Ch.6 - Personal Auto Policy (PAP)

Policyholder J hit a deer with his Honda. J has collision coverage with a $250 deductible and Other Than Collision coverage with a $50 deductible. The damage to J's car was $450. How much will the policy pay? a. $400 b. $150 c. Nothing d. $200

a. $400 [- Hitting a deer is considered an Other Than Collision (OTC) - So he has to pay a $50 deductible out of $450 in damage - The insurance company will pay $400]

If an insurer non-renews an insured's policy for underwriting reasons, what is the minimum number of days' notice to the insured? a. 20 b. 30 c. 45 d. 60

a. 20

The Limited Mexico coverage provides coverage for how many miles into Mexico? a. 25 miles b. 10 miles c. 50 miles d. 100 miles

a. 25 miles

Under medical payments coverage, how long after an accident does the insured have coverage for resulting medical expenses? a. 3 years b. 4 years c. 1 year d. 5 years

a. 3 years

A leased auto is an eligible vehicle if the lease contract is for a continuous period of at least how many months? a. 6 b. 12 c. 9 d. 3

a. 6

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 insured by an insolvent insurance company d. A vehicle with liability limits less than the state requirement

a. A company car

Of the following, which is covered under Part D - Coverage for Damage to Your Auto? a. A newly acquired vehicle added to the policy within 14 days b. Custom painting on a van c. Road damage to tires d. Radar and laser detection devices

a. A newly acquired vehicle added to the policy within 14 days

Which of the following is not eligible for a Personal Auto Policy? a. A private passenger auto used as a taxicab b. A trailer being used as a farm wagon c. A 9-passenger station wagon d. A van that is used to haul gardening supplies for personal use

a. A private passenger auto used as a taxicab

All of the following are considered uninsured motor vehicles, except: a. A vehicle that is being used as a residence b. A vehicle to which the insuring company becomes insolvent c. A hit and run vehicle d. A vehicle to which no liability policy applies

a. A vehicle that is being used as a residence

The Miscellaneous Type Vehicle Endorsement attached to a Personal Auto Policy allows eligibility of a motorcycle by: a. Amending the definition of 'your covered auto' and 'newly acquired auto' to include any miscellaneous type vehicle b. Altering the four-wheel requirement c. Adding motorcycles to the list of eligible vehicles d. Specifically naming it in the Declarations

a. Amending the definition of 'your covered auto' and 'newly acquired auto' to include any miscellaneous type vehicle

The Named Non-owner endorsement: a. Covers only the person named on the endorsement b. Does not apply to rented vehicles c. Provides only Liability coverage d. Does not meet the state's financial responsibility law requirements

a. Covers only the person named on the endorsement

7) Which of the following uses of a vehicle is not excluded under the Medical Payments coverage? a. Insured uses a truck for incidental purposes b. A neighbor uses the insured's car without permission c. An insured drives a company car d. An insured rides a motorcycle

a. Insured uses a truck for incidental purposes

Coverage for recreational vehicles can be added to the Personal Auto Policy by the: a. Miscellaneous Type Vehicle Endorsement b. Recreational Vehicles Endorsement c. Cross Terrain Endorsement d. Named Non-Owner Endorsement

a. Miscellaneous Type Vehicle Endorsement

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

a. Payment for all defense costs

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

a. Promptly notify the police in the event of a hit-and-run accident

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. $250 for bail bonds c. Loss of earnings when the insured is disabled d. Doctor bills when the insured is injured in an auto accident

b. $250 for bail bonds

Policyholder B has a business auto policy with limits of 100/300/50. In an accident for which B was liable, there were BI claims in the amounts of $80,000; $100,000; and $125,000; and PD claims of $20,000 and $35,000. How much will his policy pay? a. $305,000 BI and $55,000 PD b. $280,000 BI and $50,000 PD c. $300,000 BI and $50,000 PD d. $305,000 BI and $50,000 PD

b. $280,000 BI and $50,000 PD [ - Policy holder B has 100,000 BI per person, 300,000 BI total, and 50,000 PD total per accident - 80,000 + 100,000 + 125,000 = 305,000 total so max only 300,000 would be paid - BUT there is a 100,000 per person limit and 1 person is at 125,000 in BI claims - 80,000 + 100,000 + 100,000 (adjusted) = 280,000 in BI - As for PD: 20,000 + 35,000 = 55,000 which is 5,000 over limit - So PD = 50,000]

A private passenger auto includes a leased vehicle as long as the lease contract is continuous for how many months duration? a. 3 b. 6 c. 9 d. 12

b. 6

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

b. Accident was caused by a hit-and-run driver

Which of the following is not a duty of the insured if the insured's vehicle is damaged when it hit a tree? a. Submit a proof of loss b. Call the police c. Promptly notify the insurance company d. Submit to a physical exam

b. Call the police [You must call the police in the case of a collision]

2) A ____________vehicle is a covered vehicle when Your Covered Auto is being repaired due to a covered loss. a. Substitute b. Replacement c. Temporary substitute d. Conditional

c. Temporary substitute

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

b. Covers non-owned vehicles furnished for the insured's regular use

All of the following are false about Damage to Your Auto, except: a. The sales tax on a replacement vehicle is not covered b. In the event of total loss, adjustment will be made for the physical condition of the vehicle c. The Limit of Liability is the greater of the vehicles actual cash value or the cost to repair d. Coverage includes the cost to repair previous damage if required to fix new damage

b. In the event of total loss, adjustment will be made for the physical condition of the vehicle

Which of the following is covered under Part A of the Personal Auto Policy? a. Property damage to a company car b. Injury to an employee while away from work c. Damage caused driving a neighbor's car without permission d. Damage to property owned by the insured

b. Injury to an employee while away from work

All of the following are true about a newly acquired additional vehicle, except: a. Coverage is as broad as the broadest coverage on any vehicle under the policy b. It can be used to transport goods for hire if receipts are less than $10,000 c. It must be reported to the insurer within 14 days of purchase d. It may be used on a farm

b. It can be used to transport goods for hire if receipts are less than $10,000

The Personal Auto Policy applies: a. Anywhere in the world b. Only in the U.S., its territories, Canada, and Puerto Rico c. Only in the U.S., its territories, Canada, Puerto Rico, and Mexico d. Only in the U.S. and its territories

b. Only in the U.S., its territories, Canada, and Puerto Rico

Under a PAP, liability resulting from the insured's use of a non-owned auto is: a. Shared pro rata between the insured's policy and the policy on the vehicle b. Provided on an excess basis c. Not covered because of the Care, Custody and Control Clause d. Provided on a primary basis

b. Provided on an excess basis

A temporary substitute vehicle is not a covered auto if used to substitute for which of the following? a. Owned trailer b. Rental car c. An owned car d. Recently purchased van

b. Rental car

Which statement is not correct about the Right to Recover Payment under the PAP? a. The person who is paid a claim must give the insurance company the right to recover damages b. The Right to Recover is an insured's right c. The insured must reimburse the insurance company if the insured is paid by the other party d. The right to recover involves going after the negligent party to pay for the insured's loss

b. The Right to Recover is an insured's right [It is an Insurer's right]

When an auto has two auto policies with the same insurer, the insurer's liability would not exceed: a. The limit of the first one purchased b. The highest limit of the two policies c. The limit of the last one purchased d. The combined limit of the two policies

b. The highest limit of the two policies

30) Which of the following is covered under Part D of the Personal Auto Policy? a. Damage to a van used as a livery b. Water or flood damage to a convertible when the top is left down c. Theft loss to a portable CD player d. Damage to a radar detector

b. Water or flood damage to a convertible when the top is left down

Transportation expenses resulting from a collision or OTC loss will be paid up to what amount under Part D of the PAP? a. $200 b. $500 c. $600 d. $1,000

c. $600

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. 4 b. 5 c. 14 d. 15

c. 14

A Medical Payments claim will be paid by the insurer within how many months from the date of the occurrence? a. 18 b. 24 c. 36 d. 60

c. 36 (3 yrs)

All of the following are excluded under Part A of the Personal Auto Policy, except: a. Intentional damage caused by the insured b. Use of a non-owned vehicle without permission c. A vehicle driven by an unlicensed driver d. Damage caused by a vehicle designed mainly for off road use

c. A vehicle driven by an unlicensed driver

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

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

Which of the following is not true about a claim payment for a Part D under Personal Auto? a. The insurance company can keep or return a stolen car b. The claim payment will include any applicable sales tax c. If the insurer returns stolen property to the insured, no payment for damages incurred will be made d. The insurance company can decide whether to pay cash or repair the vehicle

c. If the insurer returns stolen property to the insured, no payment for damages incurred will be made

While driving in another state with higher coverage requirements, which of the following sections of the PAP automatically provides the required coverage? a. Automatic Extension of Coverage b. Other Insurance c. Out of State Coverage d. Any State Coverage

c. Out of State Coverage

Which of the following vehicles is covered under Part B - Medical Payments of the personal auto policy? a. Family member's company car b. 3-wheel vehicle c. Share-the-expense vehicle d. Vehicle used as a residence

c. Share-the-expense vehicle

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. Non-payment of premium b. Material misrepresentation of information on the application by the insured c. Submission of four or more claims during a single policy period d. Suspension of the driver's license of the named insured's or household resident

c. Submission of four or more claims during a single policy period

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 lesser of actual cash value and replacement value

An insured has auto insurance with both Company A and Company B; how much will Company B have to pay for a covered loss of $3,000 if Company A's Limit of Liability is $100,000 and Company B's is $200,000? a. $1,000 b. $3,000 c. $500 d. $2,000

d. $2,000 [- If there are 2 insurance policies for 1 vehicle, then insurance companies pay on a pro rata basis - Company A's limit of liability = 100,000 - Company B's limit of liability = 200,000 - So company B is responsible for 2/3 of the total liability - So out of a loss of 3000, company b is responsible for 2000]

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. A motorcycle

The limit of liability is the most paid by the insurer regardless of all of the following, except: a. Number of insureds b. Premiums shown c. Number of vehicles involved d. Amount of surcharges to be applied to policy

d. Amount of surcharges to be applied to policy

Which of the following is not a valid reason to cancel a personal auto policy after the first 60 days of coverage? a. Driver's license suspension b. Non-payment of premium c. Material misrepresentation d. Claims history

d. Claims history

Which of these statements is not true about Uninsured Motorist coverage? a. Bodily injury must be caused by another person who is legally responsible b. A hit-and-run driver is considered uninsured c. A driver is considered uninsured when his/her insurer denies a claim d. Coverage is automatically provided for the damage to the insured vehicle

d. Coverage is automatically provided for the damage to the insured vehicle

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

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

Which of the following is not an eligible vehicle for coverage under the Personal Auto Policy? a. SUV b. Van c. Automobile d. Pick-up with gross vehicle weight of 12,000 lbs.

d. Pick-up with gross vehicle weight of 12,000 lbs. [Personal Autos cannot exceed 10,000 lbs.]

Comprehensive covers all of the following losses, except: a. Falling objects b. Theft c. Contact with a deer d. Rollover

d. Rollover [Collision Coverage includes Rollover]

Which of the following persons cannot collect a claim payment under Uninsured Motorist coverage? a. The owner of a car that was struck by a vehicle whose auto carrier was insolvent at the time of the accident b. A pedestrian struck by a hit-and-run vehicle c. The owner of a car struck by an uninsured motorist d. The owner of a parked car struck by a falling object

d. The owner of a parked car struck by a falling object

Automobile collision insurance under the Personal Auto Policy provides payment for losses: a. To your car and the car you run into b. To the car you run into, regardless of liability c. To your car only if you are legally liable d. To your car, regardless of liability

d. To your car, regardless of liability