Ch.5 - Auto Insurance Flash Cards

Question 1

If an insured is injured while driving his own car, what coverage in his personal auto policy will pay for the loss?

Answer 1

Part B: Medical Payments

Question 2

What is the limit of liability in Part D: Coverage for Damage To Your Auto?

Answer 2

The lesser of the ACV of the vehicle or the amount needed to repair/replace the vehicle.

Question 3

What would be considered a newly acquired auto?

Answer 3

A vehicle acquired by the insured during the policy period.

Question 4

If an auto policy has liability limits of 40/60/20, what would be the equivalent combined single limit?

Answer 4

$80,000 (combined total of coverage for bodily injury and property damage)

Question 5

A vehicle rented from a commercial rental company is known as what type of auto?

Answer 5

Hired auto

Question 6

In Personal Auto Policy, to what geographical region does the out-of-state coverage apply?

Answer 6

Any U.S. state or territory, as well as Canada.

Question 7

What is a covered auto?

Answer 7

A vehicle shown in the policy declarations.

Question 8

What is combined limit in an auto insurance policy?

Answer 8

The max amount the insurer will pay on a covered loss.

Question 9

What Personal Auto Coverage would pay for the insured’s travel expenses and loss of earnings while the insured is involved in the settlement process of a covered loss?

Answer 9

Part A: Liability

Question 10

What are the coverage forms used in commercial auto insurance?

Answer 10

Business Auto Coverage Form, Business Auto Physical Damage Coverage Form, Garage Coverage Form, and Motor Carrier Coverage Form

Question 11

What are the 4 categories of uninsured motor vehicles?

Answer 11

1) No insurance or liability bond 2) Insurance is less than what’s required by the financial responsibility laws 3) A hit-and-run accident where the driver cannot be identified 4) The insurer denies coverage or becomes insolvent.

Question 12

Underinsured Motorists (UIM) coverage will pay the difference between which 2 limits?

Answer 12

The insured’s UIM limits and the at-fault driver’s insurance bodily injury limits.

Question 13

When does the Underinsured Motorist coverage apply?

Answer 13

When the motorist is at fault in an accident, but the limits of their auto insurance are not sufficient to cover the bodily injury to another motorist.

Question 14

How does the Auto Medical Payments Coverage endorsement modify the auto policy?

Answer 14

It adds medical payment coverage to a commercial auto policy.

Question 15

What coverages are available in the physical damage section of the personal auto policy?

Answer 15

Collision and other-than-collision coverages

Question 16

What do numerical symbols represent in auto policies?

Answer 16

They define the type of vehicle insured for specific coverages.

Question 17

What type of auto coverage will apply in a hit-and-run accident where the driver cannot be identified?

Answer 17

Uninsured Motorist

Question 18

Coverage for medical payments under a Personal Auto Policy applies to expenses following a covered accident that incurred and services rendered within what time period?

Answer 18

3 years

Question 19

Who does the Garage Coverage form insure?

Answer 19

Auto dealers, service stations, auto repair shops

Question 20

What types of losses are indicated by the split limits in an auto insurance policy?

Answer 20

1) Bodily injury per person
2) Bodily injury per accident
3) Property damage per accident

Question 21

Who is considered insured under Part A: Liability of a PAP?

Answer 21

The vehicle owner or his/her family member or any person using the covered auto with permission.

Question 22

What does the term “you” refer to in a personal auto policy?

Answer 22

The named insured shown in the declarations, and the insured’s spouse (if resident of the same household)

Question 23

How much will a physical damage policy pay for transportation expenses due to a theft of a covered auto?

Answer 23

The policy will pay up to $20 per day, up to a maximum of $600, for transportation expenses incurred by the insured.

Question 24

What are the 2 parts of the Garage Liability Coverage?

Answer 24

Garage Operations - Covered Autos and Garage Operations - Other Than Covered Autos

Question 25

What coverage is provided in the liability section of the business auto coverage form?

Answer 25

The policy will pay for injury or property damage to third parties.

Question 26

When does Uninsured Motorist coverage apply?

Answer 26

When the other party is legally liable, but has no insurance.

Question 27

If an auto policy has split limits of 30/50/25, what is the max amount the policy will pay for injuries to one person in a single accident?

Answer 27

$30,000

Question 28

If an auto policy has split limits of 30/50/25, how much will the policy pay for property damage in a single accident?

Answer 28

$25,000

Question 29

What Personal Auto coverage would pay for damages to a covered auto caused by a collision with a deer?

Answer 29

Other Than Collision (Comprehensive)

Question 30

What losses are excluded from coverage in the liability section of the PAP?

Answer 30

Intentional injury or damage, damage to property owned/transported by the insured, use of a vehicle as a public conveyance, or use of a vehicle without permission.