Ins Exam I - Auto Ins -Personal Auto Policy (PAP)

Question 1

Property

- Personal Auto Policy (PAP)

Answer 1

Covers loss to vehicle by:

• Collision
• Other than Collision

Question 2

Casualty

- Personal Auto Policy (PAP)

Answer 2

Covers protection from financial loss due to a negligent act of the insured arising out of the:

• Ownership
• Maintenance
• Use of an insured motor vehicle

Question 3

Supplemental Payments to Others

- Personal Auto Policy (PAP)

Answer 3

• Prorata
• Duties after a loss (4ps)
• Auto Ins Plans

Question 4

OWNED

- Covered Autos

Answer 4

insured's vehicle listed on policy dec 
incls the following provided no other insurance and the vehicle has a gross vehicle weight (GVW) of 10,000lbs or less. 
 - Private passenger auto 
 - Trucks 
 - Vans 
 - Newly acquired vehicles

Question 5

NONOWNED

- Covered Autos

Answer 5

driven by the insured but not owned by the insured

• rented vehicles
• temp substitute vehicles (ie: auto used while owned auto being repaired)

Question 6

TRAILERS

- Covered Autos

Answer 6

that are hitched to an insured vehicle - covered for liability

Question 7

Additional Vehicles *

- Newly Acquired Vehicles

Answer 7

Automatic cvrg provided: 14 days 4 days
Type of cvrg applied to vehicle:
- broadest cvrg shown for any vehicle listed on the policy dec
- $500 Ded
Notify Insurer to add vehicle to policy: w/in 14 days w/in 4 days

• Physical damge cvrg incl (collision/comp) on insured’s existing policy
• No physical damge cvrg incld

Question 8

Replacement Vehicles *

- Newly Acquired Vehicles

Answer 8

if new vehicle replaces an existing vehicle, the same coverage would apply to the new vehicle as were on the car it replaced.

Question 9

PERSONS INSURED

Answer 9

= Named insured (in the declarations) and resident spouse
- *Resident spouse automatically covered even if not specifically listed
- Non-resident spouse has coverage until the earlier of the 90 days, the effective date of another policy, or the end of the policy term
= Relative living household - family members (blood, marriage, adoption, or foster children

Question 10

PERSONAL AUTO POLICY (PAP) DEFINITIONS

Answer 10

• Bodily Injury - bodily harm, sickness, disease, death
• Property damage - physical damage, destruction, or loss of use of tangible property
• OCCUPY VEHICLE - in or on the auto; or getting on, out of, or off the auto

Question 11

SPLIT LIMITS

- Part A: Bodily Injury Liability

Answer 11

100/300/50

• three #s are used on your ins policy to describe the amount of liab cvrg you are carrying
  
  • $100k BI per person
  • $300k BI per accident
  • $50k PD (owned by others)
• for which any covrd person becomes LEGALLY RESPONSIBLE b/c of an auto accident, including any prejudgment interest awarded against the insured

Question 12

COMBINED SINGLE LIMIT (CSL)

- Part A: Bodily Injury Liability

Answer 12

Single limit amount that can be used as needed for either property damage or BI

• BI - per person and PD (OWNED BY OTHERS) (not cvred insureds)
• BI per accident
• for which any covrd person becomes LEGALLY RESPONSIBLE b/c of an auto accident, including any prejudgment interest awarded against the insured

Question 13

Part A: Property Damage Liability

Answer 13

pays damage to the property of others, including govrnmnt prop, caused by the insured, such as:

• damage to another vehicle
• damage to a building
• damage to a wall or fence.

Question 14

Supplementary Payments (Bailed)

Answer 14

Paid in addition to liability limits (continued)

• Interest - interests on judgements while in appeal
• LOSS OF EARNINGS - up to a certain limit per day for loss of insured’s earnings only be/c of attendance @ hearings or trials - $200

Question 15

Part B: Medical Payments Coverage*

Answer 15

Covers reasonable medical expenses for insured persons caused by an accident involving any motor vehicle designed for highway use; incls when occupying a vehicle or struck as a pedestrian
- TIME LIMITS VARIES BY STATE (TYPICALLY 1-3 YRS)

Question 16

PART C: UNINSURED AND UNDERINSURED MOTORISTS COVERAGE (UM/ UIM) 1

Answer 16

• UM: Covers insured when other drive is w/o ins
• UIM: Covers insured when other driver is w/o sufficient ins
• Covers BI sustained by insured
• Applies when other driver at-fault

(Covers BI caused by negligent driver who does not carry insured or not enough)

Question 17

PART C: UNINSURED AND UNDERINSURED MOTORISTS COVERAGE (UM/UIM) 2

Answer 17

• Uninsured vehicle covrg incls hit-and-run vehicles whose operator or owner cannot be IDd (ie: phantom driver hits or forces insured off the road)
• UM/UIM rejection form - insured must sign in applicable states when covrg is reduced below BI limits or is completely rejected

(UM/UIM motorist on test a lot)

Question 18

PART C: UNDERINSURED MOTORIST COVERAGE (UIM)

Answer 18

• UIM fills the gaps that may exist between what the negligent underinsured driver’s BI limits are and what the injured is legally entitled to recover
• the max $$$ paid is the difference between the 2 limits

Question 19

Part D: Physical Damage Coverage *

Answer 19

• Covrg provided for damage to your auto
• Summary of covrgs
  
  • Collision
  • Other than collision
  • Transportation expenses
  • Towing and labor

Question 20

PART D: COLLISION

Answer 20

• Covers the insured vehicle or a non-owned vehicle
  
  • Collision w/ another vehicle or object
  • Upset of the vehicle (overturned vehicle)
• Specified perils (collision and upset)
• Deductible is common (generally higher)

Question 21

PART D: OTHER THAN COLLISION (COMPREHENSIVE)

Answer 21

Covers any direct and accidental damage to the vehicle other than collision

• Covers the insured vehicle or a non-owned vehicle
• Open peril - everything covered unless excl
• Deductible is common (generally higher)

Question 22

PART D: OTHER than COLLISION COMMON PERILS

PQ

Answer 22

• Fire - Hail
• Theft - Flood
• Explosion - Vandalism
• Earthquake - Glass Breakage
• Wind - Falling Objects
• Contact w/ Birds/Animals

Question 23

Part D: Transportation Coverage *

Answer 23

Expenses paid to an insured in the event of a covrd loss for substitute transportation

• Covrg applies to both collision and other than collision losses
• NO DEDUCTIBLE
• Covers rental costs of a substitute vehicle
• for Theft losses, there is a 48hr waiting period
  
  • the theft must be reported to the police and the insurer
• for Other losses, there is a 24hr waiting period
• USUALLY LMTD TO $20 PER DAY, UP TO A MAX OF $600

Question 24

Part D: Limits of Liability Paid for Physical Damage*

Answer 24

in the event of a covrd loss, the insurer’s liab is lmtd to the lesser of

• the ACTUAL CASH VALUE (ACV) OF THE VEHICLE
• the AMOUNT NEC TO REPAIR OR REPLACE W/ PROP OF THE LIKE KIND and QUALITY

Question 25

Part D: Physical Damage Exclusion*

Answer 25

some of the most common exclusions incl

• Sound equipmnt unless permanently installed
• CBs, Computers, VCRs, TVs, etc
• Awnings and cabanas designed to create living facilities
• Customized equipment - War
• Wear & Tear - Road Damage to Tires
• Mechanical or electrical breakdown or failure
• Freezing

Question 26

Towing and Labor*

Answer 26

• Optional Coverage added by Endt

- Towing and roadside assistance

Question 27

Part E: Duties Following a Loss*

Answer 27

• Cooperate w/ insurer
• Notify police if hit-and-run
• Protect damaged property
• Prompt Notice of loss to insurer
• Permit insurer to inspect and APPRAISE damaged prop before it is repaired or replaced
• Notify policy promptly if vehicle is stolen

Question 28

Part F: General Provisions*

Answer 28

• Inception of cvrg - 12:01AM
• Territory = U.S., its territories and possessions, Puerto Rico, Canada - No coverage in Mexico (PQ)
• Assignment - may not be assigned w/o insurer’s written consent
• Termination - insurer must give notice (20 Days), NR (45 Days)

Question 29

Auto Repair Claims Settlement

- Claims Loss Settlement

Answer 29

Auto claims settled @ ACV, and insurer will

• Total the vehicle when repair costs exceed vehicle value
• Repair when repair cost is less than vehicle value
• Replace when insurer can find another vehicle of like kind and quality

Question 30

APPRAISAL

- Claims Loss Settlement

Answer 30

Settlement option regarding value of loss disputes

• insurer and insured each select an appraiser
  
  • ea party pays costs of its own appraiser
• 2 appraisers than select an umpire
  
  • costs of umpire split between 2 parties
• Amount agreed upon by 2 out of the 3 is amount paid of the loss

Question 31

ARBITRATION

- Claims Loss Settlement

Answer 31

• Arbitration - worded similarly to the appraisal condition, but is not lmtd to disputes over the value of the loss
• Can be applicable when insurer and insured do NOT AGREE
  
  • whether insured is legally entitled to recover damages
  • or as to the amount of damages recoverable
• Typically listed in the part of the policy where uninsured motorist covrg is addressed

Question 32

EXTENDED NON-OWNED COVERAGE FOR NAMED INDIVIDUAL

- Selected PAP Endts

Answer 32

• used to extend the drive other car coverage of the PAP is incl cvrg for all the excl types of non-owned autos expect those used in the garage business
• covrg applies to indiv named in the endt
• A/P required

Question 33

• JOINT OWNERSHIP COVERAGE
• Towing and Labor Coverage
  
  • Selected PAP Endts

Answer 33

provides covrg for the interests of ea owner of a cvrd auto

• Pays for towing costs and labor performed @ the scene or place of disablement (labor must be preformed @ the place of disablmnt)
• Cost of replacement materials not covered
• A/P required

Question 34

• MISCELLANEOUS TYPE VEHICLES
• Amendment of Policy Provisions
  
  • Selected PAP Endts

Answer 34

• Provides covrg for VEHICLES NOT OF THE STANDARD FOUR-WHEELED TYPE, such as motorhomes, motorcycles, scooters, all terrain vehicles, etc.
• Provides BI, uninsured motorist, PD, and medical pymnts
• Amends the PAP to meet various state requrmnts

Question 35

AUTOMOBILE INSURANCE PLANS (AIP)

Answer 35

Also known as ASSIGNED RISK PLANS; operated by the state

• Used when driver is refused in standard mrkt
• Pool incls all admitted insurers in state
• Notice of eligibility must be provided to insured if terminated by insurer

PQ: program designates Ins Co

Question 35

In MA every motor vehicle liability ins policy must provide PI benefits for medical expenses in an amount not to exceed what amount?

Answer 35

$8,000