ExamFX Auto Insurance Chapter 11
An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the third passenger. How much will the policy pay under medical payments coverage?
$14,000
Transportation expenses are covered under a Personal Auto Policy for
$20 per day, for a maximum of $600.
What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?
$25
In California, the liability for bodily injury or death to all people is a cumulative liability limit of
$30,000.
In California, the liability for damage to property is limited to
$5,000.
Jane has an auto liability policy with limits of 25/50/15. If Jane is involved in an accident caused by her negligence and is held legally liable for bodily injuries of three persons in the other auto as follows: "A" $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries?
$50,000
Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay?
$60
John has an automobile policy with limits of $50,000 per person and $100,000 per occurrence. An accident occurs and two people are injured, one with $25,000 in injuries and the other with $75,000 in injuries. If John is found responsible, what is the maximum amount his policy will pay for the injuries?
$75,000
If a person wants to include a newly-acquired auto in a policy that is already established for another vehicle, the insurer must be notified within
14 days.
Any person who claims that he or she meets the criteria based on a driver's license and driving experience acquired anywhere other than in the United States or Canada is presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada and meets the criteria for that period for at least the previous
18 months.
The rate charged for a Good Driver Discount policy should be at least what percent below the rate the insured would otherwise have been charged for the same coverage?
20%
Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within
3 years.
An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if
A joint ownership coverage endorsement is added.
Which of the following will have the broadest coverage provided for a vehicle in the Declarations?
A newly acquired auto
With respect to auto insurance, the term owned autos includes all of the following EXCEPT
A pickup or van titled to and used in the named insured's business.
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the following are acceptable forms of financial responsibility EXCEPT
A surety bond for $50,000 obtained from a company licensed to do business in California.
With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto?
A vehicle that is titled to another person, but is being used with permission by an insured
In an auto policy, the medical payments coverage is similar to
Accident insurance, because it pays medical expenses regardless of fault.
Which of the following would NOT qualify as a hired auto?
An auto borrowed from an employee
Which of the following would be eligible for the California low-cost auto insurance?
An individual with a good driving record whose income is at 100% of the federal poverty level
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?
Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair
All of the following are eligibility criteria for applicants in the CAARP EXCEPT
Anyone who does not owe money on any automobile insurance policy within the last 18 months.
An insurer has the right of cancellation/nonrenewal of an existing insurance policy for all of the following EXCEPT
Arbitrary exclusion from coverage due to age of driver and type of vehicle to be insured.
Which of the following would NOT be covered under the liability section of a personal auto policy?
Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.
Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have?
Combined single
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
Damage to your auto (customized equipment
Other than collision would cover financial losses due to
Damage to your car caused by wind or hail.
The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as
Electronic Effective Date Procedure (EEDP).
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. If you don't have acceptable financial responsibility and have an accident, you may lose your driver's license for up to
Four years
With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT
Immediately report to an emergency room for medical examination.
In a personal auto policy, Coverage C: Uninsured Motorist defines an insured person as any of the following persons EXCEPT
Injured in an auto accident.
All of the following statements are true regarding the low-cost auto insurance program in California EXCEPT
It is only available in select counties.
Which of the following is true regarding renewability of a low cost auto insurance policy in California?
It must be renewed annually.
A personal auto policy would be considered excess when an insured
Leaves his car in a parking garage and the car is involved in an accident.
Extended nonowned coverage endorsement in a PAP broadens which of the following coverages?
Liability and medical payments
A common exclusion found under physical damage to your auto includes
Mechanical breakdown.
What Personal Auto Coverage would pay for the insured's injuries sustained when struck by a hit-and-run driver while crossing a busy street?
Medical payments
How many vehicles per household can be covered by the California low-cost auto insurance program?
Not more than 2
All of the following are FALSE regarding eligibility to place business through the CAARP EXCEPT
Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications.
When would UM coverage apply?
Only when the other party is legally liable but has no insurance
Which of the following Personal Auto Coverages would pay for damage to a covered auto due to colliding with a deer?
Other than Collision (Comprehensive coverage)
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
Physical damage.
While Jake was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of Jake's auto policy would pay for the damage to the store?
Property Damage Liability
Under the Personal Auto Policy, liability for bodily injury resulting from the insured's use of a non-owned automobile is
Provided by the insured's policy on an excess basis.
All of the following are TRUE regarding the Commercial Automobile Insurance procedure (CAIP) EXCEPT
Risks requiring higher limits of $50,000 are ineligible for coverage.
Which of the following is NOT a limitation under Mexico Coverage?
Suits may be brought by either U.S or Mexican citizens.
Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?
Supplementary payments, found in Part A - Liability, include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings.
All of the following are TRUE regarding the California Automobile Assigned Risk Plan (CAARP) EXCEPT
The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program.
A driver with 10 years of experience driving an automobile has never had a traffic violation or a DUI. He is now applying for a separate motorcycle policy. He has obtained his motorcycle license 2 years ago. Which of the following is true?
The Good Driver Discount will not apply to the motorcycle.
Which of the following would be considered the most important factor in determining the rates and premiums for an applicant for an auto policy?
The applicant's driving record
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 policy?
The driver's policy will pay.
Sarah has a Personal Auto Policy with split limits of $25,000/$50,000 bodily injury coverage. She hits a pedestrian who claims damages of $30,000. What is the maximum liability of her policy for this accident?
The first limit stated in the coverage is the limit that may be paid for injuries to one person.
Which of the following losses would be covered under the property damage liability coverage of a Personal Auto Policy?
The insured damages a rented garage when he failed to stop in time.
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT
The insured is injured while exiting a friend's mobile home.
All of the following are true regarding physical damage coverage, EXCEPT
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.
All of the following are true statements regarding coverage limits of low-cost automobile insurance EXCEPT
The policy would provide coverage for physical damage.
What type of coverage protects the insured in an accident caused by a driver with insufficient coverage?
Underinsured motorist
In the Personal Auto Policy, owned trailers being towed by an insured auto are automatically covered for
Uninsured Motorists Coverage.
What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage?
Uninsured motorist
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured
Will not relieve the insurer of its policy obligations.
