Regulation of Auto Insurance

Charmaine carries other-than-collision coverage but has no collision coverage on her auto. During the past three years, she has made four claims for physical damage to her auto. Which of them did her policy not cover?

- A large dog ran into the street in front of the car and damaged it when she struck the dog. - Her car was parked in the hot sun when the windshield cracked. C - Her car skidded into a snow bank and rolled over (Running into a snow bank and rolling over are considered collision and upset, which does not qualify as an other-than-collision loss). - A hailstorm dented the entire car.

Acme Mutual learns that Jack's driver's license has been suspended. Acme decides to cancel the policy. According to the standard, unendorsed PAP, when mailing the cancellation notice, what must ABC be able to provide?

- A signed receipt from Jack indicating the he received notice in the mail. C - Proof that the notice was mailed (ABC must be able to prove that the notice was mailed). - Proof that the notice was sent by registered mail. - Proof that the notice was mailed via certified mail.

Riley's sedan is insured under a personal auto policy (PAP) that includes only liability, uninsured motorists, and other-than-collision coverages. Riley did not dispose of the sedan or change his PAP when he bought a roadster. According to Riley's PAP, what kind of coverage does he have for the roadster?

- Automatic liability coverage if he reports it to the insurer within 31 days - Automatic liability coverage for the remainder of the policy period C - Automatic collision coverage if he reports it to the insurer within four days (Because Riley's roadster does not have collision coverage, he must report it within four days of its acquisition to have collision coverage after that). - No automatic coverage

Bertha, the named insured in her small business's business auto policy, borrows Valeria's car to go shopping. Valeria does not tell Bertha that the car's horn does not work. Bertha tries to blow the horn to warn Gale, the driver of another car that is backing out of her space in the shopping center parking lot. Gale does not stop, and Bertha collides with Gale's car. Who is an insured under the liability coverage of Bertha's BAP, which lists Symbol 1 for the liability coverage?

- Bertha, Valeria, and Gale C - Bertha only (As the named insured, Bertha has liability coverage under her own BAP for the use of any covered auto). - Valeria only - Bertha and Valeria

Justin owns three vehicles. Two of them-a sedan and a pickup-are insured under a PAP with Presto Insurance. The other vehicle-a station wagon-is insured under a PAP with Quick Quote Insurance. Only the station wagon has UM coverage included. Justin is injured while driving the sedan when an uninsured motorist collides with him. What kind of uninsured motorists coverage is available for this accident?

- Both of Justin's policies will provide UM coverage. C - Justin will not have UM coverage for this accident (UM coverage is excluded for injury an insured sustains while occupying a vehicle owned by the insured which is not covered under the policy). - Justin's policy with Presto Insurance will provide UM coverage. - Justin's policy with Quick Quote Insurance will provide UM coverage.

Mary Jane's vehicle was damaged while it was parked in the lot at the nursing home. No one saw what caused the damage to the roof of her vehicle, and the adjuster can't determine how it happened. How will the claim be paid under Part D-Damage to Your Auto on Mary Jane's policy?

- Collision coverage will apply because the adjuster can't figure out what happened. - Other than collision coverage will apply because it is the default coverage C - Other than collision coverage will apply because it is an open perils coverage that excludes collision (Because it is unlikely that a collision damaged the roof of Mary Jane's car, other than collision coverage will apply). - Collision coverage will apply because it is the default coverage.

.What are the personal auto policy's collision and other-than-collision coverages collectively called?

- Comprehensive coverage - Property damage coverage - Third-party coverage C - Physical damage coverage (Insurance practitioners collectively refer to the collision and other-than-collision (comprehensive) coverages as physical damage coverage).

Which of the following expenses would not be covered by a business auto policy paying a claim for property damage, as that term is used in a BAP?

- Damage caused to a structure by a covered auto - Repairs to a covered auto damaged in a collision C - Damage to property being transported in a covered auto (The BAP excludes damage to property owned or transported by the insured or in the insured's care, custody, or control). - Lease of a substitute vehicle while the covered auto is being repaired

Which of the following would not fall within the definition of bodily injury for purposes of coverage by the business auto policy (BAP)?

- Death C - Mental trauma (For liability coverage to apply under the BAP, the insured's legal liability for damages must arise from bodily injury caused by an accident. The term "bodily injury" is defined in the policy to mean illness, sickness or disease sustained by a person. Bodily injury also includes death resulting from any of these. The injury would have to involve actual injury to or sickness of the body. Therefore, mental trauma alone would not fall within the meaning of bodily injury). - Illness - Disease

Which of the following would not be an insured under Leakey Plumbing's business auto policy's Symbol 1 liability coverage?

- Dwight, who drives the crew to and from job sites in the company-owned truck. - Zach, who uses the company truck to pick up supplies from the plumbing wholesaler. - Adam, the company owner, while driving his company-owned sedan. C - Jake, who uses his personal pickup truck to get supplies from the plumbing wholesaler (Jake does not qualify as an insured).

0.Which of the following is not typically part of a complete Personal Auto Policy?

- Endorsements C - Coverage audit (The typical parts of a PAP include the declarations page, the personal auto coverage form, and any applicable endorsements). - Personal auto coverage form - Declarations page

Jim was a driver for the Abstract Concrete Company when he was involved in a traffic accident. Because he was injured while driving his employer's cement truck, Jim is unable to perform his normal household and marital duties, so Jim's wife Cora sues Abstract for damages. What exclusion will the insurer cite in denying coverage for this claim under Abstract's business auto policy (BAP)?

- Fellow employee exclusion - Handling of property exclusion C - Employee indemnification and employers liability exclusion (The employee indemnification and employers liability exclusion precludes coverage for these claims that could be covered by workers compensation and employers liability insurance). - Workers compensation exclusion

A state has a financial responsibility law, but a group of citizens is urging lawmakers to replace it with a compulsory insurance law. Why are compulsory insurance laws generally considered to be superior to financial responsibility laws?

- Financial responsibility laws only ensure that a driver has insurance when registering or inspecting a car. - Compulsory insurance laws completely protect innocent victims against irresponsible drivers. - Compulsory insurance laws are easier to enforce as police are already involved when a driver is ticketed or in an accident. C - Financial responsibility laws become effective after a problem has already occurred (Because financial responsibility laws require drivers to show evidence of financial responsibility after a serious accident or violation, they give the offending driver one "free bite.")

Which one of the following pollution liability losses would be covered by a business auto policy?

- Gasoline leaking from a tank truck that is delivering gasoline to service stations causes a fire. C - The rusty fuel line between a garbage truck's fuel tank and its engine bursts, leaking 50 gallons of diesel fuel leak onto a residential neighborhood's street (The diesel leak is covered because the pollution exclusion does not apply to liability arising out of the discharge or escape of fuel needed for or result from the normal functioning of the covered auto). - Drums containing medical waste fall off the back of a truck that is transporting them, and a hazmat team is necessary to clean up the mess. - Raw sewage leaks from a septic tank service company's wagon that is parked overnight and pollutes a stream.

When Damien moved to a different state, his insurer issued a different personal auto policy. On reviewing the new policy, Damien notices that it includes a personal injury protection endorsement that his old policy did not have. What is the purpose of this endorsement?

- It protects Damien against claims for libel, slander, and other offenses. - It is a new endorsement that provides better coverage when Damien rents a car. C - It adds no-fault coverage that is available or required in Damien's new state (In states where no-fault insurance is available, the policy is modified by adding a personal injury protection endorsement). - It protects Damien against aggressive drivers or incidents of road rage.

When he discovers that his car has a flat tire, Nathan is glad that his agent convinced him to add the towing and labor costs endorsement with a $50 limit to his personal auto policy (PAP). Nathan calls a towing company that charges $40 to come to his home and change the tire in his driveway. What will Nathan's insurer do?

- It will deny coverage because the car was not towed. C - It will reimburse the $40 charge (The insurer will pay up to the towing and labor limit for labor performed at the place of disablement, in this case, changing the tire in Nathan's driveway). - It will pay Nathan a flat $50. - It will deny coverage because the service occurred at Nathan's home.

Silvia, who has no health insurance, is injured when she makes an illegal turn in front of Lucien's car, which then collides with her car. Lucien has no auto insurance. What is true about the uninsured motorists coverage of Silvia's personal auto policy (PAP) in this case?

- It will pay Sylvia's medical bills because Lucien is an uninsured motorist. - It will not pay Silvia's medical bills but will pay Lucien's medical bills. C - It will not pay Sylvia's medical bills because the uninsured motorist (Lucien) wasn't at fault (If the insured (Sylvia) is negligent in an accident with an uninsured motorist (Lucien), uninsured motorists coverage does not apply). - It will pay Sylvia's medical bills because she has no health insurance

Jan's PAP with Zippo Indemnity has a policy period of June 1 this year to June 1 next year. Zippo mails a cancellation notice for nonpayment of premium on October 1 this year to be effective on October 11. As a result, what is the expiration date of Jan's policy?

- June 1 next year - October 1 this year C - October 11 this year (When a policy is canceled for nonpayment of premium with at least 10 days' notice, the effective date of the cancellation becomes the expiration date of the policy). - January 1 next year

Maryellen's personal auto policy (PAP) includes uninsured motorists coverage that does not apply to injuries suffered by

- Maryellen, who is riding in a friend's car when it is struck by an uninsured motorist. C - the friend in whose car Maryellen is a passenger when it is struck by an uninsured motorist (Uninsured motorists coverage applies to the named insured and family members who are hit as pedestrians, in vehicles they occupy, and in their own covered autos). Coverage also applies to other persons occupying the named insured's covered auto. - Maryellen, who is walking along the road when she is struck by an uninsured motorist. - friends who are riding in her car when it is struck by an uninsured motorist.

Maurice has a personal auto policy (PAP) on the family car that lists Maurice alone as the named insured. His wife, Sondra, is involved in an accident while using the family car as a Charity Organization volunteer. The injured parties sue Maurice, Sondra, and Charity Organization. Which of these parties is insured under the PAP's liability coverage?

- Maurice and Sondra but not Charity Organization - Maurice only C - Maurice, Sondra, and Charity Organization (Sondra is a named insured by virtue of her marriage to Maurice, who is named in the policy. Charity Organization is an insured because it may be held liable for an insured's use of the named insured's covered auto). - Maurice and Charity Organization but not Sondra

Vaughn and Shanna were involved in an automobile collision at an uncontrolled intersection, and each driver blames the other. Who usually determines who was legally responsible for an accident like this?

- Most cases like this end up in court where a judge makes the decision. - Most cases like this end up in court where a jury makes the decision. - Police determine who is legally responsible for an auto accident. C - Insurers usually make this decision based on an investigation (A court sometimes makes the determination of legal liability, but it is more often made by the insurer, predicting what a court would determine based on the insurer's own investigation).

David is walking his dog when he is struck by an uninsured motorist. David owns a car insured with a PAP. What coverage in David's PAP would apply?

- Nonowned vehicles C - Uninsured motorists (David's uninsured motorists coverage applies if David is hit as a pedestrian by an uninsured motorist). - Underinsured motorists - Medical payments

Michel was unemployed and driving without auto insurance when he ran a stop light and struck Norma's car. Norma, who has a personal auto policy, was seriously injured. No-fault insurance laws do not apply. How will Norma's medical bills most likely be paid?

- Norma's underinsured motorists coverage will probably pay her bills. C - Norma's uninsured motorists coverage will probably pay her bills (Uninsured motorists coverage is designed to protect insureds like Norma from financially irresponsible drivers who not have not purchased auto liability insurance and do not have the financial resources to compensate people they injure in an accident). - Norma will have to pay her medical bills with her own funds. - Norma will have to rely on any available health insurance to pay her medical bills.

Which of the following is least likely to be considered a covered auto for purposes of the Personal Auto Policy (PAP)?

- Owned private trailer - Temporary substitute passenger auto - Newly acquired passenger auto C - Commercial tractor-trailer combination (Coverage under the PAP is restricted for trucks, particularly those with a gross vehicle weight (GVW) of 10,000 pounds or more. These types of vehicles should be insured on a commercial automobile policy if they are primarily used to carry or deliver goods as part of a commercial operation).

The private passenger autos in Parker's fleet are sometimes used for nonbusiness purposes, but his trucks are used only for business purposes. Why would Parker probably use symbol 3 to indicate which vehicles have medical payments coverage?

- Parker does not need medical payments coverage on newly acquired vehicles. C - Parker does not need medical payments coverage on his trucks because workers compensation applies to employees injured on the job (Auto medical payments coverage has a workers compensation exclusion, so symbol 3 is often used to designate auto medical payments coverage when only private passenger autos are exposed to nonbusiness use). - Medical payments coverage is only available on private passenger autos. - Parker wants medical payments coverage only on his trucks.

Now that she is going to college, Mattie wants to reduce her expenses. She sells her car and no longer needs auto insurance. What must she do to cancel her policy?

- Pay a cancellation fee. - She has to forfeit the unearned premium. - Nothing, because the policy automatically terminated when she sold her car. C - Either return the policy to her insurer or give the insurer written notice of the cancellation date (The named insured can cancel by returning the policy to the insurer or giving the insurer advanced written notice of the date cancellation is to take effect).

While on vacation in another state, Bobby causes an accident involving a minivan. Bobby's sedan is insured with a PAP. The minivan driver sues Bobby for additional damages. Under the terms of Bobby's PAP, which of the following would not be a supplementary payment that his insurer would make?

- Postjudgment interest which accrues while Bobby's insurer appeals the trial court's ruling. - Bobby's hotel and food expenses while attending the trial at his insurer's request. - Bobby's loss of earnings while attending the trial at his insurer's request. C - Prejudgment interest (Although postjudgment interest is one of the expenses covered as a supplementary payment, prejudgment interest is covered within the PAP's liability limit).

Floyd just had his first auto accident. What is one of the things his personal auto policy (PAP) does not require him to do?

- Protect his car from further damage. - Cooperate with the insurer. - Tell his insurer about the accident. C - Negotiate a settlement with the other driver (A driver involved in an accident is not required to negotiate a settlement with the other driver. The insurance company is responsible for doing so).

Charlene's personal auto policy (PAP) provides coverage not only in her home state but also when she is driving her car in all the following areas EXCEPT:

- Puerto Rico C - Mexico (The PAP's policy territory includes the United States, its territories or possessions, and Canada, but does not include Mexico). - Quebec - Hawaii

Peter is adjusting a loss to a vehicle. He dreads having to tell the insured the claim is not covered because the peril causing the loss is specifically excluded. Which event likely caused the loss to the vehicle that is the subject of Peter's claim?

- Rain pouring in through an open window damaged the radio - Lipstick melting on the back seat damaged the upholstery - Mice chewed through the fabric of the upholstery C - Worn brake pads damaged the brake rotors (The personal auto policy excludes wear and tear, such as Peter's worn out brakes).

Which of the following accidents involves a vehicle that is not considered an uninsured motor vehicle?

- Renee, an insured, is driving through an intersection when another driver runs a red light and side-swipes her. The other driver does not have insurance. - Isabelle, an insured, is driving to work when she is rear-ended by another vehicle. The driver flees the scene. C - Alphonse, an insured, is playing golf at a resort when his golf cart is struck by another golf cart. The golf cart driver does not have insurance (The golf cart that hit Alphonse is not considered to be an uninsured motor vehicle). - Vinnie, an insured, is hit by another driver whose auto is insured with a PAP. However, the PAP insurer has gone out of business.

Kendrick insures his convertible under a personal auto policy (PAP), but he is not sure how best to get insurance for the motorcycle he is buying. What should Kendrick do?

- Replace the PAP with a fleet policy now that he owns more than one vehicle - Make sure his new motorcycle is listed, along with his convertible, in the PAP's declarations - Nothing, because the PAP provides automatic coverage on a newly acquired motorcycle C - Have the miscellaneous type vehicle endorsement added to his PAP (The miscellaneous type vehicle endorsement broadens the definition of covered autos to include miscellaneous type vehicles such as a motorcycle).

Joe's personal auto policy (PAP) lists a $100 deductible for collision coverage on his sedan but no physical damage coverage on his old Jeep. While the Jeep is being repaired, Joe borrows Robin's late-model Land Rover and has a bad accident with it. Robin carries collision coverage with a $1,000 deductible. Who will pay for the Land Rover's repairs?

- Robin's insurer will pay all but $1,000 and Joe will have to pay $1,000. - Because the Land Rover was a temporary substitute for the Jeep, Joe has no applicable collision coverage and must pay the entire bill. C - Robin's insurer will pay all but $1,000, Joe's insurer will pay $900, and Joe will pay $100 (Because the Land Rover is a temporary substitute for an owned auto, Joe's PAP considers it a nonowned auto, and Joe is entitled to the broadest physical damage coverage available on any of Joe's owned autos. However, insurance follows the car, so Robin's PAP provides primary coverage). - Joe's insurer will pay all but $100, and Joe will pay $100.

Nellie is an elderly woman who has difficulty understanding the coverages provided by her auto insurance policy. Her adjuster, Brian, decides to give her examples of the types of claims that would be addressed by each coverage. What coverage is Brian discussing when he mentions claims arising from vandalism, flood, earthquake, theft, and glass breakage?

- Substitute transportation - Liability C - Other than collision (Other than collision coverage applies for all causes of loss other than collision or upset. It includes but is not limited to falling objects, fire, earthquake, explosion, wind, hail, flood, vandalism, riot, theft, contact with a bird or animal, and glass breakage). - Collision

The state where Vicky's business is located requires that every auto have uninsured motorists coverage. What symbol will the uninsured motorists coverages in Vicky's business auto policy probably use?

- Symbol 1 C - Symbol 6 (Symbol 6 denotes mandatory uninsured motorists coverage that cannot be waived). - Symbol 3 - Symbol 5

Sheila has been involved in several auto accidents. Her personal auto policy (PAP) includes uninsured motorists coverage. Which one of the following accidents in which Sheila was injured involved an INSURED motor vehicle?

- The driver who ran into Sheila had evidence of insurance from an insurer that is now insolvent and paying no claims. - A driver who had no auto liability insurance ran a red light and struck Sheila's car. - Sheila's car was struck by another vehicle that did not stop and could not be identified. C - Sheila had a one-car accident while driving a rented car, and she had not purchased any insurance offered by the rental agency (An uninsured motor vehicle has a driver with no liability insurance, is involved in a hit-and-run, or has applicable liability coverage from an insolvent insurer).

While teaching new insurance agents, Noreen cited three reasons why compulsory insurance laws do not completely solve the problem of irresponsible and uninsured drivers. Which one of the following is not likely to be one of the reasons she cited?

- The law requires relatively low limits of liability insurance. - Compulsory insurance laws may not actually reduce the number of uninsured drivers. C - A compulsory insurance endorsement adds to the cost of insurance (Compulsory insurance laws do not require a special endorsement). - It is still possible to be involved in an accident caused by an uninsured or unidentified driver.

What is the purpose of underinsured motorists coverage?

- To pay the deductible for underinsured drivers whose autos are damaged C - To protect insureds from drivers with inadequate limits of auto liability insurance (The purpose of underinsured motorists coverage is to protect insureds from drivers who have not purchased limits of auto liability insurance that are high enough to cover the insured's bodily injury claim). - To protect underinsured drivers from claims brought by people they might injure - To protect insureds from drivers who have no auto liability insurance

What are the common terms used to describe the major physical damage coverages provided by Part D-Damage to Your Auto?

- Towing and substitute transportation - Collision and towing - Comprehensive and rental reimbursement C - Collision and comprehensive ("Collision" and "comprehensive" are the common terms used to describe the major physical damage coverages provided by Part D-Damage to Your Auto).

As defined in the business auto policy (BAP), the term "auto" does not include vehicles that fall under what definition?

- Trucks C - Mobile equipment (A piece of "mobile equipment," as defined, is not an "auto," as defined, and vice versa. The BAP covers auto liability, and the commercial general liability (CGL) insurance policy covers mobile equipment liability). - Trailers - Toys

Six school children were passengers in Danny's minivan when it was struck by a dump truck. Four children were killed. An investigation revealed that the accident was caused by a hazardous road condition and was not Danny's fault. However, Danny was asked to pay the children's funeral expenses. Danny's personal auto policy (PAP) has a $2,500 medical payments limit. What will his insurer pay for the funerals?

- Up to $2,500 - The full cost of the funerals - Nothing C - Up to $10,000 (Because the medical payment limit applies for each person injured in a single accident, the insurer will pay reasonable expenses up to $2,500 for each of the four funerals).

Al is riding his bicycle when a car suddenly pulls out of a driveway in front of him. Al takes evasive action to avoid striking the car but lands in a cactus plant and is injured. The driver of the car who caused Al's accident is unaware of Al's presence and does not stop. Unable to recover from the driver of a vehicle he cannot identify, Al files an uninsured motorists claim with his own auto insurer. Which one of the following is most relevant in determining whether the insurer will pay Al's uninsured motorists claim?

- Whether Al's bicycle can qualify as a vehicle for use on public roads. C - Whether courts in Al's state enforce the requirement that there be physical contact with an unidentified vehicle (The most significant issue is whether courts in Al's state enforce the requirement that there be physical contact with an unidentified vehicle). - Whether Al could have taken evasive action to avoid running into the cactus plant. - Whether the damage to Al's bicycle exceeds his uninsured motorists deductible.

Mary lost control of her car and injured Wilmer, a pedestrian. Katharine witnessed the incident and had to engage a psychiatrist for her resulting mental anguish. Mary's personal auto policy covers liability resulting from bodily injury, which includes

- Wilmer's doctor bills and Katharine's psychiatrist bills. C - Wilmer's doctor bills but not Katharine's psychiatrist bills (Wilmer's bodily harm falls within the definition of bodily injury, but Katharine's mental anguish is neither physically manifested nor tangible, so it is not considered to be bodily injury). - Mary's medical bills if she was also injured, but not Wilmer's or Katharine's bills. - Katharine's psychiatrist bills but not Wilmer's doctor bills.

Tom is insured on a PAP with Yippee Mutual. Ninety days after the policy period begins, he resigns from his corporate job and becomes a bartender. Yippee does not like the added exposure presented by Tom's new position and wants to cancel the policy. According to the PAP (and ignoring any state-specific modifications that might be applicable), can Yippee cancel Tom's PAP, and for what reason?

- Yippee can cancel Tom's PAP because bartenders present more of a risk to insurers than the rates contemplate. C - Yippee cannot cancel Tom's PAP because a change of occupation is not one of the reasons for which the PAP permits cancellation (Yippee cannot cancel Tom's PAP because a change of occupation is not one of the reasons for which the PAP permits cancellation). - Yippee can cancel Tom's PAP because the occupation in his insurance application is a material misrepresentation. - Yippee cannot cancel Tom's PAP because the PAP automatically becomes excess over the dram shop insurance provided by the bar at which he is serving.

Elizabeth paid $2,500 in cash to buy a ten-year-old pickup truck that she will occasionally use for light short-distance hauling of household trash, yard debris, and other items. After looking at the premiums for the various coverages available under her personal auto policy, Elizabeth will most likely decide to

- add temporary substitute auto physical damage coverage. C - forgo collision coverage on the truck (People typically do not buy collision coverage on older vehicles with diminished value when there is no lienholder to require physical damage coverage). - add nonowned auto physical damage coverage. - forgo other-than-collision coverage on the truck.

A complete Personal Auto Policy (PAP) consists of all of the following major parts EXCEPT:

- applicable endorsements - personal auto coverage form C - key definitions (Although the PAP definitions are an important part of the policy, they are not one of its three major sections). - declarations page

To settle an uninsured motorists claim, Osvaldo agrees to submit the dispute to arbitration as provided in his personal auto policy. A typical arbitration

- applies legal rules that are detailed in the insured's policy. C - involves a panel of three experts (Normally, the parties agree in writing to submit their disputes to a panel of three experts who decide the matter. Each side selects an arbitrator, and the two arbitrators choose the third arbitrator). - utilizes a panel of arbitrators selected by the insurer. - takes place outside the county where the insured lives.

Eliza's car is insured under a personal auto policy (PAP) that includes liability, collision, and other-than-collision coverages. Today she buys a pickup truck with a 5,000 pound gross vehicle weight (GVW) rating, which she now parks next to her car in the garage. According to Eliza's PAP, she has

- automatic liability coverage on the truck for the remainder of the policy period. C - automatic liability coverage on the truck if she reports it to the insurer a week from today (Because the truck is an additional vehicle, Eliza has automatic liability coverage today and has 14 days to notify the insurer and have the truck added to her policy). - no automatic coverage for the truck because of its weight rating. - automatic collision coverage on the truck if she reports it to the insurer a month from today.

MegaBucks Company employees Ted and Clinton are driving to a business meeting in a company car that is a covered auto under MegaBucks' business auto policy (BAP). Ted runs a red light and crashes into another vehicle that had a green light. Clinton, who is severely injured in the accident, sues Ted for negligence. According to the fellow employee exclusion in MegaBucks' BAP,

- because Clinton was not driving, he is not an insured, and has no grounds to sue. C - Ted has no coverage for bodily injury to Clinton in this situation (A driver who causes an auto accident resulting in injury to a fellow employee is not protected by the employer's BAP). - because Ted was driving a company car, he is insured against this claim by Clinton. - Ted's personal auto policy provides primary coverage for Clinton's injury.

Because Pamela lives in a state with a financial responsibility law, she will be required to prove she has insurance

- before she can have her car inspected. C - after a serious traffic violation or accident (Financial responsibility laws require a motorist to furnish evidence of financial responsibility (usually by providing proof of insurance) after a serious traffic violation or accident). - before she is involved in a traffic accident. - after registering her car or having it inspected.

While discussing insurance during a drivers' education class, Janis asked the insurance agent serving as a guest instructor which coverage in the personal auto policy is most important. The agent should tell Janis that the most important coverage is the

- collision coverage because it protects your car. - uninsured motorists coverage because almost every accident involves an uninsured motorist. - medical payments coverage because it provides some protection against your own injuries. C - liability coverage because liability losses often involve large amounts of money (The PAP's liability coverage is generally regarded as the policy's most important coverage because an insured's legal liability arising from a car accident can result in a high-severity loss).

McConnell Paving Company owns a number of motor vehicles, including trucks, cars, and various pieces of mobile equipment. If these items are properly insured, any item of mobile equipment that does not have liability coverage under McConnell's business auto policy (BAP) will have liability coverage under the company's

- employers liability insurance. - contractors equipment floater. - personal auto policy. C - commercial general liability (CGL) policy (Mobile equipment is covered under either a BAP or a CGL if the insurance is properly arranged).

While entering a construction site, Dustin's dump truck ran over a boulder that tore a hole in the engine's oil pan and released motor oil that seeped into the sandy soil. The owner of the site wants Dustin to pay to have the oil removed from the ground. The pollution exclusion in Dustin's business auto policy

- excludes coverage for this pollutant that was stored on Dustin's truck. C - does not exclude coverage for this damage (The pollution exclusion does not apply to liability arising out of the discharge or escape of fluids that are needed for the normal functioning of the covered auto). - excludes coverage for this accidental discharge of a lubricant necessary to the truck's operation. - is an absolute pollution exclusion that excludes coverage for any pollutant, including motor oil.

While Roderick was making a delivery, a radiator hose on his delivery van burst and sprayed a mix of antifreeze and rusty water. The spray stained the customer's new concrete driveway. The customer wants Roderick to pay to have the driveway resurfaced. The pollution exclusion in Roderick's business auto policy

- excludes coverage for this pollutant that was stored on Roderick's truck. - excludes coverage for the damage caused by antifreeze but not for the damage caused by rusty water. - excludes coverage for this accidental discharge of a coolant necessary to the truck's operation. C - does not exclude coverage for the damage (The pollution exclusion does not apply to liability arising out of the discharge or escape of fluids that are needed for the normal functioning of the covered auto).

While on his way to a family picnic, Galen was injured in an auto accident caused by another driver who failed to comply with state compulsory insurance laws. Despite the other driver's lack of insurance, Galen may have a source of recovery for his injuries in the form of

- general average. - underinsured motorists coverage. C - uninsured motorists coverage (Uninsured motorists coverage in Galen's own auto policy can protect him from the financially irresponsible driver who caused his injuries and had no auto liability insurance). - subrogation.

Because Leanne's personal auto policy (PAP) provides liability coverage on temporary substitute autos, the PAP will protect her against a liability claim if she is driving

- her sister's car off the driveway it was blocking. - a bumper car in an amusement park. - a church van because the regular driver is sick. C - a pickup truck she borrows from a friend while Leanne's car is being repaired (The truck is a temporary substitute auto because Leanne is using it while her car is temporarily out of operation undergoing repairs).

Because Carol has been convicted twice for driving while intoxicated (DWI), insurers are reluctant to issue a personal auto policy (PAP) to cover her husband Perry's sedan unless he is willing to accept a policy with a

- high deductible C - named driver exclusion endorsement (In adding a named driver exclusion, Perry and his insurer will agree that Perry's policy provides no coverage while Carol is operating the covered auto, Perry's sedan). - joint ownership coverage endorsement - high liability limit

When Darrin's car struck her at one night, Sabrina was talking on her cellphone, wearing black clothing, and walking on the wrong side of the road. The state's no-fault law applies. Darrin will most likely find that

- his insurer will blame Sabrina's poor choices for her injuries and refuse to pay her claim against Darren. C - his auto no-fault insurance will provide benefits for Sabrina (Pedestrians struck by an auto are ordinarily eligible for no-fault benefits under the driver's insurance). - his auto liability insurance will pay for Sabrina's injuries. - Sabrina's own no-fault insurance will provide her no-fault benefits.

Because she plans to drive her car across the border for a two-week stay in Mexico, Martha asks her agent to add the necessary coverage to her personal auto policy. Her agent adds the limited Mexico coverage endorsement and explains that

- if the vehicle is drivable, any damage to her auto that occurs in Mexico should be repaired in Mexico. - coverage will apply for the entire two-week period when Martha plans to be in Mexico. C - Martha should also purchase liability insurance through a licensed Mexican insurer (The endorsed policy provides only excess coverage over primary Mexican insurance, and the insured is required to purchase Mexican liability insurance, which is typically available at the U.S.-Mexico border). - coverage applies anywhere in Mexico.

Bud's truck is insured under a business auto policy (BAP). After work one night, Bud and his girlfriend Haley drive to a pond for a swim. While they were sitting on the banks of the pond, Holly was stung by a wasp and had an allergic reaction that required medical treatment. Bud paid for the treatments and submitted a claim under his business auto policy. However, Bud's insurer denied the liability claim because

- insect damage is excluded. - Bud was legally obligated to pay for Holly's injuries. C - this is not a claim to which auto liability insurance applies (In the BAP's liability insuring agreement the insurer agrees to pay damages because of bodily injury to which the insurance applies, resulting from the ownership, maintenance, or use of the covered auto. The wasp sting was unrelated to the use of the truck). - Holly should have submitted the claim.

Underinsured motorists coverage protects an insured when an accident is caused by a motorist who

- is not legally responsible for causing the accident. C - has limits of insurance lower than the insured's uninsured motorists/underinsured motorists (UM/UIM) limits (UIM coverage provides protection for bodily injury incurred by an insured when an accident is caused by a motorist who is not sufficiently insured-that is, the negligent motorist's liability insurance limits are lower than the UM/UIM limits carried by the insured). - has no auto liability insurance. - is driving a rental car.

After the auto accident, Kay's medical bills cost over $20,000. Kay is well insured, but the driver whose negligence caused the accident fully complied with his state's compulsory insurance law by carrying liability insurance with a limit of $15,000 per person, and he had no other assets with which to pay the balance of Kay's damages. In addition to recovering $15,000 from the other driver's insurer, Kay will probably be able to recover additional funds from her own auto policy's

- liability coverage. - uninsured and underinsured motorists coverages - uninsured motorists coverage only C - underinsured motorists coverage only (Underinsured motorists (UIM) coverage provides protection for bodily injury suffered by an insured when an accident is caused by a negligent motorist whose limits of insurance are lower than the UM/UIM limits carried by the insured).

Because Cody's job requires local travel, his employer furnishes a company car for both business and personal use. Cody's wife Deanne has her own car, but she sometimes drives the company car, and Cody sometimes drives her car. Adding the extended nonowned coverage endorsement to the PAP on Deanne's car will

- not protect Deanne when she is driving the company car. - modify the physical damage coverages to apply when Cody is driving the company car. - modify the PAP so Cody has coverage when driving Deanne's car. C - modify the liability and medical payments coverages to apply when Cody is driving the company car (The Extended Non-Owned Coverage--Vehicles Furnished or Available for Regular Use Endorsement (PP 03 06) modifies the liability and medical payments coverages to protect Cody. If an option in the endorsement is activated, it will also protect Deanne).

The taillight of Misty's roadster was damaged in a collision, and her insurer wants to have the damage repaired with non-original equipment manufacturer parts. Before using non-OEM parts, the law in some states may require the insurer to do all of the following EXCEPT:

- obtain Misty's consent to the use of non-OEM parts. - make sure the parts used are permanently marked so their manufacturer can be identified. - disclose the use of non-OEM parts to Misty. C - waive the deductible in Misty's policy and provide first-dollar coverage (Many states now require that OEM parts carry permanent identification and that the insurer disclose and obtain the consumer's consent to the use of non-OEM parts).

Paige is moving from Texas to Delaware, which has an add-on no-fault law. This means that, in Delaware,

- people injured in an auto accident are not permitted to sue the driver who caused the accident. C - no-fault benefits apply in addition to tort liability (In states with add-on no-fault laws, no-fault coverages are added to the applicable auto liability system, without limiting an injured party's right to sue in tort). - benefits available from more than one applicable policy may be added up, or stacked. - no-fault benefits apply in place of tort liability.

Maryann looks out the window and sees that her car is being towed from its parking space on the street in front of her home. The other-than-collision coverage of her personal auto policy will cover Maryann's loss if further investigation proves that the

- police had a warrant to seize the car because it was seen at a crime scene. C - tow truck operator was stealing the car (Theft is a covered cause of loss, but confiscation by a government authority is specifically excluded from coverage). - car was being towed because it was parked illegally. - car was being repossessed because Maryann failed to make loan payments.

When parking his company truck at the end of every business day, Troy backs it into his designated parking space until the truck's bumper touches the fence surrounding the neighboring business's property. This gradually weakens the fence until one day it falls down. The neighboring business that owns the fence asks Troy or his employer to pay for the repairs. According to the employer's business auto policy, the damage to the fence

- qualifies as property damage because the fence surrounds the neighboring business' property. - does not qualify as property damage because bumping the fence was intentional. - does not qualify as an accident because the damage took place over a period of time. C - qualifies as property damage caused by an accident (The policy covers property damage caused by an accident, and the term accident is defined broadly enough to encompass injuries or damaging events that took place over a period of time).

Because it would cost more to repair Diana's sedan than it will cost to purchase a comparable used sedan, Diana's insurer declared that her car was a(n)

- salvage vehicle. - lost cause. C - constructive total loss (When the cost of repairing the damaged vehicle exceeds the vehicle's pre-loss value, the vehicle is treated as a constructive total loss). - total wreck.

Irene was convicted of driving under the influence of alcohol. Because the conviction occurred in a state with a financial responsibility law, Irene will be required to

- spend at least one night in jail. C - show proof of insurance or other evidence of financial responsibility (Financial responsibility laws require a motorist involved in a serious traffic violation to furnish evidence of financial responsibility, generally by providing evidence of insurance). - pass a breathalyzer test. - pass a field sobriety test.

Mark's business owns only private passenger vehicles, so Mark wants his business auto policy (BAP) to provide liability coverage and specified causes of loss coverage only on private passenger vehicles that the firm owns. The declarations of his BAP should place

- symbol 2 next to the liability coverage and symbol 3 next to specified causes of loss coverage. C - Symbol 3 next to the liability coverage and the specified causes of loss coverage (Symbol 3 is used to designate coverage on owned private passenger autos). - symbols 2, 8, and 9 next to the liability coverage and symbol 4 next to the specified causes of loss coverage. - symbol 1 next to the liability coverage and symbol 3 next to the specified causes of loss coverage.

Paula is injured when her vehicle is struck by Jeffrey's truck that is insured under a business auto policy (BAP). Paula's husband sues Jeffrey in an attempt to recover damages for her injuries. According to the bodily injury definition in Jeffrey's BAP, all the following would qualify as bodily injury EXCEPT:

- the pneumonia Paula developed because her lung was punctured in the accident. - the broken leg Paula suffered in the accident. - Paula's ultimate death as a result of the injuries sustained in the accident. C - the trauma and mental anguish for which Paula was being treated as a result of the accident (Bodily injury includes bodily injury sickness, disease, or death, but it does not include mental trauma).

Hyde Excavating Company owns many different motorized vehicles. Because it may be difficult to determine whether a specific vehicle will be categorized as an auto or as mobile equipment, Hyde would be well advised to purchase its commercial general liability insurance and its business auto insurance

- with different liability limits. - with the same liability limits. C - from the same insurance company (To avoid differences of opinion as to whether a particular vehicle is mobile equipment covered by a CGL or an auto covered by a BAP, it is advisable to purchase both the CGL and the BAP from the same insurer). - from different insurance companies

Some of the coverages in Carmella's personal auto policy (PAP) apply only to vehicles that fall within her policy's definition of "your covered auto." Which vehicles are included within this definition?

C - Boat trailer that she sometimes tows with her station wagon (An owned trailer that is designed to be pulled behind a private passenger auto falls within the definition of "your covered auto.") - Boyfriend's sports car that she sometimes drives - Convertible she rents when she takes a winter vacation in the south - Utility trailer she sometimes borrows from a neighbor

Tia and her sister Kara dislike riding the school bus, so they pool their summer earnings to buy a car and pay for a personal auto policy (PAP). What is true about their PAP coverage in this situation where the car it insures has two owners?

C - Both sisters are covered if they add the joint ownership coverage endorsement (An unendorsed PAP does not recognize joint ownership except for a married couple, but coverage is available under the joint ownership coverage endorsement for this vehicle that is owned by two or more resident relatives). - Both sisters are covered if they live in the same household. - Both sisters are covered because they are related. - Both sisters are covered if they are both named in the declarations.

Because Lynda was cited for failure to comply with the requirements of her state's compulsory insurance law, she may face any of the following penalties, EXCEPT:

C - Cancellation of her insurance (Lynda was cited because she did not have insurance, so she has no auto insurance policy to cancel). - Monetary fine - Impoundment of her car - Jail term

Knowing that constituents are unhappy with his state's current no-fault insurance law, William, a legislator in State X, wants to introduce legislation that would permit car owners, when buying insurance, to decide whether to purchase coverage under the traditional tort liability system or under a no-fault system that would provide first-party benefits but restrict their right to sue. Some states have already introduced this type of a plan, which is referred to as a(n)

C - Choice no-fault plan (Policyholders in states with a choice no-fault plan may choose whether they are covered on a no-fault basis). - Prime no-fault plan. - Add-on no-fault plan. - Modified no-fault plan.

Before buying a motorcycle, Luciano asks to have the miscellaneous type vehicle endorsement added to his personal auto policy (PAP). When completing the application, he is asked whether he wants to exclude the passenger hazard. If Luciano excludes the passenger hazard, what will happen?

C - His policy will exclude liability coverage for bodily injury to a passenger (If the passenger hazard is excluded, no liability coverage applies for any insured for bodily injury to any passenger riding on the described vehicle). - His policy will exclude coverage for any property on the motorcycle that belongs to a passenger. - His policy will provide liability coverage for bodily injury to a passenger. - His premium will be higher.

Chris did not pay the premium to renew his insurance policy at the end of the policy term. At the end of the policy term, what will happen to his policy?

C - It will automatically terminate (Automatic termination occurs at the end of the policy period when the policyholder does not renew a policy and fails to pay the renewal premium when it is due). - It will be rescinded. - It will be subject to assignment. - It will automatically renew.

Because his own trailer had a flat tire, Johnnie borrowed Nadia's trailer for use in his landscaping business. Both Johnnie and Nadia have business auto policies that include liability coverage. While Johnnie is turning a corner, the trailer sideswipes a parked car. Who should pay for the damage to the parked car?

C - Johnnie's insurer (Since the trailer is connected to an auto Johnnie owns, liability coverage for the trailer is primary under Johnnie's BAP). - Nadia's insurer - Johnnie - Nadia

In which of the following situations would other than collision coverage not apply to Kim's loss?

C - Kim's vehicle hits a parked car (Collision covers an insured's auto's impact with another object or vehicle or the upset of the insured's auto). - Kim's vehicle collides with a low-flying goose. - Kim's vehicle is vandalized. - Kim's vehicle catches fire.

Orlando and Monroe, avid race fans, have personal auto policies (PAPs). Wanting to race but fearful of risking damage to their cars, they each steal a car. The stolen car Monroe is driving rear ends the stolen car Orlando is driving, and Orlando is seriously injured. What insurance, if any, should pay for Orlando's medical bills?

C - No PAP covers injury sustained by the driver of a stolen car (Monroe's liability insurance does not apply to a stolen car, and the car owner's insurance does not cover Monroe for the same reason. Although the car Orlando was driving was struck by an uninsured vehicle, uninsured motorists coverage does not apply because he did not have permission to drive it). - Monroe's PAP's liability insurance applies. - Orlando's PAP's uninsured motorists coverage applies. - The uninsured motorists coverage on the stolen car Orlando was driving applies

Darrel's car is insured under a personal auto policy (PAP) that includes liability, collision, and other-than-collision coverages. Darrel buys a heavy duty pickup truck with a 12,000-pound gross vehicle weight rating, which he now parks behind his car in the driveway. According to Darrel's PAP, what kind of coverage does Darrell have, if any, on the truck?

C - No automatic coverage because of its high weight rating (An insured cannot expect automatic coverage for trucks with a gross vehicle weight of 10,000 pounds or more). - Automatic liability coverage if he reports it to the insurer within 14 days - Automatic liability coverage for the remainder of the policy period - Automatic collision coverage if he reports it to the insurer within four days

In states with a no-fault law, what coverage may replace the personal auto policy's medical payments coverage?

C - Personal injury protection (PIP) coverage (Medical payments coverage is optional in most states, and it may be replaced by personal injury protection (PIP) coverage in states with a no-fault law). - Personal injury coverage - Personal and advertising injury (PAI) coverage - Bodily injury coverage

Augusta wants her business auto policy to provide liability coverage on every auto her business owns now or adds while her policy is in force, but she sees no need for coverage on any other vehicles. For liability coverage, what symbols should the declarations on Augusta's policy use?

C - Symbol 2 (Symbol 2 covers all autos owned at the beginning of the policy period plus any owned autos acquired during the policy period). - Symbols 1 and 2 - Symbols 3 and 4 - Symbol 7

Mauricio drives The Flower Shop's van to deliver fresh flowers to Leila, a regular customer. He trips on steps leading to her porch. The flowerpot he drops makes a big divot in her freshly painted porch floor. How will The Flower Shop's business auto policy (BAP) respond to Leila's property damage liability claim, if at all?

C - The claim is covered because the damage occurred while Mauricio was unloading the vehicle (The handling of property exclusion would preclude coverage after the flowers were moved to the place where they were finally delivered. Since Mauricio was still on his way from the van to Leila's house, the exclusion does not apply). - The claim is excluded because the damage occurred away from the vehicle. - The claim is covered by the commercial general liability (CGL) insurance policy but not by the BAP. - The claim is excluded because the vehicle was not damaged.

What is the purpose of uninsured motorists coverage?

C - To protect insureds from drivers who have no auto liability insurance (The purpose of uninsured motorists coverage is to protect insureds from financially irresponsible drivers who have not purchased auto liability insurance and to not have other financial resources for paying people injured by their negligence in an auto accident). - To protect uninsured drivers from claims brought by people they might injure. - To protect insureds from drivers with inadequate limits of auto liability insurance. - To protect uninsured drivers from claims for damage to their own autos.

What is the purpose of underinsured motorists coverage?

C - To protect insureds from drivers with inadequate limits of auto liability insurance (The purpose of underinsured motorists coverage is to protect insureds from drivers who have not purchased limits of auto liability insurance that are high enough to cover the insured's bodily injury claim). - To protect insureds from drivers who have no auto liability insurance - To pay the deductible for underinsured drivers whose autos are damaged - To protect underinsured drivers from claims brought by people they might injure

Cozzie Company has a business auto policy with Insta-Insurer with a $1 million liability limit. Cozzie is sued after one of its employees, while making a business delivery, is involved in a traffic accident in which several people were injured. Insta-Insurer has been defending Cozzie and the employee in this lawsuit. At what point will Insta-Insurer's obligation to defend or settle this suit end?

C - When Insta-Insurer has paid $1 million in judgments or settlements (The insurer's duty to defend or settle ends when the liability coverage limit has been exhausted by payment of judgments or settlements). - When Cozzie Company admits its driver is responsible for the accident. - When Insta-Insurer has spent $1 million in judgments, settlements, and defense costs. - When Cozzie Company hires its own defense attorney.

When his sports car was returned from the body shop following repairs for collision damage, Guillermo was dismayed to learn that the shop had used parts that were not made by the car's manufacturer. What did the insurer apparently permit the shop to use?

C - aftermarket (or non-OEM) parts (Parts not manufactured by the original equipment manufacturer (OEM) that built the car are known as aftermarket parts or non-OEM parts). - unauthorized parts - nonadmitted parts - OEM parts

Sloan's business auto policy has a $500,000 limit that applies to the liability coverage. This means that the insurer will not pay more than $500,000 in damages for

C - all claims resulting from a single accident (The limit applies per accident). - the term of the policy. - all covered losses during the policy term. - a single claim.

Elbert is the named insured in a business auto policy. This means that Elbert is considered an "insured" when he is using

C - any covered auto (The named insured (Elbert) qualifies as an insured under the liability coverage for any covered auto. Which vehicles are covered autos depends on the use of coverage symbols. Symbol 1, for example, would signify coverage for any auto). - any auto. - any owned or nonowned auto. - any auto listed in the policy declarations.

The cries of her young daughter distracted Jodie while she was driving the child to school. Jodie collided with Emanuel's car, pushing it into a telephone pole. Emanuel's car was damaged and the telephone pole was destroyed. The resulting traffic jam delayed other drivers from getting to work on time. As defined in Jody's personal auto policy, all the following claims involve property damage EXCEPT:

C - claims for lost wages by the other drivers who were late to work (The claims for lost wages by drivers in a traffic jam are not concrete and measurable, and are therefore not covered as property damage under a personal auto policy). - the utility company's claim for destruction of the telephone pole. - Emanuel's claim for expenses to rent a temporary substitute car. - Emanuel's claim for damage to his car.

Raymond recently moved to a state with a compulsory insurance law. This means that he must furnish evidence of insurance or other proof of responsibility

C - in order to register his car or pass a state inspection (Compulsory insurance laws require a motorist to furnish proof of financial responsibility as a condition of registering the auto or procuring a state inspection). - if he commits a serious traffic violation. - if he is suspected of driving under the influence. - if he is involved in a serious accident.

When he completed an application for auto insurance, Chuck was also asked to sign a residency statement, which was required in his state. By signing this statement, he affirms that he

C - is a resident of the state or his vehicle is principally garaged in that state (The residency statement requires that the insured be a resident of the state or indicates that the insured is not a resident of that state, but the vehicle is principally garaged in that state). - has a homeowners policy with the same insurer. - lives at the address stated in the application. - intends to establish residency in the state.

Kendra broke her toe in an auto accident in a state that adheres to the traditional auto liability system (where a no-fault statute does not apply.) Kendra is a waitress who had difficulty paying the medical bills because she could not work until her toe healed. She can sue the driver that caused this accident for damages involving her

C - medical bills, lost wages, and pain and suffering (There are no restrictions on the amount of damages an injured party may claim under the traditional auto liability system, so Kendra may sue the at-fault motorist for both economic (lost wages) and noneconomic (pain and suffering) damages). - medical bills, but not her lost wages or her pain and suffering. - pain and suffering but not her medical bills or her lost wages. - lost wages, but not her medical expenses which should be covered by her own insurance.

As part of his sales training program, Tyler accompanies Janelle in her calls on their employer's accounts. Janelle's company car has liability coverage under their employer's business auto policy (BAP). Janelle collides with a lamppost and Tyler is injured. His subsequent bodily injury claim against Janelle is

C - not covered by the BAP because of the fellow employee exclusion (The BAP's fellow employee exclusion makes it clear that an employee does not have coverage for bodily injury to any fellow employee arising out of and in the course of the fellow employee's employment). - covered if he proves that the accident was caused by Janelle's negligence. - not covered by the BAP because of the contractual liability exclusion. - covered subject to a deductible.

A complete business auto policy (BAP) will include all of the following EXCEPT:

C - personal auto policy (Though the basic coverages of the BAP can be modified with endorsements, they are not written in combination with a personal auto policy. However, a BAP can be made a part of a commercial package policy that includes other coverage forms). - business auto coverage form - common policy conditions form - business auto declarations

Buzz and Jim were drag racing when Buzz's car ran off a cliff. Paramedics arriving on the scene immediately pronounced Buzz dead. His auto insurance included no-fault benefits. Buzz's family members

C - will receive nothing because Buzz was involved in an auto race when the crash occurred (No-fault benefits are typically denied to persons involved in auto races). - will receive nothing because no medical expenses were involved. - will receive nothing because no-fault benefits do not include death benefits or funeral expenses. - are entitled to recover death benefits and funeral expenses.

Under which coverage part does the personal auto policy state it will provide a defense?

Part B-Medical Payments Part C-Uninsured Motorists C: Part A-Liability (The insuring agreement of Part A-Liability states that the insurer will provide coverage for defense costs). Part D-Damage to Your Auto

The driver's side air bag broke Archie's nose when he collided with another car. Four years later, Archie's doctor recommended surgery to correct a sinus problem that originated with the broken nose. Archie submitted a claim under the medical payments coverage of his personal auto policy (PAP). Why is his claim denied?

The claim amount exceeded the personal auto policy's medical payments limit. Archie's medical expenses were incurred more than three years after the date of his accident. Auto medical payments coverage does not apply to the insured's own injuries, regardless of fault. Archie should have submitted the claim to the manufacturer of the defective airbag.