Chapter 6: personal auto policy

Other insurance ( Part B )

Policy pays on excess basis for any non-owned auto, including temporary substitute

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

A company car

Which of the following will be paid by Supplementary Payments under Part A of the Personal Auto Policy? A Medical expenses when the insured's daughter is injured in an auto accident B $1,000 for loss of earnings when the insured is disabled C A judgment against the insured up to 10% above liability limits D A $250 bail bond

$250 bail bond

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

$4,000

Under the PAP, after a collision the insured is entitled to Transportation expenses up to: A $600 B $500 C $1,000 D $200

$600

Part D of the Personal Auto Policy provides which of the following coverages? A Coverage for Damage to Your Auto B Liability Coverage C Medical Payments Coverage D Underinsured Motorists Coverage

Coverage for damage to your auto

Part B Exclusions

1. Motor vehicle with less than 4 wheels or used for business reasons 2. Vehicle used as home 3. Injury incurred during course of employment 4. Vehicle used without reasonable belief of permission 5. Nuclear weapon/radiation/war 6. Racing vehicle

Part D Exclusions

1. Used as part of a business 2. Wear and tear 3. Radioactive contamination or war 4. Electronic equipment not permanently installed 5. Tapes, records, discs 6. Gov destruction or confiscation 7. Trailer/motor home not listed in declarations 8. Loss to non owned vehicle used with out belief of permission 9. Radar detection equipment 10. Custom furnishings/equipment 11. Non owned auto used in business 12. Racing vehicle 13. Rental car

Part C Exclusions

1. Vehicle owned by an insured 2. Primary coverage under another policy 3. Settling claim w/o insurer's consent 4. Using vehicle for business 5. No reasonable belief of permission 6. No punitive damages

Joint Ownership Coverage

2 or more individuals who reside in the same home Or non resident relatives who jointly own the insured vehicle

If an insurer non-renews an insured's policy for underwriting reasons, what is the minimum number of days' notice to the insured? A 60 B 20 C 45 D 30

20

Non- renewal (Part F)

20 days notice ( list reasons )

Under the PAP, how long does an injured party have following an accident to report a Medical Payments claim? 48 hours B 3 years C 1 year D 6 months

3 years

Transportation Expenses Coverage under Part D of the Personal Auto Policy begins how long after the covered auto has been stolen? A 72 hours B 48 hours C Immediately D 24 hours

48 hours

Family member

A person related to the named insured by blood, marriage, or adoption who is a resident of the named insured's household.

trailer

A vehicle designed to be pulled by a private passenger auto or a pickup or van. Trailer also includes a farm wagon or farm implement while it's being towed by a private passenger auto pickup, or van.

Newly Acquired Auto

A vehicle for which the insured becomes the owner during the policy period and may be a replacement or additional vehicle

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

A vehicle owned by the government

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 vehicle that is being used as a residence

Which vehicle is covered under Part B - Medical Payments of the Personal Auto Policy? A family member's company car B A vehicle used for car pools C A 3-wheel vehicle D A vehicle used as a residence

A vehicle used for car pools

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

Accident was caused by a hit-and-run driver

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

Amount of surcharges to be applied to policy

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

Termination (Part F) Cancellation:

Any reason with written notice during the first 60 days 10 days for non-payment of premium 20 days for all other reasons After 60 days: • non payment of premium • misrepresentation, fraud • suspension or revocation of drivers license

Newly Acquired Auto

Any vehicle acquired by the insured during the policy period. A private passenger auto A pickup or van, for which no other insurance policy provides coverage, if the auto: 10,000lbs or less Not used for delivery or transportation of goods; unless carrying his tools

Your Covered Auto

Any vehicle in the declarations A newly acquired auto Trailer owned by the named insured Temporary substitute vehicle

Declared auto

Any vehicle shown in the Declarations

An insured accidentally backs into the neighbor's son on his skateboard. The son has medical expenses and there is damage to the skateboard. Which sections of the insured's policy will pay? A Bodily injury and collision B Personal injury and property damage C Bodily injury and property damage D Medical payments and collision

Bodily injury and property damage

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

Call the police

Right to recover payment ( part F )

Can not sue the person that hit you after the insurance company has paid you

Insuring agreement ( part C )

Compensatory damages - must be legally responsible for bodily injury to an insured that rises out of ownership, maintenance or use of an "uninsured motor vehicle"

Part D

Coverage for Damage to Your Auto

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

Covers non-owned vehicles furnished for the insureds regular use

Which of the following claims would be covered by Collision Coverage under Part D of the Personal Auto Policy? Damage to the auto caused by collision with an animal on the roadway B Damage to the insured auto's bumper when the auto crashed into a tree C Damage to the auto caused by objects blown into it during a severe windstorm or tornado D Breakage of the windshield caused by collision with a stone or other missile

Damage to the insured autos bumper when the auto crashed into a tree

UM is one that:

Doesn't have insurance or a bond Has insurance but limits are less than required Hit-and- run Has insurance but insurer denies claim or becomes insolvent

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

Driving into a tree

Part E

Duties after an accident or loss

Non-owned

Excess basis

Liability losses (part A)

Excess basis for non-owned vehicles

Selected Endorsements

Extended non-owned coverage for a named individual Covers non-owned autos furnished or available for the insureds regular use

Out of State Coverage (part A)

Extends to provide coverage as required by the financial responsibility or compulsory insurance laws

Automatic Termination (part F)

Fail accept or pay renewal of policy

(part A) Not provided for ownership, maintenance or use of:

Fewer than 4 wheels Snowmobiles or atvs Vehicle owned but not insured on policy Vehicle owned by family but not on policy (company car) Inside racing facility

Part F

General Provisions

Other insurance (Part A)

If other insurance is in place the personal auto policy will only pay its share of the loss

Business

Includes trade, profession, or occupation.

Optional limits transportation expenses coverage endorsement

Increases limits of liability for transportation Increased daily limit and max limit Does NOT change or broaden insurance in Part D

Supplementary Payments In addition to the limit of liability, the insurer also makes other payments: ( part A )

Insured or family member that uses car Any person using car with permission A person or organization for "your covered auto" if legally responsible for an insured $250 bail bonds $200 day for loss of earnings because of having to be at hearing trials

Which of the following uses of a vehicle is not excluded under the Medical Payments coverage? 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

Insured uses a truck for incidental purposes

Part A Exclusions Liability coverage is not provided for any insured who:

Intentionally does damage Owns or transporting he or she property Property rented to, used by or in care of insured Course of employment Used as a public or livery conveyance In business While employed or engaging in business Without entitlement to drive it

All of the following are true of automobile physical damage Coverage D, except: A It covers damage to the insured auto and to another auto with which it collided B Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision coverage C Collision coverage usually is written with a deductible D It covers damage to the insured auto regardless of liability

It covers damage to the insured auto and to another auto with which it collided

Which of the following best describes the Towing and Labor Costs endorsement to the Personal Auto Policy? A It provides coverage for labor costs incurred after being towed to a repair shop B It provides payment for towing to a garage, or for labor that is performed at the site of a mechanical disablement C It provides coverage for towing charges incurred when towing a disabled vehicle to the insured's home D It provides coverage for towing a covered auto involved in a collision

It provides payment for towing to a garage, or for labor that is performed at the site of a mechanical disablement

The Legal Action Against Us under Part F - General Provisions of the Personal Auto Policy, states which of the following? A Legal action brought against the insurer must be brought within 180 days of the loss 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 against the insurer is permitted only when arbitration is unsuccessful

Legal action may not be brought against the insurer until the insured has complied with all the terms of the policy

Limit of Liability ( Part D)

Lesser of the ACV or amount necessary to repair or replace vehicle * not pay for betterment * - max limit of $1,500 for non-owned trailer and $1,000 for certain electronic equipment

Part A

Liability coverage

Choose the physical damage claim that would be covered under the Personal Auto Policy. A Loss due to radioactive contamination B Malicious mischief to the tires C Mechanical breakdown D Loss due to war

Malicious mischief of the tires

Limit of liability ( Part C )

Max insurance will pay Payment will not duplicate

Limit of liability ( part B )

Max insurer will pay Most policy will pay regardless of the number of insureds, claims made, vehicles or premiums shown on declarations, or vehicles involved in the accident

Underinsured Motorist Coverage

May be required by the state statues In other states, coverage is optional or added by endorsement UIM protects insured against limits or someone's policy that are inadequate or insufficient to respond to claims

Transfer of Your Interest in This Policy (Part F)

May not transfer/assign his/her interest without insurers written consent unless dies then spouse will be named

Payment of loss ( Part D )

May pay in cash includes sales tax If returned must pay for any damage from theft

Part B

Medical Payments

Which of the following is not a Supplementary Payment under Part A of the Personal Auto Policy? A Payment for lost earnings up to $200/day B Up to $250 for the cost of bail bonds C Reasonable expenses incurred at the insurer's request D Medical payments for an occupant of an insured vehicle

Medical payments for an occupant of an insured vehicle

miscellaneous-type vehicle endorsement

Motor home, motorcycle, ATV, dune buggy or golf cart

Bankruptcy ( Part F )

Must comply with all obligations of the policy

Part C: Uninsured Motorists Coverage (UM) "Uninsured motorist vehicle"

Named insured or family member Any person occupying a "your covered auto" Entitled to recover damages

Is a your covered auto temporary substitute under part D- coverage to your auto?

No

An insured puts $50,000 of covered inventory into storage, where the items are later damaged by a covered peril. What policy provision prevents the storage facility from collecting any payment from the insured's claim? A Garagekeeper's Form B Assignment Rule C No benefit to bailee D Liberalization clause

No benefit to bailee

Changes ( Part F )

No changes unless written by the insurance company

Fraud ( Part F )

No coverage for anyone who commits fraud

Legal Action Against Insurer ( Part F )

No legal action until he/she has complied fully with policy

Part E: Duties After an Accident or Loss

Notify the insurer promptly Cooperate with investigation Send copies of noticed or legal papers Submit to physical exam Copies of medical reports Proof of loss * notify police if hit-and-run * protect property from further damage * call police if stolen and allow insurer to inspect and appraise the vehicle

Limited Mexico Coverage

Only in Mexico 25 miles of U.S. border Coverage only applies if insureds visit was 10 days or less

Policy Period and Territory (Part F)

Only provides coverage for accidents and losses during policy period in policy territory

Private Passenger Autos

Ordinary cars, station wagons and jeeps, utility autos (pickups, panel trucks, and delivery vans not used commercially), and utility trailers designed to be pulled by a private passenger auto.

NOT (UM):

Owned by named insured or family member or vehicle furnished Self-insured, owned by government agency Bulldozer, train Off public roads Use as a residence

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

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

Part A - Liability Coverage Insuring Agreement The insurer will:

Pay damages for bodily injury or property damage for which any insured becomes legally responsible. Settle or defend any claim or suit asking for such damages. Pay all defense costs it incurs, in addition to the liability limits. The insurer's duty to settle or defend ends when the limit of liability is exhausted.

Towing and labor costs endorsement

Payment at designed amount, for towing to garage or for labor performed at the site of disablement • per occurrence

Other sources of recovery (Part D)

Pays only it's share

Excess electronic equipment endorsement

Permanently installed not used by manufacturer Increases policy limit from $1,000 to amount on endorsement $200 for tapes, records, discs, and other media used

Part D: Coverage for Damage to Your Auto

Physical damage coverage - direct and accidental damage - only section that defines non-owned auto

Bodily Injury

Physical injury to a person, including sickness, disease, and death.

Property Damage

Physical injury to, destruction of, or loss of use of tangible property.

Choose the use of an automobile that is not eligible for the Personal Auto Policy. A Transporting furniture for a neighbor who is moving to a new home B Car pooling C Driving over 25,000 miles annually D Pizza delivery

Pizza delivery

Transportation expenses (Part D)

Rental car No deductible Max $20 per day up to $600 Caused by total theft= 48 hours and ending when found or paid Caused by peril other than theft= 24 hours will pay when withdrawn for only 24 hours

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

Rollover

Collision ( Part D )

Single named peril in the policy ( open perils = other than collision * OTC, Comprehensive) • falling objects • fire, theft • explosion, earthquake • windstorm, hail, water • MMV • riot, bird or animal • glass

Which of the following is not considered 'occupying an automobile'? A Closing a car door B Getting out of the car C Standing by the car exchanging insurance information D Jumping off the trunk

Standing by the car exchanging insurance information

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

Submission of four or more claims during a single policy period

When an auto has two auto policies with the same insurer, the insurer's liability would not exceed: The combined limit of the two policies B The limit of the first one purchased C The highest limit of the two policies D The limit of the last one purchased

The highest limit of the two policies

Which of the following are the Territorial Limits of the Personal Auto Policy? A The United States, Mexico, and Canada B The United States, Puerto Rico, Canada, and Mexico C The United States, its territories and possessions, Puerto Rico, and Canada D The United States, its territories and possessions, Canada, and Mexico

The United States, it's territories and possessions, Puerto Rico, and Canada

Which of the following claims would be insured under Uninsured Motorists Coverage? A An insured is sued and the other party is awarded an injury settlement and punitive damages B The insured's resident son suffered severe injuries after being rear-ended by an uninsured driver C The insured was driving his uninsured car at the time of the accident D A thief stole the insured's car and was paralyzed after being struck by a drunk driver

The insured's resident son suffered severe injuries after being rear-ended by an uninsured driver

Whose policy will be primary for bodily injury coverage for the injured party if a neighbor borrows an insured's car and injures a pedestrian? A The neighbor's homeowners liability policy B The neighbor's personal auto policy C The insured's auto policy D There is no coverage for this loss

The insureds auto policy

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

The lesser of actual cash value and replacement value

The limit of liability of Coverage D, Damage to Your Auto, under the Personal Auto Policy states that: A The limit of liability is reduced by an amount equal to losses paid on the covered auto B The limit of liability is reduced by an amount equal to losses paid during the policy term C The limit of liability is equal to the limit of liability of Coverage A D The limit of liability is the lesser of the actual cash value (ACV) of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality

The limit of liability is the lesser of the actual cash value (ACV) of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality

Two or More Auto Policies (part F)

The max limit of liability that will be paid will not exceed highest limit

Limit of Liability

The maximum amount for which an insurer is liable. Will not duplicate

You and your

The named insured listed in the declarations, and the spouse if a resident of the same household.

The policy defines insured in Part A as:

The named insured or any family member for the ownership, maintenance, or use of any auto. Any person using the covered auto with permission. A person or organization, for "your covered auto," if legally responsible for an insured.

Other insurance ( Part C )

Total amount insured may collect, can not exceed highest limit Non-owned vehicle Pays only it's share of loss

Fail to agree=

Umpire

appraisal

Unable to agree = appraisal

Which coverage protects the insured against drivers who do not have auto liability insurance limits adequate to cover a loss? Medical Payments Coverage B Uninsured Motorist Coverage C Underinsured Motorist Coverage D Liability Coverage

Underinsured motorist coverage D

Part C

Uninsured Motorists

Which of the following does not pay regardless of fault? A Medical Payments B Uninsured Motorist Bodily Injury C Comprehensive D Collision

Uninsured motorist bodily injury

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

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

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

While an insured auto needs servicing

Named non-owner coverage for a named individual

Who does not own vehicles , but often borrows or rents autos

No Benefit to Bailee

Will not make payment to someone else when they were in charge of your car Example: mechanic

Part B: Medical Payments Coverage

Within 3 years of accident (36 months) Does not require an insured to be legally responsible for causing injures The named insured or family member occupying an auto or as pedestrian when struck by a vehicle designed for public roads Any other person, such as a passenger

Combined Single Limit

auto insurance liability coverage that combines both bodily injury and property damage liability

non-owned auto

coverage on a vehicle not regularly made available to the insured Temporary substitute due to: • breakdown • repair • servicing • loss • destruction

Part F: General Provisions

establishes conditions for the coverage and describes the duties and obligations of the insured and insurer

occupying

in, upon, getting in, on, out, or off

Under Part D, Coverage for Damage to your Auto automatic coverage begins on the date the named insured becomes the legal owner of the vehicle.

must report the newly acquired auto to the insurer for coverage to continue. If the insured doesn't report as required, coverage ends after either 4 or 14 days. If the Declarations page indicates that either Collision or Other than Collision coverage applies to at least one vehicle, the insured has 14 days to report for either coverage to apply. Automatic coverage ends after 14 days if the insured doesn't report. If the Declarations page indicates that NO Collision or Other than Collision coverage applies to at least one vehicle, the insured has 4 days to report for coverage to apply. Automatic coverage ends after 4 days if the insured doesn't report.

For all coverages EXCEPT Part D - Coverage for Damage to your Auto, coverage begins on the date the named insured becomes the owner.

must report to the insurer within 14 days. A replacement auto, does not report the replacement.

Split Limits

the amounts of insurance for bodily injury liability and property damage liability are stated separately