Study 7 – Optional Coverages

Question 1

The insured’s automobile is broken into and some articles are taken. Which of the following would be included under the Specified Perils coverage?

a. musical instruments that were in the trunk
b. property of the insured’s passengers
c. the bumper jack belonging to the insured automobile
d. the insured’s raincoat

Answer 1

c. the bumper jack belonging to the insured automobile

Question 2

Loss of use due to theft will apply

a. if the entire vehicle was stolen
b. four days after the loss is reported to police
c. whereas coverage is confined to reimbursement for a rental car only
d. for reasonable expenses reimbursed up to the actual cash value of the vehicle

Answer 2

a. if the entire vehicle was stolen

Question 3

Which of the following would be included under the Specified Perils coverage?

a. a passing truck throws up a rock which shatters the insured automobile’s windshield
b. the insured automobile is being transported by rail from Toronto to Vancouver - the train is derailed and the automobile is demolished
c. the undercarriage of the insured automobile hits the ground on a rough and rutted country road and the muffler is torn off
d. vandals slash the tires and scratch the paint on the insured automobile

Answer 3

b. the insured automobile is being transported by rail from Toronto to Vancouver - the train is derailed and the automobile is demolished

Question 4

The insurer’s maximum liability for loss/damage to an auto, is the least of

a. actual cash value or cost to repair, rebuild or replace with like kind and quality
b. actual cash value or replacement cost
c. “valued” basis or replacement cost
d. “valued” basis or cost to repair, rebuild or replace with like kind and quality

Answer 4

a. actual cash value or cost to repair, rebuild or replace with like kind and quality

Question 5

Which of the following losses could be covered under the Own Damage coverage of the policy?

a. damage caused by radioactive contamination
b. damage caused when water freezes in the radiator
c. tapes stolen from the front seat of the automobile
d. vandalism damage to the roof of the automobile

Answer 5

d. vandalism damage to the roof of the automobile

Question 6

Earthquake is covered under

a. all perils, comprehensive and specified perils
b. all perils only
c. comprehensive but not specified perils
d. comprehensive only

Answer 6

a. all perils, comprehensive and specified perils

Question 7

The policy sections available for loss or damage to an insured automobile are

a. all perils, collision or upset, comprehensive, specified perils
b. all perils, collision of upset, specified perils
c. all perils, collision, theft, upset
d. comprehensive, collision, fire, theft

Answer 7

a. All perils, collision or upset, comprehensive, specified perils

Question 8

Additional coverages, purchased in government insurance provinces, are called

a. additional policies
b. additional coverages
c. extension coverages
d. extension policies

Answer 8

d. extension policies

Question 9

Which of the loss or damage is not covered, if the insured only purchased the Collision or upset and comprehensive coverages for his own vehicle

a. a fiat tire resulting from a collision with another vehicle
b. an explosion within the engine resulting from a fire
c. theft of the entire vehicle by the insured’s son who is living with the insured
d. all of the above

Answer 9

c. theft of the entire vehicle by the insured’s son who is living with the insured

Question 10

A horse and buggy are hit by an automobile. The horse is killed. The automobile has been damaged but not the buggy. Which of the following coverages would apply?

a. own damage
b. third party liability (property damage)
c. both of the above
d. neither of the above

Answer 10

c. both of the above