Unit 8 (Auto)

An auto policy would provide coverage for an auto driven in all of the following places EXCEPT: A) Paducah, Kentucky. B) Honolulu, Hawaii. C) Mexico City, Mexico. D) Alberta, Canada.

Mexico City, Mexico

Lisa is injured by a hit and run driver while driving he car on a work related errand. Assuming she carries a $100,000 limit for uninsured motorists coverage, how much of the $125,000 in medical expenses would Lisa be paid under her personal auto policy?

$0 (Workers Comp)

The insured has an auto policy with liability limits of 30/60/10. He negligently runs off the road and causes $70,000 damage to an apartment building. How much will the policy pay for the damage to the building? A) $10,000.00 B) $25,000.00 C) $50,000.00 D) $70,000.00

$10,000

The insured has purchased an additional car. How many days after purchase does the insured have to request that the new car is added to her personal auto policy?

14 days

Under the medical payments coverage of a personal auto policy, the insurer pays for medical expenses and funeral services incurred within how many years from the date of an accident? A) One. B) Two. C) Five. D) Three.

3

Under an auto policy, Other than Collision coverage would apply to which of the following situations? A) All of the car's tires are stolen. B) An insured has her car parked at an airport, and a suitcase is stolen from the car. C) The car rolls over after hitting a patch of ice. D) An insured breaks a window to gain access because the keys were left inside.

All of a cars tires are stolen

Which alternative dispute method takes place when the insured and insurance company cannot agree on the amount to be paid on a valid claim?

Appraisal

if a dispute arises over whether an insured is entitled to uninsured motorists coverage, what process is used to settle the dispute?

Arbitration

B.A.I.L.E.D (Supplementary Payments)

Bonds Aid Interest Loss of earnings Expenses Defense

While backing her car into a parking space on a neighborhood street, Melanie struck a fire hydrant with her bumper. Which coverage under Melanie's personal auto policy (PAP) will cover the damage to the bumper? A) Collision. B) Medical payments. C) Comprehensive. D) Liability.

Collision (impact with vehicle, impact with object, or rolling vehicle)

What is Part B?

Medical Payments Coverage

While driving down the street, an insured swerves to avoid a pedestrian, goes over a curb, and damages a neighbors fence. Which of the following will pay for the repairs to the fence?

The drivers automobile policy under the property damage liability provisions

An insured rents a car while on vacation in Canada and causes an accident. What coverage is provided for this loss under the personal auto policy? A) The loss is covered if the insured has purchased a foreign country endorsement. B) The loss is covered under an unendorsed policy. C) The loss is not covered. D) The loss is covered if the insured has purchased a rental car endorsement.

The loss is covered under an unendorsed policy

automobile comprehensive coverage insured all of the following perils EXCEPT -glass breakage -collision -theft -fire

collision (comprehensive = Other than collision)

Under Part D of the personal auto policy, a temporary substitute auto is considered

a nonowned auto

Physical damage losses under the personal auto policy are reimbursed on what basis?

actual cash value or cost to repair or replace, whichever is less

in automobile insurance, the term supplementary payments refer to payments

covering reasonable expenses incurred at the insurers request and other specified expenses that are not subject to the policy limit

Which personal auto policy endorsement may be issued to someone who does not own a vehicle but drives rented autos?

named non-owner coverage endorsement

Which of the following terms states that the company will pay only its share of a loss that is also covered by other insurance? -other insurance -out of state coverage -limits of liability -underinsured motorists

other insurance

If a vehicle collides with a boulder that came tumbling down the side of a mountain, what coverage would pay for the damage?

other than collision

All of the following statements regarding Part D - coverage for damage to your auto are correct EXCEPT -this coverage pays for direct and indirect loss to the named insureds covered auto -this coverage is commonly known as physical damage coverage -this coverage covers all personal property in the vehicle -this coverage pays for direct and indirect loss to the named insured rental or borrowed cars

this coverage covers all personal property in the vehicle

Two personal auto policies cover one vehicle. Company A's limit of liability is $100,000 and Company B's limit of liability is $300,000. How much will Company A pay for a liability loss in the event of an accident when the damages total $100,000? A) $50,000.00 B) $75,000.00 C) $100,000.00 D) $25,000.00

$25,000 (company A has 25% so pays 25%)

What is Part D?

Coverage for damage to your auto "physical damge"

Which of the following losses would NOT be excluded under Coverage A of the personal Auto policy? -Bill uses his car as a taxicab on the weekends. One evening, he hit a parked car while pulling in a driveway to pick up a passenger -Out of anger and intentionally, Julia rear ends her brothers car causing damage to the bumper -Justin hits a pedestrian after running a red light with his motorcycle -Denise's 16-year-old son hits a parked car while on his way to pick up his siblings

Denise's 16 year old son hits a parked car while on his way to school to pick up his siblings

Tammy was struck by a hit-and-run driver and suffered injuries to her neck. Which part of her personal auto policy, if any, will cover this loss? A) Her collision coverage pays the medical bills. B) Her uninsured motorist coverage pays her medical bills. C) Her liability coverage pays her medical bills. D) Her policy will not cover the loss; she must sue the other driver to recover these expenses.

Her uninsured motorists coverage pays her medical bills

Part A of the personal auto policy would apply in which of the following situations? A) Driver who intentionally causes an accident. B) Garage mechanic while test-driving the insured's auto. C) Insured's 13-year-old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars. D) Driver using the insured vehicle to transport people for a fee.

Insured's 13-year-old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars.

While driving to work one morning, Joe is hit from behind by a car driven by Sam. Joe is injured and taken to the hospital where he is admitted with a broken shoulder and other internal injuries. During the police investigation, it is determined that Sam is 100% negligent and di not have automobile insurance. What coverage will indemnify joe for his injuries?

Joe's uninsured motorist bodily injury coverage

Jane insures her car with ABC Insurers. Which of the following individuals describes a family member on Jane's policy? A) Uncle Joe visiting from Texas. B) Robert, her ex-husband who moved out last week. C) Renee, a friend, who lives with Jane. D) Maggie, her older sister, who lives with Jane.

Maggie, her older sister, who lives with Jane

What type of endorsement would be used to insure a recreational vehicle under the personal auto policy? A) Miscellaneous type vehicle endorsement. B) Motor home endorsement. C) Extended vehicle endorsement. D) Joint ownership coverage.

Miscellaneous type vehicle endorsement

Example of a loss that would be covered under part B of the personal auto policy?

Nia is picking up the soccer team after a game. She accidently closes the door to the van and crushes a Childs finger

Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company? A) No, the agent has to make this request in writing. B) Yes, the insured has the ability to change the policy at the time of the application. C) No, a written endorsement by the insurer is the only way to change the policy. D) Yes, as long as the request is done in writing.

No - a written endorsement by the insurer is the only way to change the policy

Monica uses her car for her skin care business. One night, she drives the car to meet a friend at a restaurant. While driving home, Monica loses control of the car, hits a parked car, and rolls the car over. Monica is severely injured and taken to the hospital. Will medical payments coverage reimburse Monica for her medical bills>

No, there is no coverage for injuries while occupying a vehicle used for the insureds business

If you hit a deer what is it covered under?

Other than Collision

During a storm, a tree branch fell on Tina's car and broke the windshield. Which coverage of her personal auto policy will cover the damage to the car?

Other than collision coverage of Part D

Michael loses control of his car and hits a parked car. Which coverage of Michael's personal auto policy will pay for the damage to the parked car?

Part A

The personal auto policy covers both property and liability coverages. Which covers property damage?

Part D

The personal auto policy coverage applies to losses, accidents, or occurrences that take place during the policy period in all the following locations EXCEPT -Phillipsburg, St. Martin -Dover, Delaware -San Juan, Puerto Rico -Alberta, Canada

Phillipsburg St. Martin

What is Part C?

Uninsured motorists coverage

An insured has to testify in court at the insurance company's request. What is the amount of reimbursement that the insured can receive for loss of earnings due to the time spend in court?

Up to $250 a day

Tim and Michelle were both injured when they were struck by a car while walking across the street. The driver, who could not be identified, left the scene of the accident. Would this loss be covered under Tim and Michelle's personal auto policy?

Yes, it would be covered under Part C - uninsured motorists coverage

Howard borrows his neighbors car because his son took his car to college for a week while moving into the dorm. Under Howards automobile policy, his neighbors car is considered

a nonowned automobile ( one that may be driven by the insured, but does not own it. owner gives permission to the insured to use vehicle)

All of the following vehicles are eligible for coverage under the PAP EXCEPT -a minivan with a 7,500 gross vehicle weight -a private passenger auto -a pickup with a gross vehicle weight of 15,000 pounds -a four wheel drive SUV

a pickup with a gross vehicle weight of 15,000 pounds

Which of the following autos owned by the named insured could NOT be covered under the personal auto policy for losses occurring from physical damage or liability? -a pick-up truck used on the insureds farm -a sedan that the insureds licensed children drive on occasion -a station wagon used to make deliveries for the insureds small business -a small trailer designed to be pulled behind a car

a station wagon used to make deliveries for the insureds small business

Howard borrows his neighbor's car because his car is in the body shop after his oldest son had an accident on a trip home from college. Under Howard's automobile policy, his neighbor's car is considered a (n): A) temporary substitute automobile. B) nonowned automobile. C) uninsured automobile. D) owned automobile.

a temporary substitute vehicle

An automobile insurance plan for drivers with poor driving records is also known as

an assigned risk plan

Participating insurance companies have agreed to share the risk of insuring individuals with poor driving records. This voluntary agreement is called

an assigned risk plan

Matt has been nonrenewed by his auto insurance company because he had 3 speeding tickets and 2 at fault accidents in the last 9 months. Matt will most likely need to obtain insurance from

an assigned risk plan (provide auto insurance for drivers with poor driving records)

Which of the following is considered a collision loss? -an automobile is swept away in flood waters -a bird flies into the windshield of an auto -an automobile is stolen from a parking lot -an automobile flips over an embankment onto its side

an automobile flips over an embankment onto its side

Jeffrey bought a car yesterday for his daughter to drive to school and her job. Under Jeffreys automobile policy, this car is considered

an owned automobile

The covered auto is defined in the policy as all of the following EXCEPT -any trailer owned by the insured or spouse -any auto used as a temporary substitute while an insured auto is being repaired -any additional auto acquired in the past 30 days -any auto shown in the declarations

any additional auto acquired in the past 30 days

Which of the following is considered a uninsured/underinsured motor vehicle?

car insured for less than the limits required by the state

Craig was driving his family in his owned station wagon on vacation in Wisconsin when a deer ran out in the road and collided with the front end of the wagon. Craig had the car towed to the nearest town, where the only car repair shop told him that it would take at least a week to get the parts to repair the engine. Craig's automobile policy provides coverage for transportation expenses. All of the following statements about transportation expenses are correct EXCEPT: A) the maximum coverage is $600. B) coverage starts 48 hours after a car is damaged by an other than collision loss. C) there is a $20 per-day limit for expenses. D) no deductible applies.

coverage starts 48 hours after a car is damaged by an other than collision loss

Example of an exclusion about Part A liability coverage

damage to property owned and being transported by the insured is covered (specifically excluded in the liability section)

Every state requires that each person be able to prove he is financially prepared if involved in an accident. Suppose your state requires minimum liability limits of 25/50/10. What is the name of that law? A) Compulsory insurance law. B) Tort law. C) Unsatisfied judgment law. D) Financial responsibility law.

financial responsibility law

All states have financial responsibility laws that require each driver to prove that he can pay for bodily injury or property damage liability losses arising out of auto accidents. These are also known as

financial responsibility laws

Which of the following damages is covered under Part D - coverage for damage to the insureds auto? -mechanical breakdown not resulting from theft -freezing -wear and tear -flood

flood

All of the following are excluded under collision or other than collision coverages EXCEPT -flood damage -road damage to tires -damage to awnings, cabanas, or other equipment -damage due to wear and tear

flood damage

Mary was involved in an accident with a hit-and-run driver. The car was damaged. Mary is required to comply with all of the following duties EXCEPT: A) protecting the car against further damage. B) calling the police. C) following the hit-and-run driver to get a valid identification. D) permitting the insurer to inspect the damaged car.

following the hit and run driver to get valid identification

Which one of the following would NOT be paid as supplementary payments under Part A of the personal auto policy? -expenses the insurer incurs in investigating claims -the insureds lost earnings up to $200 per day because of court appearances -funeral expenses for the insured -interest accruing after a judgement is entered which was defended by the insurer

funeral expenses for the insured

Jim borrows a company van to take his son to college. As the trip takes more than 10 hours, he would like to share the drive with Julia, his wife. What endorsement should Jim add to the company commercial auto policy to make sure he has the proper coverage? A) Employees as insureds. B) Individual named insured. C) Drive other car coverage. D) Additional insured.

individual named insured (provides the insureds family members with liability coverage as a named insured)

Cecil sells his car and buys another one to replace it. How does the liability coverage in his personal auto policy apply to the replacement vehicle? A) It is not covered; Cecil must cancel the existing policy and purchase a new one for the replacement vehicle. B) It is automatically covered. C) It is automatically covered for 14 days, but Cecil must notify the insurer for coverage to continue beyond that point. D) It is not covered until Cecil notifies the insurance company.

it is automatically covered

Which of the following statements regarding underinsured motorists coverage is NOT correct? -it pays the difference between an insureds actual damages and the amount the insured was able to collect -it is mandatory in all states -this coverage indemnifies the insured for bodily injury, but not property damage -this minimum financial responsibility limit imposed by most states often falls short of fully reimbursing the insured for a loss

it is mandatory in all states

Which one of the following would be considered a temporary substitute vehicle under the terms of the personal auto policy? -company car provided by an employer -new car purchased by the insured 3 days ago -loaner vehicle provided by an auto repair shop -truck borrowed from a friend while moving

loaner vehicle provided by an auto repair shop

Which of the following is NOT one of the requirements for a loss to be paid under the uninsured motorists coverage of the personal auto policy? -insured is legally entitled to damages -loss is sustained by an insured -other than vehicle meets policy definition of uninsured vehicle -loss involves property damage to insured auto

loss involves property damage to insureds auto

All of the following vehicles can be insured under an unendorsed personal auto policy EXCEPT -Motorcycles -newly acquired vehicles -trailers hitched to the insured vehicle -rental cars

motorcycles

Which one of the following auto policy coverages would pay for damage to the insureds car that the insured motorist caused by hitting a farmers cattle while driving through the country

other than collision

comprehensive coverage pays for all of the following damages EXCEPT -overturning of the auto -hitting a deer -explosion -glass breakage

overturning of the auto

The term occupying means all of the following EXCEPT -in a vehicle -upon a vehicle -owning a vehicle -getting into, onto, out of, or off a vehicle

owning a vehicle

Which of the following individuals would not be covered under Coverage B - medical payments coverage? -the named insured who was driving the car -the family members of the named insured -passengers in the named insureds car -passengers in the car that the named insured hit in a collision

passengers in the car that the named insured hit in a collision

All of the following statements about the term covered auto are correct EXCEPT -personal auto insurance follows the driver, not the vehicle -private passenger autos under 10,000 pounds and 4 wheels are covered autos -any trailer owned by the named insured is considered a covered auto -if a neighbor borrows your car with permission, your policy covers any at fault damages up to the policy limits

personal auto insurance follows the driver, not the vehicle

What does Part D Not cover

personal property in the vehicle

What is a no-stacking rule?

prevents the insured or injured person from collecting medical payments from more than 1 policy or coverage, such as uninsured motorist

If the insured's policy pays for bodily injury (BI) or property damage (PD0 caused by an uninsured motorist, the insurance company has the right to sue the uninsured motorist for the damages it is paid. This is also known as

subrogation

Mary was involved in an accident with another driver. The car was damaged. Her insurance company reimburses her for the damage and seeks recovery from the negligent driver. What is this process called? A) Other insurance. B) Arbitration. C) Subrogation. D) Retention.

subrogation

Towing and labor coverage covers all of the following EXCEPT -towing costs after a breakdown -labor for changing a tire at the scene of a breakdown -towing costs after an accident -the cost of a fan belt replaced at the scene of a breakdown

the cost of a fan belt replaced at the scene of a breakdown

Mary was involved in an accident with a hit-and-run driver. Her car was damaged. Which of the following items would be covered under the collision coverage in the personal auto policy? A) The front windshield is shattered. B) The vehicle is stolen before the tow truck can tow it to the body shop. C) The vehicle is towed to the body shop. D) Mary's luggage in the trunk is destroyed.

the front windshield is shattered

Roberta shares carpool expenses with co-workers. During her turn driving to work, she is involved in an accident in which one of her passengers is injured and her car is damaged. How does her personal auto policy respond? A) The insurance company will cover the auto repairs and injuries. B) The insurance company will not cover the auto repairs or injuries. C) The insurance company will only cover the auto repairs. D) The insurance company will not cover the auto repairs.

the insurance company will cover the auto repairs and injuries

Which of the following statements is TRUE regarding the termination provision? -the insurer may cancel or nonrenew an auto policy at any time during the term of the policy? -the insurer may only cancel the policy at renewal -the insurer must provide written notice to the insured for policy cancellation or nonrenewal -the insured may only cancel the policy at renewal

the insurer must provide written notice of the insured for policy cancellation or nonrenewal

the personal auto policy uses the words you and your in the declarations. This is referring to

the named insured and the resident spouse

The insured rear-ends another vehicle that is stopped at a red light. The driver of the car struck by the insured is badly injured. The insured, his daughter and her friend were in the car and were also injured. Part B of the insured's personal auto policy will pay medical expenses for all of the following EXCEPT: A) the insured. B) the occupant of the car struck by the insured. C) the insured's daughter's friend. D) the insured's daughter.

the occupants of the car struck by the insured

If a California resident with a personal auto policy with the minimum liability limits has an accident in a state that requires higher limits, which of the following will occur? A) The policy will automatically provide the required higher limits at no extra charge. B) The loss is not covered. C) The policy will provide the higher limits, but the insured must first pay the additional premium. D) The insured must first purchase an other states coverage endorsement.

the policy will automatically provide the required higher limits at no extra charge

Personal auto liability insurance provides coverage in all of the following situations EXCEPT when: A) the insured accepts money for using the auto in a car pool. B) the insured's 12-year-old child takes the auto for a joy ride. C) the insured uses the auto as a taxi. D) a relative living in the same household as the insured takes the auto without permission.

when the insured uses the auto as a taxi

How much will the personal auto policy pay for a rental car if the insured vehicle is stolen? A) $20 per day, up to $600 maximum. B) $25 per day, up to $650 maximum. C) $30 per day, up to $900 maximum. D) Nothing.

$20 per day up to $600 maximum

Part B covers reasonable expenses for necessary medical and funeral services incurred within how many years of the date of the injury regardless of fault?

3 years

What is Part A?

Liability Coverage

While driving to work, Leonard is eating his breakfast, reviewing his appointment book, and talking on his cell phone. He runs a red light and collides with a commuter van. The vans occupants are hospitalized. Which part of Leonard's personal auto policy covers the occupants injuries and damage to the van?

Part A (Liability Coverage)

Lee was injured when she lost control of her car and hit a guardrail. Which part of her personal auto policy will cover her medical expenses

Part B

Medical payments coverage is part B in the personal automobile policy. All of the following statements about medical payments coverage are correct EXCEPT -no coverage is available if the vehicle is being used as a residence -Part B covers reasonable expensed for services incurred within 5 years of the date of injury -coverage is provided for the named insured if hit by a car while waling along a road -coverage is available if an injury occurs while getting into or out of a vehicle

Part B covers reasonable expenses for services incurred within 5 years of the date of injury

Richard and his wife own two family cars. In addition, Richard is given a company car to makes sales calls. He occasionally uses the company car for personal use and is concerned that he may not have sufficient company coverage. Which of the following is the best advice his agent can give him? A) Richard can add the company car to his automobile policy as car number 3. B) Richard can add the extended nonowned coverage for named individual endorsement to his policy. C) Richard has to rely on the coverage his company gives him and follow their usage rules. D) Richard can add the drive other car endorsement to his policy.

Richard can add the extended nonowned coverage for named individual endorsement to his policy

The personal auto policy considers a newly acquired car to be

a covered auto

Bobby, age 16, borrows his parents' car without their permission and gets into an accident. Which of the following statements about coverage under the parents' personal auto policy is CORRECT? A) Bobby is covered by his parents' policy because he is included in the definition of named insured. B) Bobby is not covered for this accident because he used the car without permission. C) Bobby is not covered because it was not his car. D) Bobby is covered by his parents' policy because he is a family member.

bobby is covered by his parents policy because he is a family member

Which of the following terms means bodily harm, sickness, or disease, including death? -personal injury -bodily injury -property damage -property injury

bodily injury

according to the out of state coverage provision in a personal auto policy, while temporary driving in another state the insurer will pay

the higher amount of the insureds liability policy limit or the state minimum liability requirements

What would be covered under collision coverage

the vehicle slid on ice and hit a tree

In addition to collision and Other than collision coverage, Part D provides coverage for up to $20 a day, with a maximum of $600, for

transportation expenses

Which pays the difference between the insureds actual damage for bodily injury and the amount of liability insurance that the insured could collect from the at fault driver?

underinsured motorist coverage