FI 341 Chapter 22: Auto Insurance

Question 1

Temporary Substitute Vehicle Coverage (Under Part D)

Answer 1

A non-owned auto or trailer used temporarily because of mechanical breakdown, repair, servicing, loss, or destruction of a covered vehicle

Question 2

Medical Payments Coverage

Answer 2

Covers all reasonable medical and funeral expenses incurred by an insured in an accident

Question 3

Uninsured Motorists Coverage

Answer 3

Pays for the bodily injury caused by an uninsured motorist, by a hit-and-run driver, or by a negligent driver whose insurance company is insolvent

Question 4

Underinsured Motorists Coverage

Answer 4

Can be added to the PAP to provide more complete protection

Question 5

Coverage for damage to your auto

Answer 5

Insurer pays for direct and accidental loss to a covered auto or any non-owned auto

Question 6

Collision Coverage

Answer 6

Collision is the upset of your covered auto or non-owned auto or its impact with another vehicle or object

Question 7

Other-than-collision Coverage

Answer 7

An other-than-collision loss is due to a variety of perils (See slide 22-17)

Question 8

Non-Owned Auto Coverage (Under Part D)

Answer 8

A private passenger vehicle not owned by or furnished or made available for regular use of the named insured or family member, while it is in the custody of or being operated by the named insured or family member

Question 9

Collision Damage Waiver (CDW)

Answer 9

Essentially what is offered by Part D (sometimes eve on a rental car, though most independent agents recommend purchase of the CDW)

Question 10

Total Loss Coverage

Answer 10

The policy pays the actual cash value less the deductible

Question 11

Partial Loss Coverage

Answer 11

The policy pays only the amount necessary to repair or replace the damaged property of like kind and quality. Diminution in value challenge in courts

Question 12

Diminution in Value

Answer 12

Insurers can add a clarifying endorsement to exclude coverage for a direct and/or accidental physical damage loss

Question 13

Gap Insurance

Answer 13

Covers the difference between the amount an insurer pays for a totaled car and the amount owed on a lease or loan

Question 14

Nonrenewal

Answer 14

If an insurer decides to discontinue coverage, the insured must be given notice at least 20 days before the end of the policy period

Question 15

Automatic Termination

Answer 15

A policy is automatically terminated if the insured decline’s the insurer’s offer to renew

Question 16

Miscellaneous-type Vehicle Endorsement

Answer 16

Can be added to the PAP to insure motorcycles, mopeds, motorscooters, golf carts, motor homes, dune buggies, etc. (But NOT snowmobiles)

Question 17

Personal Umbrella Policy

Answer 17

Provides protection against a catastrophic lawsuit or judgment

Question 18

Personal Injury

Answer 18

Examples: False Arrest, Slander

Question 19

Self-insured Retention

Answer 19

Deductible for losses covered by the umbrella policy but not by any underlying contract

Question 20

Retained Limit (Personal Umbrella Policy)

Answer 20

The total limits of the underlying insurance or any other insurance available to an insured OR The deductible stated in the declarations if the loss is covered by the umbrella policy but not by any underlying insurance or other insurance

Question 21

2005 Personal Auto Policy (PAP)

Answer 21

Widely used throughout the US