Chapter 6
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?
$49,500 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.
The Limited Mexico coverage provides coverage for how many miles into Mexico?
25 miles The limit is 25 miles and the endorsement also applies only if the insured's visit to Mexico is for 10 days or less.
Under the PAP, how long does an injured party have following an accident to report a Medical Payments claim?
3 years
Under Uninsured Motorist Coverage of the Personal Auto Policy, which of the following would be an insured?
A family member, occupying an insured auto struck by an uninsured vehicle
Which of the following would not be covered under a Personal Auto Policy?
A motorcycle Generally, vehicles that have fewer than 4 wheels are excluded from coverage.
Under the Personal Auto Policy, medical payments do not apply to passengers occupying which of the following?
A van used in the insured's business in the course of employment Workers' Compensation coverage is an exclusive remedy for injuries incurred in the course of employment. Therefore, these injuries are excluded under Medical Payments coverage.
Which of the following vehicles is not considered an uninsured vehicle under Part C of the PAP?
A vehicle owned by the government
A Personal Auto Policy is designed to cover:
An individual's or family's personal use of an auto
Under the Personal Auto Policy, when the insured and the insurer do not agree on the insured's legal right to recovery of damages or the amount recoverable by the insured, what system is used to resolve the disagreement?
Arbitration The policy allows arbitration of a disagreement between the insurer and the insured as to whether that insured is legally entitled to recover damages, or as to the amount of damages recoverable.
Which of the following is not a valid reason to cancel a personal auto policy after the first 60 days of coverage?
Claims history Claims history is often a reason for non-renewal of an automobile policy, but not for a mid-term cancellation.
Physical damage to the insured auto that is not covered under collision, and is not otherwise excluded, would be covered under:
Comprehensive The Other than Collision coverage, also known as Comprehensive, provides coverage for damages not caused by collision and not excluded in the exclusions.
Part D of the Personal Auto Policy provides which of the following coverages?
Coverage for Damage to Your Auto
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?
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.
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?
Coverage is provided on an excess basis
The Named Non-owner endorsement:
Covers only the person named on the endorsement The Named Non-Owned endorsement provides liability, medical payments, and UM coverage for a person who does not own, but often borrows or rents a car.
Which of the following damages would be covered under the Liability Coverage of the Personal Auto policy?
Damage caused to a rented garage by the insured auto Liability coverage for property rented to, or in the care, custody, or control of the insured is very limited. Damage to a rental car would be covered by either collision or comprehensive coverage as applicable.
Collision Coverage under Part D of the Personal Auto Policy would cover which of the following?
Damage to the insured auto's bumper sustained when the auto crashed into a tree
Regarding Medical Payments under the Personal Auto Policy, the liability limit shown in the Declarations is the maximum the policy will pay for which of the following?
Each person injured in any one accident
All of the following are true about a newly acquired additional vehicle, except:
It can be used to transport goods for hire if receipts are less than $10,000
If Policyholder J has no added endorsements, under which of the following scenarios will Policyholder J's injuries be covered by her Personal Auto Policy under Medical Payments Coverage?
J was driving her own car from the Post Office after retrieving her employer's mail Business use of private passenger cars is NOT excluded under Medical Payments Coverage.
Which of the following Part D claims would be denied under the Personal Auto Policy?
Loss to the covered auto caused by road damage to tires
Which of the following vehicles is covered by Liability coverage under the Personal Auto Policy?
Non-owned golf cart Non-owned golf carts are exempted from the exclusion on off-road vehicles, and liability arising from their use would be covered under the policy.
Which statement is not correct about the Right to Recover Payment under the PAP?
The Right to Recover is an insured's right The Right to Recover is a right given by the insured to the insurer after the insurer paid a claim.
Choose the false statement about Medical Payments coverage under the Personal Auto Policy.
The policy limit is applied on a per occurrence basis, not per person
Policyholder G wants her PAP to insure her sedan, primarily used for sales calls, her husband's SUV for car-pooling, the station wagon that their daughter uses to drive to school, and the van their son uses part-time to deliver dry-cleaning. Which of the following cars will G's agent tell her is not eligible?
The van While car-pooling and sales calls are acceptable business uses under the personal auto policy, business deliveries are not.