Commercial Auto Insurance Quiz

Question 1

1.	Which of the following commercial auto coverage forms can be purchased by most businesses to provide very broad coverage for losses arising from owned and nonowned autos?
A.	Business auto
B.	Business auto physical damage
C.	Motor carrier
D.	Truckers

Answer 1

1. A. The business auto coverage form covers a business’s owned, nonowned, and hired autos against liability and physical damage losses. This form insures all drivers except for garages, truckers, and motor carriers.

Question 2

2.	Which of the following coverage extensions is NOT provided by business auto physical damage coverage?
A.	Transportation expenses
B.	Towing and labor costs
C.	Electrical breakdown
D.	Loss of use

Answer 2

2. C. Mechanical and electrical breakdown is one of the exclusions in the physical
   damage coverage portion of the business auto coverage form. The physical damage portion of the business auto coverage form contains three principal coverages: (1) comprehensive, (2) specified causes of loss (a more limited type of comprehensive coverage), and (3) collision. Coverage for towing and labor costs and transportation expenses is also available under physical damage coverage.

Question 3

3.	Which portion of the garage coverage form covers liability for damage to property of others in the insured’s care, custody, or control?
A.	Liability
B.	Garagekeepers
C.	Physical damage
D.	Garage physical damage

Answer 3

3. B. The liability section of the garage coverage form excludes liability for damage to customers’ autos in the insured’s custody. Coverage for this exposure is provided under the garagekeepers section of the garage form.

Question 4

4.	Which of the following perils is NOT included in the business auto coverage form’s specified causes of loss coverage?
A.	Collision
B.	Earthquake
C.	Flood
D.	Theft

Answer 4

4. A. Specified causes of loss coverage is a limited type of comprehensive coverage. It covers fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, vandalism or mischief, and the sinking, burning, collision, or derailment of a conveyance transporting the covered auto.

Question 5

5. Which commercial auto endorsement extends personal auto coverage to immediate family members of the named insured?
   A. Individual named insured
   B. Drive other car—broadened coverage for named individuals
   C. Motor carrier coverage form
   D. Additional insured—lessor endorsement

Answer 5

5. A. The individual named insured endorsement provides coverage similar to that provided under the personal auto policy to family members of the named insured while using any auto

Question 6

6. Who of the following would NOT be considered an insured under business auto liability coverage?
   A. The named insured
   B. Others while using a covered auto with permission
   C. The owner of a borrowed auto
   D. An employee of the insured

Answer 6

6. C. The owner of a hired or borrowed auto is not an insured for liability coverage.

Question 7

7.	Which of the following coverages is included in an unendorsed garage coverage form?
A.	Underinsured motorists
B.	Uninsured motorists
C.	Medical payments
D.	Physical damage

Answer 7

7. D. The garage coverage form includes liability, garagekeepers, and physical damage coverage. Medical payments, uninsured motorists, and underinsured motorists coverages are added by endorsement.

Question 8

8. Which of the following is NOT excluded under business auto liability coverage?
   A. Liability assumed under a contract that is
   considered an insured contract
   B. Damage to the insured’s own auto
   C. Injury to employees covered by workers’ compensation laws
   D. Liability for property in the insured’s custody

Answer 8

8. A. The exclusion for liability assumed under contract or agreement does not apply to contracts that meet the policy’s definition of an insured contract.

Question 9

9. Which of the following losses would be paid under the business auto coverage form’s comprehensive coverage?
   A. Gradual corrosion of the grillwork on a
   covered auto due to continuous exposure to salt air
   B. Overturn of a covered auto
   C. Collision damage to a covered auto
   D. Theft of a covered auto

Answer 9

9. D. Losses from wear and tear are excluded. The other two losses are considered collision losses

Question 10

10. Which of the following businesses would NOT be covered under a garage coverage form?
    A. Used car dealer
    B. Catering company
    C. Automobile dealer with an auto body repair shop
    D. Semi-truck dealership

Answer 10

10. B. The garage coverage form is designed to cover vehicle dealers, including dealers that have repair operations on the premises.