Personal auto policy

Question 1

Eligibility

Answer 1

The Personal Auto policy was designed to provide insurance for vehicles owned by one or more individuals and intended for personal use. Eligible vehicles include private passenger autos, which are four-wheeled vehicles like cars and SUVs. Passenger vans and pickups are also eligible if they meet certain gross vehicle weight requirements, usually 10,000 pounds or less. These vehicles must be owned by the named insured, but vehicles leased to the named insured are also eligible if the vehicle has been leased for a continuous period of at least 6 months.

Like other personal lines policies, incidental business use is allowed, such as making sales calls while in the vehicle. Approved incidental business use also includes delivering or transporting goods and materials for farming or ranching, and delivering or transporting goods and materials that are incidental to a business that involves installing or repairing furnishings or equipment. Making other business deliveries, carrying passengers for a fee, or any other business use would make the vehicle ineligible for Personal Auto coverage, and commercial auto insurance would be needed.

When underwriting and rating Personal Auto policies, the most important factor is who will be insured. This is primarily because the driving record of any drivers, among other factors, will determine insurability and rating categorization. Drivers with clean driving records within a certain time period are given better rates than those with less driving experience or a history of driving infractions. If an applicant is too high-risk to insure in the voluntary market, coverage may be provided by a state fund in the residual market.

Question 2

Eligible private passenger autos include leased vehicles as long as the lease contract is continuous for at least how many months?

Answer 2

6 months

Question 3

Part A

Answer 3

Liability coverage

Question 4

Part B

Answer 4

Medical payments

Question 5

Part C

Answer 5

Uninsured Motorists (UM) Coverage

Question 6

Part D

Answer 6

Coverage for Damage to Your Auto

Question 7

Part E

Answer 7

Duties After an Accident or Loss

Question 8

Part F –

Answer 8

General Provisions

Question 9

You and Your

Answer 9

The end of 90 days following the spouse’s change of residency

Question 10

Bodily Injury

Answer 10

Bodily injury refers to bodily harm, sickness, or disease, including any resulting death.

Question 11

Property Damage

Answer 11

Property damage is any physical injury to, destruction of, or loss of use of tangible property.

Question 12

Your Covered Auto

Answer 12

Any vehicle shown in the Declarations
Any trailer owned by the named insured or resident spouse
A newly acquired auto
Any non-owned auto or trailer being used as a temporary substitute for a covered auto while the covered auto is unavailable for use due to breakdown, repair, servicing, loss, or destruction

Question 13

Trailer

Answer 13

A trailer is a vehicle designed to be pulled by a private passenger auto, pickup, or van. It also means a farm wagon or farm implement while it is being towed by a private passenger auto, pickup, or van.

Question 14

When Your Covered Auto is being repaired due to a covered loss, which vehicle will be considered a covered vehicle?

Answer 14

Temporary substitute

Question 15

Newly Acquired Auto

Answer 15

A private passenger auto
A pickup or van with a gross vehicle weight of 10,000 pounds or less that is not used for the delivery or transportation of goods and materials, except for delivery or transportation related to farming or ranching or that which is incidental to the insured’s business of installing or repairing furnishings or equipment

Question 16

Liability Coverage

Answer 16

When an insured obtains a newly acquired auto, that auto receives the broadest coverage that is provided to an auto already on the policy for liability coverage (Part A), medical payments (Part B), and uninsured motorists coverage (Part C). If the newly acquired auto is replacing a vehicle shown in the Declarations, this coverage begins automatically from the date of ownership without having to notify the insurer. If the auto is being added to the policy, this coverage will begin on the date the insured becomes the owner of the vehicle if the insurer is notified of the newly acquired auto within 14 days of ownership. If the auto is reported after that 14-day period, coverage will begin as of the time of the request for coverage

Question 17

Physical Damage Coverage

Answer 17

Within 14 days after the insured becomes the owner, if the requested Part D coverage already applies to at least one auto already on the policy
Within 4 days after the insured becomes the owner, if the requested Part D coverage does not apply to any auto already on the policy. In the event that a loss occurs before notice is provided, a $500 deductible will apply.

Question 18

An insured obtains a newly acquired auto that is replacing a vehicle, which is covered by a Personal Auto policy with collision coverage under Part D. If the insured wants to apply collision coverage to the new auto starting from the date of ownership, within how many days must the insured report the purchase of the new vehicle to the insurer?

Answer 18

14

Question 19

Part A – Liability Coverage

Answer 19

Under a PAP’s third-party liability coverage, the insurer agrees to pay damages for bodily injury or property damage for which any insured becomes legally responsible. Damages include prejudgment interest. The insurer also agrees to settle or defend any claim or suit asking for those damages, and will pay all defense costs it incurs, without being limited by policy limits

Question 20

Part A Insureds

Answer 20

The named insured or any family member who owns, maintains, or uses any auto or trailer, including unlicensed family members
Any person who uses Your Covered Auto with permission
For Your Covered Auto, a person or organization legally responsible for anyone covered under Part A, when the responsibility is for relevant acts or omissions by an insured
For an auto or trailer other than Your Covered Auto, any person or organization legally responsible for acts or omissions of the insured or any family member that are relevant to Part A, but only if the person or organization does not own or hire the auto or trailer

Question 21

Supplementary Payments

Answer 21

Up to $250 for the cost of bail bonds required because of a covered accident, including related traffic law violations
Premiums on appeal bonds
Interest accrued after a judgment is rendered in any suit defended by the insurer
Up to $200 a day for the insured’s loss of earnings due to attendance of trials or hearings
Other reasonable expenses incurred at the insurer’s request

Question 22

All of the following are supplementary payments under Part A - Liability Coverage, except:

Answer 22

Payment for all defense costs after the Part A limit is exhausted

Question 23

Part A Exclusions

Answer 23

Many of the exclusions seen throughout all parts of a Personal Auto policy work to ensure that coverage is limited to its intended purpose—that is, coverage for the personal use of eligible vehicles.

Liability coverage is not provided for:

Any insured who intentionally causes bodily injury or property damage
Damage to property owned or being transported by an insured
Damage to property rented to, used by, or in the care of an insured, except for damage to a residence or private garage
Bodily injury to an insured’s employee during the course of employment by that insured. However, domestic employees will be covered if Workers’ Compensation is not required or available.
Liability arising out of the ownership or operation of a vehicle while it is being used as public or livery conveyance
Public conveyances provide services that are open to the general public, and livery conveyances transport people and/or property for a fee. Examples include taxi services and driving for a ride-sharing app.
This exclusion does not apply to a share-the-expense car pool, where reasonable operational costs, such as gas, are split between the vehicle’s occupants
Insureds who are employed or engaged in the business of selling, repairing, servicing, storing, road testing, or parking motor vehicles designed for use primarily on highways
An exception exists if the vehicle is being used by the named insured, their spouse, a family member, or a partner or employee of these

Question 24

A Personal Auto policy will provide liability coverage for which of the following vehicles?

Answer 24

A non-owned golf cart

Question 25

Which of the following vehicles is not considered an uninsured motor vehicle under Part C of a Personal Auto policy?

Question 26

Which of the following vehicles is not considered an uninsured motor vehicle under Part C of a Personal Auto policy?

Answer 26

Which of the following vehicles is not considered an uninsured motor vehicle under Part C of a Personal Auto policy?

Question 27

Insureds under Part C - Uninsured Motorists Coverage of a Personal Auto policy include:

Question 28

The limit of liability of Part D - Coverage for Damage to Your Auto under a Personal Auto policy states that the limit is:

Answer 28

The lesser of the actual cash value of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality

Question 29

Under a Personal Auto policy, how long does an injured party have following an accident to incur necessary medical expenses?

Answer 29

3 years

Question 30

After a Personal Auto policy is in effect for 60 days, which of the following is not a valid reason to cancel the policy?

Answer 30

Claims history

Question 31

Coverage for recreational vehicles and motor homes can be added to a Personal Auto policy by the:

Answer 31

Miscellaneous Type Vehicle Endorsement

Question 32

After a 4-car accident caused by the insured, Claimant A has bodily injuries in the amount of $49,500, Claimant B has bodily injuries equaling $19,500, and Claimant C has bodily injuries equaling $14,000. If the insured’s Personal Auto policy limits are 25/50/10, what will the insurer pay?

Answer 32

Regardless of the individual claim amounts, because the total of the individual claims ($83,000) exceeds the per accident limit of $50,000, the insurer’s liability is limited to $50,000 for all three claimants.

Question 33

Under Part F of the Personal Auto policy, the Legal Action Against Us provision states that:

Answer 33

Legal action may not be brought against the insurer until the insured has complied with all the terms of the policy

Question 34

Bodily injury sustained by an insured would be covered under Part B - Medical Payments Coverage of an unendorsed Personal Auto policy if the insured is occupying which vehicle?

Answer 34

A vehicle used for car pools

Question 35

Insureds under Part C - Uninsured Motorists Coverage of a Personal Auto policy include:

Answer 35

A family member, occupying an insured auto struck by an uninsured vehicle

Question 36

An insured has a Personal Auto policy. While their covered auto is being serviced, they use a non-owned auto as a temporary substitute. Which of the following is true if the insured is liable for bodily injury after an accident while using the temporary substitute?

Answer 36

Coverage is provided on an excess basis

Question 37

A Personal Auto policy’s liability coverage would protect the insured in the event that:

Answer 37

The named insured’s resident family member injures someone in an accident while using a covered auto without the insured’s permission

Question 38

A pickup truck may be eligible for coverage under a Personal Auto policy even if it is used for any of the following incidental business purposes, except:

Answer 38

Transporting people for a fee

Question 39

Which of the following losses could be covered under Part D of a Personal Auto policy?

Answer 39

Flood damage to a convertible when the top is left down

Question 40

A Personal Auto policy would consider all of the following to be examples of occupying a vehicle, except:

Question 41

Policyholder J hit a deer with their Honda. J has collision coverage with a $250 deductible and Other Than Collision coverage with a $50 deductible. The damage to J’s car was $450. How much will the policy pay?

Answer 41

Collision with a bird or animal is covered by Other Than Collision coverage. The $50 deductible would apply to the loss, so the insurer would pay $400.

Question 42

Under the PAP, a temporary substitute would be covered if used:

Question 43

X is the named insured on a Personal Auto policy. After an uninsured motorist causes an accident, all of the following people could collect payments under Part C of X’s Personal Auto policy, except:

Answer 43

The operator of the uninsured motor vehicle
Part C - Uninsured Motorists Coverage provides coverage for insureds who suffer bodily injuries as a result of an accident caused by an uninsured motorist. Part C does not provide payments to the uninsured motorist. Insureds include the named insured and any family member. Passengers occupying the named insured’s covered auto are also insureds. The owner or operator of the uninsured motor vehicle must be found to be legally responsible for bodily injury for coverage to apply.

Question 44

The limit of liability of Part D - Coverage for Damage to Your Auto under a Personal Auto policy states that the limit is:

Answer 44

The lesser of the actual cash value of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality.Generally, the maximum limit of liability is equal to the actual cash value of the vehicle or vehicles insured. If the damage can be repaired, then the limit of liability is equal to the amount necessary to repair the vehicle or vehicles.

Question 45

Liability coverage for which of the following vehicles is only provided by endorsement under a Personal Auto policy?

Answer 45

All-terrain vehicles

Question 46

The named insured’s spouse will not be considered an insured on the named insured’s Personal Auto policy if:

Answer 46

It has been 90 days since the spouse moved to a different residence away from the named insured

Question 47

A Personal Auto policy would consider all of the following to be examples of occupying a vehicle, except:

Question 48

The Extended Non-Owned Coverage Endorsement available to Personal Auto policies should be added by an insured who is:

Answer 48

Being furnished a company car