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Insurance > Chapter 6: Personal Auto Policy > Flashcards

Chapter 6: Personal Auto Policy Flashcards

1
Q

Part A

A

Liability Coverage

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2
Q

Part B

A

Medical Payments

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3
Q

Part C

A

Uninsured Motorist (UM)

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4
Q

Part D

A

Coverage for Damage to Your Auto

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5
Q

Part E

A

Duties After an Accident or Loss

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6
Q

Part F

A

General Provisions

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7
Q

Personal Auto Policy designed to provide insurance for a gross weight vehicle of…

A

10,000 pounds or less

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8
Q

Definitions:
Named insured listed in the declarations

-person(s) who vehicle is titled and registered

A

You and Your

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9
Q

Definitions:

Deemed owned if auto is owned or leased under contract for a continuous period of at least 6 months

A

Private Passenger Auto

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10
Q

Definitions:

Bodily harm, sickness, or disease, including death that results

A

Bodily Injury

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11
Q

Definition:

Trade, profession, or occupation

A

Business

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12
Q

Definition:

Means in, upon, getting in, getting on, getting out, or getting off a vehicle

A

Occupying

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13
Q

Definition:

Designed to be pulled by a private passenger auto or a pickup or van

A

Trailer

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14
Q

Definition:

  • In the declarations
  • Newly acquired auto
  • Trailer that the named insured owns
  • Auto or trailer named insured doesn’t own while being used as a temporary substitute for any other vehicle described in this definition
A

Your Covered Auto

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15
Q

Definition:
Any of the following types of vehicles for which the insured becomes the owner during the policy period
-10,000 pounds or less
-If newly acquired auto is an additional vehicle, insured must report to insurer within 14 days
-Under Part D automatic coverage begins on the date the named insured becomes the legal owner of the vehicle
*coverage ends after either 4 or 14 days
*if dec pg. indicates that either collision or other than collision coverage applies; insured has 14 days to report
*if dec pg. indicates that NO collision or other than collision coverage applies; insured has 4 days to report

A

Newly Acquired Auto

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16
Q

Under Part D, Within how many days must an insured report the purchase of a new vehicle that is replacing an existing vehicle covered by collision coverage?

A

14 days

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17
Q

A private passenger auto includes a leased vehicle as long as the lease contract is continuous for how many months duration?

A

6 months

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18
Q

Supplementary payments:

bail bond

A

Pay up to $250

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19
Q

Supplementary payments:

loss of earnings

A

Pay up to $200

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20
Q

not provided for any insured who:Intentionally causes bodily injury or property damage

  • Is responsible for causing bodily injury to an employee during the course of employment
  • Owns or operates a vehicle while being used as a public or livery conveyance (share-the-expense car pool is not included in public or livery conveyance)
A

Part A Exclusions

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21
Q

not provided for the ownership, maintenance, or use of:-vehicles with fewer then 4 wheels

  • vehicles used mainly for use off public roads (snowmobiles, ATV’s) unless used by an insured in a medical emergency, “trailers”, or non-owned golf carts
  • Not owned by the insured but are furnished to the insured or available for the insured’s regular use, such as a company car
  • Vehicles located inside a racing facility
A

Part A Exclusions

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22
Q

Combined single limit

A

a combined single limit policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD)

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23
Q

“your covered auto” being driven outside the state in which it is principally garaged, Part A extends to provide coverage as required by the financial responsibility or compulsory insurance laws of that state or Canadian province.

A

Out of state coverage

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24
Q

If other auto liability insurance is in place at the time of the loss, the personal auto policy will only pay its share of the loss. That share is the proportion the policy’s limit bears to all insurance in place

A

Part A- Other insurance

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25
Q

Each of the following is a Part A - Liability Coverage Supplementary payment, except:

a. payment for all defense costs
b. $200 a day for loss of earning due to an insurer request to assist in the trial
c. $250 for the cost of a bail bond
d. premiums on appeal bonds

A

a. payment for all defense costs is part of the Part A - Liability Coverage Insuring Agreement, which also includes payment for BI or PD for which the insured is legally responsible

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26
Q

A _____ vehicle is a covered vehicle when Your Covered Auto is being repaired due to a covered loss

a. substitute
b. replacement
c. temporary substitute
d. conditional

A

c. a temporary substitute is also covered if the vehicle is out of normal use due to breakdown, servicing, loss, or destruction

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27
Q
  • pay reasonable expenses incurred for medical and funeral services caused by an accident, sustained by an insured, and incurred within 3 years of the accident
  • Medical payments coverage does NOT require an insured to be legally responsible for causing injuries.
  • Defines insured in Part B as: named insured or any family member occupying any auto or as a pedestrian when struck by a motor vehicle
A

Part B insuring agreement

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28
Q
  • fewer than 4 wheels
  • occupying a vehicle being used as public or livery conveyance
  • occupying a vehicle that is located for use as a residence or premises
  • sustains BI in the course of employment and Worker’s Compensation benefits are either required or available
A

Part B exclusions

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29
Q

limit of liability shown in the Declarations is the maximum the insurer will pay for each person injured in any one accident

A

Part B- Limits of Liability

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30
Q

will pay only the proportion that its limit of liability bears to the total of all applicable limits

A

Part B- Other insurer

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31
Q

A medical payments claim will be paid by the insurer within how many months from the date of the occurrence?

a. 18
b. 24
c. 36
d. 60

A

c. medical payments claim will be paid within 3 years for reasonable expenses for medical and funeral expenses regardless of fault

32
Q
  • doesn’t have insurance
  • bodily injury liability limits are less than those required
  • hit and run vehicle
  • has insurance but the insurer either denies the claim or becomes insolvent
A

Part C- Uninsured Motorists Coverage definition:

33
Q
  • operated by someone who is self-insured
  • owned by any government agency
  • operates on rails or crawler treads
  • mainly for use off public roads
  • permanently located for use as a residence
A

Vehicles NOT included in definition of “uninsured motor vehicle”

34
Q
  • vehicle owned by the named insured or a family member and the vehicle is not insured by this policy
  • an Uninsured Motorists Bodily Injury Liability
  • insured occupying a “your covered auto” while it is being used as a public or livery conveyance
  • an insured is using a vehicle without a reasonable belief that he or she is entitled to drive it
A

Part C exclusions

35
Q

limit of liability shown in dec is the max the insurer will pay in any one accident

A

Part C limit of liability

36
Q

Arbitration

A

each party may select an arbitrator (at each party’s expense) who then jointly select a third arbitrator (with expenses split equally be each party). A decision agreed upon by the arbitrators will be binding as to the insured’s entitlement to, and the amount of, damages.

37
Q

Underinsured Motorists Coverage (UIM)

A

coverage limits are inadequate or insufficient to respond to claims

38
Q

Which of the following is covered under Part C - Uninsured Motorist Coverage?

a. punitive damages awarded for the insured
b. accident was caused by a hit-and-run driver
c. the insured is also covered by Workers’ Compensation
d. a family member is struck by an insured vehicle

A

b. a hit-and-run vehicle can’t be identified and is therefore covered under Part C

39
Q

An uninsured motor vehicle is any of the following, except:

a. a company car
b. a vehicle that does not have insurance
c. a vehicle insured by an insolvent insurance company
d. a vehicle with liability limits less than the state requirement

A

a. besides a company car, a vehicle owned by the insured or a family member or a vehicle furnished or available for the regular use of the named insured or a family member is not considered an uninsured vehicle

40
Q

Transportation expenses

A
  • a max of $20 per day, up to $600
  • during the period beginning 48 hours after the theft, and ending when the auto is returned to use or the insurer pays for the loss
41
Q
  • public or livery conveyance
  • wear and tear
  • war or nuclear hazard
  • electronic equipment, unless it’s permanently installed
  • total loss due to destruction or confiscation or non-owned auto by government or civil authorities
  • a trailer, camper, or motor home
  • custom furnishings and equipment
  • located at racing facility
A

Part D exclusions

42
Q
  • ACV of the vehicle

- max limit of $1,500 for a non-owned trailer and $1,000 for certain electronic equipment

A

Part D limit of liability

43
Q

insurer has the option of keeping the stolen property (at agreed or appraised value) or returning it to the named insured. If the insured returns the stolen property, it must pay for any damage that resulted from the theft

A

Part D payment of loss

-if stolen property is recovered

44
Q

Part D No Benefit to Bailee

A

if a bailment relationship exists with respect to the covered vehicle, the policy will not make payment for the benefit of anyone who had care, custody, or control of the covered auto

45
Q
  • this policy only pays its proportionate share of the loss
  • this policy will pay on excess basis. primary coverage is considered insurance provided by the vehicle’s owner, any other property coverage that may be in place, and any other source of recovery, such as the insurance purchased by the driver of the vehicle
A

Part D other sources of recovery

46
Q

Comprehensive covers all of the following losses, except:

a. falling objects
b. theft
c. contact with a deer
d. rollover

A

d. rollover and hitting another vehicle or object are covered by collision coverage

47
Q

The insurer’s limit of liability for a vehicle damaged by a loss under Part D is which of the following?

a. actual cash value
b. replacement value
c. the lesser of actual cash value and replacement value
d. the greater of actual cash value and replacement value

A

c. the insurer’s limit of liability for loss is the lesser of the ACV or the vehicle and the amount necessary to repair or replace the vehicle with another of the like kind and quality

48
Q
  • cooperate with the investigation and settlement of any claim
  • promptly send to the insurer any copies of notices or legal papers received
A

Part E duties after an accident or loss

49
Q

Which of the following is not a duty of the insured if the insured’s vehicle is damaged when it hit a tree?

a. submit a proof of loss
b. call the police
c. promptly notify the insurance company
d. submit to a physical exam

A

b. calling the police is only a duty when seeking uninsured motorist coverage

50
Q

Part F- General Provisions

BANKRUPTCY

A

bankruptcy or insolvency of an insured does not relieve the insurer of its obligations under the policy. if the insured declares bankruptcy, the insurer must still comply with all obligations of the policy

51
Q

Part F- General Provisions

CHANGES

A

no changes may be made unless they are contained in a written endorsement issued by the insurance company.

52
Q

Part F- General Provisions

FRAUD

A

No coverage is provided for any insured who commits fraud

53
Q

Part F- General Provisions

Legal action against the insurer

A

no legal action may be taken against the insurance company by anyone unless he/she has complied fully with the policy

54
Q

Part F- General Provisions

Right to Recover Payment

A

if the insurance company makes a claim payment, the person on behalf of whom payment was made must assign its rights to recover damages from another party to the insurance company

55
Q

Part F- General Provisions

Policy period and territory

A

the policy only provides coverage for accidents and losses that occur during the policy period and within the policy territory

56
Q

Cancellation:

during the first 60 days of a new policy

A
  • insurer may cancel the policy for any reason by mailing notice to the named insured shown on the declarations
  • Notice of at least 10 days is required for canc due to non-payments of premium, and at least 20 days advance written notice for all other reasons
57
Q

Cancellation:

after the policy has been in effect for 60 days the insurer may cancel for only the following reasons:

A
  1. non payment of premium
  2. policy was obtained through fraud or material misrepresentation
  3. suspension or revocation of the driver’s license of the named insured, any driver who is a household resident of the named insured, any driver who regularly uses a Your Covered Auto
58
Q

Non-renewal

A

The insurer may elect to non-renew a policy; if non-renewing the policy, the insurer must give the insured written notice before the end of the policy period. At least 20 days advance written notice

59
Q

Automatic Termination

A

if insured or legal representative fails to accept or pay for a renewal

60
Q

Other termination provisions

A
  • proof of mailing of any notice constitutes sufficient proof of notice
  • if policy is cancelled, the insured may be entitled to a premium refund
  • effective date of cancellation stated in the notice will become the end of the policy period
61
Q

Transfer of Your Interest in This Policy

A

named insured may not transfer or assign his/her interest in the policy without the insurer’s written consent

62
Q

Two or More Auto Policies

A

if two or more policies issued by the same insurer apply to the same accident, the max limit of liability that will be paid will not exceed the policy with the highest limit

63
Q

If an insurer non-renews an insured’s policy for underwriting reason, what is the minimum number of days’ notice to the insured?

A

at least 20 days notice is required

64
Q

After an automobile policy has been in effect for 60 days, the insurer may cancel the policy for any of the following reasons, except:

a. non-payment of premium
b. material misrepresentation of information on the application by the insured
c. submission of four or more claims during a single policy period
d. suspension of the driver’s license of the named insured’s or household resident

A

c. claims history is generally a valid reason for non-renewing a policy, not cancelling the policy mid-policy term

65
Q

Extended non-owned coverage for a named individual

A
  1. provides coverage by removing or altering some of the Personal Auto Policy’s exclusions or limitations
  2. covers non-owned autos furnished or available for the insured’s regular use
  3. excess liability coverage
  4. an extra premium charge applies for liability and medical payments purchased by this endorsement
66
Q

Miscellaneous Type Vehicle Endorsement

A 
motor home
motorcycle
similar type vehicle
ATV
dune buggy
golf cart
67
Q

Named non-owner coverage for a named individual

A

liability, medical payments, and uninsured motorists coverage for individuals who do not own vehicles, but often borrow or rent autos

68
Q

Excess electronic equipment coverage

A

Coverage increases the policy limit from $1,000 to the amount shown on the endorsement.
Includes $200

69
Q

Limited Mexico Coverage

A

within 25 miles of border

10 or fewer days duration

70
Q

Optional limits transportation expenses coverage

A

$20 per day, $600 maximum

71
Q

Joint ownership coverage endorsement

A
  1. Refer to 2 or more individuals, other than husband and wife, who reside in the same household, or to non-resident relatives who jointly own the insured vehicle
  2. Non-resident relatives- 2 or more persons related by blood, marriage, or adoption who reside in separate households. This includes a ward or foster child
72
Q

What is the purpose of the Extended Non-Owned Coverage for a Named Individual endorsement?

a. coverage is extended 25 miles into Mexico
b. covers non-owned vehicles furnished for the insured’s regular use
c. covers an individual who does not own a car
d. extends coverage for a leased vehicle

A

b. this endorsement provides excess coverage over the primary coverage insuring the non-owned vehicle

73
Q

listed in the Dec, and includes the spouse if a resident of the same household

A

named insured

74
Q

person related to the named insured by blood, marriage, or adoption, including a ward or foster child who is a resident of the household

A

family member

75
Q

non-owned vehicle used in place of an insured vehicle that is out of normal use due to breakdown, repair, servicing, loss, or destruction

A

temporary substitute vehicle

76
Q

include BI or PD intentionally caused by an insured; property in the insured’s care, custody, and control; bodily injury to an insured’s employee while working for the insured; using a vehicle as a public or livery conveyance; working in the automobile business or using a vehicle while engaged in business; and a vehicle used by a person without the reasonable belief of entitlement to drive it

A

Part A Exclusions

77
Q

does not apply to vehicles with fewer than four wheels, vehicles that are owned but not insured, uninsured vehicles owned by family members; vehicles furnished for the regular use of the named insured or family members; and vehicles inside a racing facility used for competing in, practicing in, or preparing for a race

A

Part A Liability

Insurance (6 decks)

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