Personal Auto

Question 1

How many parts are Personal Auto Policies broken up into?

Answer 1

6:
Part A-Liability Coverages
Part B-Medical Payments
Part C-Uninsured Motorist
Part D- Coverage for damage to your auto
Part E- duties after an accident or loss
Part F-General Provisions

Question 2

What are considered eligible vehicles for a PAP?

Answer 2

private passenger vehicles including cars, SUVs, passenger vans, and pickups with a gross vehicle weight of 10,000 pounds or less.

Question 3

True or false: incidental business use is allowed—e.g., making sales calls.

Answer 3

True: Delivery or commercial use of an eligible vehicle renders it ineligible for the personal auto policy and requires it to be insured on a business auto policy.

Question 4

a private passenger vehicle will be deemed to be owned by a person if it’s leased under a written agreement for a continuous period of at least ________

Answer 4

6 months.

Question 5

The named insured listed in the declarations, and the spouse if a resident of the same household.

Answer 5

You and Your

Question 6

Shall be deemed to be owned by a person if the auto is owned or leased under contract for a continuous period of at least 6 months

Answer 6

Private Passenger Auto

Question 7

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

Answer 7

Bodily Injury

Question 8

Includes trade, profession, or occupation. have two components: they are continuous in nature and offer the opportunity for profit.

Answer 8

Business

Question 9

A person related to the named insured by blood, marriage, or adoption who is a resident of the named insured’s household

Answer 9

Family Member

Question 10

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

Answer 10

Occupying

Question 11

Physical injury to, destruction of, or loss of use of tangible property.

Answer 11

Property Damage

Question 12

A vehicle designed to be pulled by a private passenger auto or a pickup or van. ______ also includes a farm wagon or farm implement while it’s being towed by a private passenger auto pickup, or van.

Answer 12

Trailer

Question 13

If a vehicle meets any of the following four definitions, it is a “your covered auto.”

Answer 13

Any vehicle shown in the Declarations

A newly acquired auto

Any trailer that the insured owns

Any auto or “trailer” the named insured doesn’t own while being used as a temporary substitute for any other vehicle described in this definition, which is out of the normal use because of:

Breakdown
Repair
Servicing
Loss
Destruction

Question 14

A temporary substitute( IS OR IS NOT) a “your covered auto” under Part D – Coverage for Damage to your Auto.

Answer 14

IS NOT

Question 15

Any of the following types of vehicles for which the insured becomes the owner during the policy period:

A private passenger auto

A pickup or van, for which no other insurance policy provides coverage, if the auto:

• Has a gross vehicle weight of 10,000 pounds or less.
• Is not used for delivery or transportation of goods and materials, unless such use is incidental to the insured’s business of installing, maintaining, or repairing furnishings or equipment, For example, if the insured is a plumber; he may use his pickup or van for the transportation of his tools.

Answer 15

Newly Acquired Auto

Question 16

If newly acquired auto is an additional vehicle, the insured must report to the insurer within _______

Answer 16

14 days.

Question 17

The insured must report the newly acquired auto to the insurer for coverage to continue. If the insured doesn’t report as required, coverage ends after either______

Answer 17

4 or 14 days.

Question 18

If a vehicle covered by Part D coverages is replaced by a new car with the same coverage, the policy will automatically extend coverage for _______

Answer 18

14 days.

Question 19

Pay damages for bodily injury or property damage for which any insured becomes legally responsible.

Settle or defend any claim or suit asking for such damages.

Pay all defense costs it incurs, in addition to the liability limits. The insurer’s duty to settle or defend ends when the limit of liability is exhausted.

Answer 19

Liability Coverage Insuring Agreement

Question 20

The policy defines insured in Part A as

Answer 20

The named insured or any family member for the ownership, maintenance, or use of any auto.

Any person using the covered auto with permission.

A person or organization, for “your covered auto,” if legally responsible for an insured.

Question 21

supplementary Payments:

If a bail bond is required because of an accident, the policy will pay up to______for the cost of the bail bond so long as ________

Answer 21

$250; the accident resulted in a covered bodily injury or property damage claim.

Question 22

Supplementary Payments: If defending a suit, the insurer will pay premiums on…..

Answer 22

appeal bonds and bonds to release attachments.

Question 23

SUPPLEMENTARY PAYMENTS Any _______ will also be paid by the insurer if it defends a suit.

Answer 23

interest that accumulates after a judgment has been entered

Question 24

Supplementary Payments

The policy pays up to ______ a day for loss of earnings because the insurer requests attendance at hearings or trials. This does not include loss of other earnings.

Answer 24

$200

Question 25

Supplementary Payments

The policy will also pay for reasonable expenses incurred at the insurer’s request. This does NOT include—–

Answer 25

traffic fines

Question 26

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

A
Payment for all defense costs

B
Premiums on appeal bonds

C
$200 a day for loss of earnings due to an insurer request to assist in the trial

D
$250 for the cost of a bail bond

Answer 26

A.
Payment for all defense costs

Payment for all defense costs is part of the Part A – Liability Coverage Insuring Agreement, which also includes payment for bodily injury or property damage for which the insured is legally responsible.

Question 27

Part A Exclusions

Liability coverage is not provided for any insured who:

Answer 27

Intentionally causes bodily injury or property damage.

Causes property damage to property he or she owns or is transporting.

Causes property damage to property rented to, used by, or in the care of that insured. An exception exists for damage to a residence or private garage—this is the care, custody, or control exclusion.

Is responsible for causing bodily injury to an employee (of that insured) during the course of employment by that insured.

Owns or is operating a vehicle while it’s being used as public or livery conveyance (meaning it has been hired out to the general public). A vehicle used in a share-the-expense car pool is not considered a public or livery conveyance.

Is employed or engaged in the business of selling, repairing, servicing, storing, road testing or parking motor vehicles. An exception exists if the vehicle is being used by an insured, a family member, or a partner or employee of these. For example, Mary’s son is a mechanic. If he’s test-driving Mary’s car and crashes it, the exception to the exclusion applies—meaning he has coverage. However, if his co-worker crashes Mary’s car, the exception doesn’t apply because the co-worker is not related to Mary, nor is he her partner or employee.

Is using a vehicle while employed or engaging in business. However, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles.

Is using a vehicle without the reasonable belief that he or she is entitled to drive it. Family members always have a reasonable belief of entitlement to drive a “your covered auto” under this coverage.

Question 28

Part A Exclusions (continued)

Liability coverage is not provided for the ownership, maintenance, or use of:

Answer 28

Vehicles that have fewer than four wheels, such as motorcycles

Vehicles designed mainly for use off public roads, such as snowmobiles or ATVs. An exception applies for off-road vehicles used by an insured in a medical emergency, “trailers,” or non-owned golf carts.

Vehicles owned by the insured that are not insured on this policy OR 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 owned by a family member that aren’t insured by this policy OR not owned, but are furnished to a family member or available for the family member’s regular use, such as a company car

Vehicles located inside a racing facility for the purpose of competing, practicing, or preparing for a race or speed contest

Question 29

Liability coverage excluded when property damage to property in care, custody, or control of insured is known as:

Answer 29

Care, custody, and control Exclusion

Question 30

The limit shown in the Declarations is the most the insurer will pay in any one accident, regardless of the number of:

Answer 30

Insureds
Claims made
Vehicles or premiums shown in the Declarations
Vehicles involved in the accident

Question 31

If the loss is covered under more than one part of the policy, payment (will or will not?) be duplicated?

Answer 31

WILL NOT

Question 32

Personal auto policies may have liability limits written as:

Answer 32

Split Limits or Combined Single Limit.

Question 33

When the amounts of coverage for bodily injury and property damage are separate

Answer 33

Split Limits

Question 34

Breakdown: If Part A of a policy is written with limits of 100/300/50, the policy will provide coverage…

Answer 34

$100,000 per person for BI
(a bodily injury (BI) limit per person)

a maximum BI aggregate limit of $300,000 per accident
(bodily injury limit per accident)

the policy will provide a $50,000 limit for PD per accident
(Property Damage per accident)

Question 35

An insured causes a car accident that leaves the driver of the other car and 2 passengers suffering injuries of $30,000 each and $15,000 in damage to the other vehicle. The insured’s policy has limits of 25/50/10. Based on the limits of liability, the policy will pay….

Answer 35

the policy will pay $25,000 BI per person (maximum $50,000 per accident) and will only pay $10,000 in PD.

Question 36

The limit of the policy may be applied to bodily injury (BI) and/or property damage (PD). A _______ policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD).

Answer 36

combined single limit

Question 37

The limit of liability is the most paid by the insurer regardless of all of the following, except:

A
Amount of surcharges to be applied to policy

B
Number of vehicles involved

C
Number of insureds

D
Premiums shown

Answer 37

A
Amount of surcharges to be applied to policy

The amount of surcharge to be applied to the policy is not linked to the limit of liability.

Question 38

if the insured’s policy doesn’t provide Personal Injury Protection (PIP) coverage and the state in which the vehicle is being driven requires it, the insured’s personal auto policy will….

Answer 38

provide PIP coverage at required limits while the insured is in that state.

Question 39

When the policy is certified as future proof of financial responsibility, the policy shall comply with the law to the extent required.

Answer 39

Financial Responsibility

Question 40

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.

Answer 40

Other Insurance

Question 41

excess basis for non-owned vehicles: For example, the covered loss involves a car the insured borrowed from his neighbor.

Answer 41

The insurance in place on the neighbor’s car must pay first (it’s primary insurance) and then this policy will pay (it’s excess insurance).

Question 42

The insurer will pay reasonable expenses incurred for necessary medical and funeral services caused by an accident, sustained by an insured, and incurred within ______

Answer 42

Med Pay/3 years

Question 43

how is medical payment coverage different from liability coverage?

Answer 43

Medical Payments Coverage does NOT require an insured to be legally responsible for causing injuries

Question 44

Med Pay Exclusions when insured:

Answer 44

Is occupying a vehicle with fewer than 4 wheels

Is occupying a vehicle being used as a public or livery conveyance. A share-the-expense car pool is NOT public or livery conveyance.

Is occupying any vehicle that is located for use as a residence or premises—for example, living in one’s car or a permanently located motor home or trailer used as a residence

Sustains bodily injury in the course of employment and workers’ compensation benefits are either required or available.

Is occupying or struck by a vehicle owned by the insured that is not a “your covered auto” and is either owned by the insured OR furnished to the insured, or available for the insured’s regular use, such as a company car.

Is occupying or struck by a vehicle owned by a family member that is not a “your covered auto” and is either owned by a family member OR furnished to a family member, or available for the family member’s regular use, such as a company car.

Is using a vehicle without having a reasonable belief that he/she is entitled to drive the car.

Is using a vehicle while engaged in business; however, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles. This exclusion applies to the business use of trucks and other commercial vehicles.

Injuries sustained because of, or as a result of, any type of war or nuclear hazard or action

Injuries sustained when occupying a vehicle located inside a racing facility for the purpose of competing, practicing, or preparing for a race or speed contest.

Question 45

What does UM stand for?

Answer 45

Uninsured Motorists Coverage

Question 46

provides insurance to insured persons injured in accidents that are caused by another party. this section of the policy only applies to bodily injury damages.

Answer 46

Part C – Uninsured Motorists Coverage (UM)

Question 47

the definition of “insured” for UM means:

Answer 47

The named insured or any family member

Any person occupying a “your covered auto”

Any person who is entitled to recover damages because of bodily injury sustained by an insured and covered by the policy.

Question 48

definition for “uninsured motor vehicle.” An uninsured motor vehicle is one that:

Answer 48

Doesn’t have insurance or a bond in place at the time of the accident.

Has insurance in place at the time of the accident. However, the bodily injury liability limits are less than those required by the financial responsibility or compulsory insurance laws in place in the state where the insured’s “your covered auto” is principally garaged

Is a hit-and-run vehicle. The owner or operator of the vehicle can’t be identified AND must hit:
The named insured or a family member;
A vehicle occupied by the named insured or a family member; or
“Your covered auto.”

Has insurance, but the insurer either denies the claim or becomes insolvent.

Question 49

vehicles NOT included in the definition of “uninsured motor vehicle”:

Answer 49

A vehicle that’s owned by the named insured or a family member OR a vehicle that’s furnished or available for the regular use of the named insured or a family member, such as a company car.

A vehicle that is owned or operated by someone who is self-insured, unless the owner or operator is or becomes insolvent.

A vehicle owned by any government agency.

A vehicle that operates on rails or crawler treads, such as a train or piece of mobile equipment like a bulldozer.

A vehicle designed mainly for use off public roads, such as a snowmobile or ATV.

A vehicle permanently located for use as a residence, such as a motor home or trailer in a campground.

Question 50

Part C Exclusions

Answer 50

An insured or family member is injured when occupying, or struck by, a vehicle owned by the named insured or a family member and the vehicle is not insured by this policy.

An insured or a legal representative settles an Uninsured Motorists Bodily Injury Liability claim and that settlement impairs the insurance company’s ability to recover payments made to any insured.

An insured is 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. Family members always have a reasonable belief of entitlement to drive a “your covered auto” under this coverage.

While insured by workers’ compensation or disability insurance. No payment will be made under this coverage for injuries that might benefit any insurer, or self-insurer, under any workers’ compensation or disability benefits law. This means that if workers’ compensation or disability insurance is in place, that coverage must pay before this coverage applies.

If the insured is legally responsible for punitive or exemplary damages, this coverage does not apply.

Question 51

What is UIM?

Answer 51

Underinsured Motorists Coverage (UIM)

Question 52

protects the insured against drivers who do have auto liability insurance, but whose coverage limits are inadequate or insufficient to respond to claims. The coverage pays only up to the amount that exceeds the limit of liability of the at-fault party.

Answer 52

Underinsured Motorists Coverage (UIM)

Question 53

Under a PAP, liability resulting from the insured’s use of a non-owned auto is:

A
Provided on an excess basis

B
Shared pro rata between the insured’s policy and the policy on the vehicle

C
Provided on a primary basis

D
Not covered because of the Care, Custody and Control Clause

Answer 53

A
Provided on an excess basis

The owner’s coverage is primary and the driver’s coverage is excess.

Question 54

An insured has auto insurance with both Company A and Company B; how much will Company B have to pay for a covered loss of $3,000 if Company A’s Limit of Liability is $100,000 and Company B’s is $200,000?

A
$2,000

B
$1,000

C
$500

D
$3,000

Answer 54

A
$2,000

If other auto liability insurance applies, each policy will pay its proportionate share of the loss. Company B’s limit is 2/3 of the total coverage by both policies. 2/3 of the total loss of $3,000 = $2,000.

Question 55

Which of the following is true of supplementary payments under Part A of the Personal Auto Policy?

A
They are paid only once during the policy term

B
Any payments made reduce the liability limits by a like amount

C
They are paid in addition to the liability limits of the policy

D
They are paid as supplementary benefits only after the limit of liability is exhausted

Answer 55

C
They are paid in addition to the liability limits of the policy

The supplementary payments of the Personal Auto Policy provide payment in addition to the limit of liability for the incidental expenses commonly associated with liability claims.

Question 56

Which of the following vehicles is not considered an uninsured vehicle?

A
A vehicle owned by the government

B
A vehicle insured for less than the state’s minimum required coverage

C
A vehicle whose coverage is denied by its insurer

D
A vehicle that disappears after it hits and runs

Answer 56

A
A vehicle owned by the government

Government vehicles are not included in the definition of an uninsured vehicle.

Question 57

On the Personal Auto Policy, the Collision coverage provides payment for losses:

A
To your car, but only if you are legally liable

B
To the car you run into, regardless of liability

C
To your car, and regardless of liability

D
To your car and the car you run into

Answer 57

C
To your car, and regardless of liability

Collision coverage only applies to a vehicle of the insured and is applied regardless of fault. (Damage to another vehicle would fall under Liability coverage.)

Question 58

Under a Personal Auto Policy, which of the following is true of liability for bodily injury resulting from the insured’s use of a non-owned auto?

A
It is not covered because of the care, custody and control clause

B
Coverage is shared pro rata between the insured’s policy and the policy on the vehicle

C
Coverage is provided under Part C

D
Coverage is provided on an excess basis

Answer 58

D
Coverage is provided on an excess basis

The owner’s coverage is primary and the driver’s coverage is excess.

Question 59

All of the following are false about Damage to Your Auto, except:

A
In the event of total loss, adjustment will be made for the physical condition of the vehicle

B
The Limit of Liability is the greater of the vehicles actual cash value or the cost to repair

C
Coverage includes the cost to repair previous damage if required to fix new damage

D
The sales tax on a replacement vehicle is not covered

Answer 59

A
In the event of total loss, adjustment will be made for the physical condition of the vehicle

The physical condition of the vehicle is considered in the event of a total loss.

Question 60

To whom must the insured assign recovery rights after being paid by the insurance company for a collision loss caused by another party?

Answer 60

The insured must assign the rights to the insurance company to recover from the negligent party or insurer.

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.

Question 61

Which of the following is FALSE about a claim payment for a Part D under Personal Auto?

A
The insurance company can keep or return a stolen car

B
The claim payment will include any applicable sales tax

C
The insurance company can decide whether to pay cash or repair the vehicle

D
If the insurer returns a stolen car to the insured, it doesn’t have to pay claims for vehicle damage

Answer 61

D
If the insurer returns a stolen car to the insured, it doesn’t have to pay claims for vehicle damage

If the insurance company returns a stolen car to the insured, it must pay for any damage that occurred as a result of the theft.

Question 62

Policyholder J’s PAP includes Other Than Collision coverage, but no Collision coverage, with a $200 deductible. After her parked car rolls downhill and hits a tree incurring $500 in damage to the car, $150 of which is from glass breakage, how much will her insurance company pay?

A
$150

B
Zero

C
$500

D
$350

Answer 62

B
Zero

Without collision coverage, the accident is not covered under the policy. Glass breakage can be covered by Collision or Other Than Collision at the insured’s option, but in this case, the loss is less than the deductible, and would not be claimed.

Question 63

S carries a Personal Auto Policy with Liability limits of 50/100/25. What is the maximum the policy will pay if S struck another vehicle causing injury to the occupants as follows: Driver - $70,000; Passenger 1-$30,000; Passenger 2-$50,000 and property damage to the other vehicle - $20,000?

A
$150,000

B
$120,000

C
$125,000

D
$170,000

Answer 63

B
$120,000

Coverage is as follows: Driver - $50,000; Passenger 1 - $30,000; Passenger 2 - $20,000, since the policy will only pay $50,000 per person and a total of $100,000 per accident. The property damage is fully covered, totaling $120,000.

Question 64

Which statement is false regarding the Personal Auto Policy?

A
Theft is covered under property damage liability

B
The PAP provides medical payments for up to 3 years

C
Uninsured Motorist Coverage is provided by Part C

D
Collision coverage will cover damage to the insured vehicle regardless of liability

Answer 64

A
Theft is covered under property damage liability

Theft is covered under physical damage (Part D), not property damage liability (Part A).