally liable but does not have sufficient coverage
B; Uninsured motorist coverage applies only if the other driver is at fault but has no coverage
As you leave the dock in your yacht, you carelessly cut in front of another yacht, causing its crew to change course. They run into a buoy damaging their boat. What coverage takes care of the damages? A: The other boat's hull policy B: Your P&I C: Your Inchmaree clause D: The collision clause of your hull policy
B; Your protection and indemnity coverage pay's for damage to other vessels not caused by collision. The collision clause of your hull policy would pay for damage to other vessels you collide with
Underinsured Motorist (UIM) coverage will pay the difference between which 2 limits? A: Only the at-fault driver's insurance bodily injury limits B: The insured's UIM limits and the at-fault driver's insurance bodily injury limits C: Neither because they dint have enough coverage D: Only the insured's UIM limits
B; it helps compensate for insufficient coverage
In Personal Auto Policy, to what geographical region does the out-of-state coverage apply? A: Only the U.S. States and Mexico and Canada B: Any U.S. State as well as Mexico C: Any U.S. State or Territory as well as Canada D: Only in the U.S.
C
What Personal Auto coverage would pay for damages to a covered auto caused by a collision with a deer? A: Uninsured motorist coverage B: Collision coverage C: Other-than-collision coverage D: Property damage coverage
C
What type of auto coverage will apply in a hit-and-run accident where the driver cannot be identified? A: B: C: Uninsured Motorist D: Underinsured Motorist
C
Which of the following is NOT true if ownership changes, voluntary or otherwise? A: If the vessel already has sailed from her loading port, automatic termination may be deferred until arrival at the final port of discharge B: If involuntary temporary transfer occurs without prior written agreement by the assured, automatic termination shall occur 15 days after transfer C: If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge D: The ocean marine policy shall terminate automatically at the time of ownership change
C
Which of the following personal auto coverages would apply for damage caused by a bird hitting the windshield? A: Uninsured motorist coverage B: Collision coverage C: Other-than-collision coverage D: Property damage coverage
C
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? A: They increase based on the state laws B: They decrease based on the state law C: They do not change D: They do not apply
C; The minimum liability limits do not change when a vehicle travels from state to state and remain the same regardless of the state the vehicle is in
While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? A: Any auto furnished for the insured's regular use, but not named on the policy B: Any vehicle while located inside a racing facility for the purpose of racing C: Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair D: Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle
C; The temporary auto coverage provision allows auto policy to provide coverage for an insured while using 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's regular use
An uninsured motor vehicle includes all of the following EXCEPT? A: A vehicle which flees a hit-and-run accident B: A vehicle not covered by an auto insurance policy C: A vehicle that has no liability bond in force D: A vehicle owned and operated by a self-insurer
D; An uninsured motor vehicle does not included vehicles owned and operated by self-insurers, UNLESS the self-insurer becomes insolvent
A common exclusion found under physical damage to your auto includes? A: Glass breakage B: Riot or civil commotion C: Towing and labor D: Mechanical breakdown
D; Damage due to wear and tear, freezing, mechanical or electrical breakdown and road damage to tires are common exclusions to the physical damage coverage section
If the underwriters direct a vessel to proceed to a particular port for repair, who pays the expenses, including wages and maintenance, of doing so? A: The assured B: The crew C: The owners of the vessel D: The insurer
D; If the underwriters direct the vessel to proceed to a particular port for repair, the insurer will pay the expenses of doing so, including wages and maintenance for the master, officers and crew
A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto liability? A: The driver's policy will act in excess of the passenger's policy B: The passenger's policy would be primary C: Both policies will share equally in the loss D: The driver's policy would be primary
D; Medical payments coverage pays all necessary medical and funeral expenses incurred and services rendered to the insured or passengers in the insured's vehicle, regardless of fault.