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Kaplan PC Certification Exam > Unit 8: Personal Auto Insurance > Flashcards

Unit 8: Personal Auto Insurance Flashcards

1
Q

Casualty Coverages

A
  • Liability
  • Medical payments
  • Uninsured/underinsured motorists
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2
Q

Property Coverages

A
  • Collision
  • Other than Collision (comprehensive)
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3
Q

You and your

A

Refer to the named insured shown in the declarations and the named insured’s spouse (must reside in same house)

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4
Q

Family member

A

Any person related to the named insured or spouse who is a resident of the named insured’s household. Includes those related by blood, marriage, or adoption and includes a ward or foster child

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5
Q

Bodily injury

A

Bodily harm, sickness, or disease, including resulting death

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6
Q

Occupying

A
  • in a vehicle
  • upon a vehicle
  • getting into, onto, out of, or off a vehicle
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7
Q

Property damage

A

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

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8
Q

Covered auto

A

Includes private passenger autos, which are four-wheeled motor vehicles and pickup trucks, and vans that are under a certain weight and are not used for business purposes. Vehicles must be owned or leased under a long-term contract of six months or more

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9
Q

Termination Provision

A
  • Insured may cancel at any time
  • Insurer must provide written notice of cancellation or nonrenewal
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10
Q

Policy Period and Policy Territory

A

Policy period: shown in the declarations; accidents and losses only applicable during this period

Policy Territory: US, its territories and possessions, Puerto Rico, and Canada

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11
Q

Assigned Risk Plans

A
  • High-risk insureds
  • Assigned to an insurance company
  • Usually only liability coverage
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12
Q

Insureds

A
  • Named insured and resident spouse
  • Resident family members
  • Any person who borrows a covered auto with the permission of any insured
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13
Q

Supplementary (Additional) Payments

A

BAILED

  • Bonds
  • Aid
  • Interest on judgments or appeals
  • Loss of earnings
  • Expenses
  • Defense attorney cost
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14
Q

Liability Exclusions

A
  • Intentional injury or damage
  • Injury to an insured
  • Damage to property owned or transported by an insured
  • Injury to an employee
  • Using the vehicle as a taxi (carpool is ok)
  • Using the vehicle without permission
  • Vehicles less than four wheels or not licensed for road use
  • Vehicles used for racing
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15
Q

Limits of Liability

A
  • Split limits (separate limits for bodily injury and property damage)
  • Combined single limit
  • Limits vary by state
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16
Q

Financial Responsibility Laws

A
  • State-required proof of ability to pay for damages
  • Usually mandated auto liability insurance
17
Q

Out-of-State Liability Coverage

A

Higher of

  • policy limits
  • other state’s required limits
18
Q

Other Insurance

A
  • Pro rata share
  • (policy limits / total limits) x loss
  • If driving a nonowned: the auto is primary coverage; insured’s policy is excess (if needed)
19
Q

Medical Payments (aka First-Party Benefits)

A
  • Covers medical and funeral expense
  • No fault (insured, family and guests while occupying any vehicle)
  • Occupying (in, on, or getting in, out, or off)
  • Also covers insured and family as a pedestrian
20
Q

Medical Payments Exclusions

A
  • Sustained while occupying a motor vehicle with fewer than four wheels
  • Sustained while using a covered auto as a public or livery conveyance
  • Losses covered under workers’ compensation
  • Sustained while the insured is occupying a vehicle without the reasonable belief that he is entitled to do so
  • Sustained while occupying a vehicle that is being used in the insured’s business
  • Sustained during prearranged racing or speed event
21
Q

Limits of Liability

A

Single limit of liability applies to each person injured

22
Q

Other Insurance

A

If medical bills are paid by the insureds liability policy, they will not be paid again

23
Q

Uninsured Motorists

A
  • Has no liability insurance at the time of the accident
  • Has liability limits lower than the state requirements
  • Is a hit-and-run driver
  • Insurance company insolvent
  • Insurance company denies coverage
  • Uninsured driver is at fault
  • Covers: insured, family, guest passenger
24
Q

Subrogation

A

Insurance company can sue the at-fault party

25
Q

Limits of Uninsured Motorists

A
  • Can be split or combined single limit
  • Usually can’t be greater than insured’s liability limits
26
Q

Other Insurance

A
  • Limited to the highest single policy limit for uninsured motorists coverage
  • Prevents stacking of limits
27
Q

Underinsured Motorists Coverage

A
  • Pays when the at-fault driver has liability insurance
  • Liability is less than the injured, family or guest passengers’ bodily injury
28
Q

Appraisal

A

A settlement option regarding value of loss disputes

  • Insured and insurer each select an appraiser
  • Each party pays cost of its own appraiser
  • Two appraisers then select an umpire
  • Cost of the umpire split between the two parties
  • Amount agreed upon by two out of the three is amount paid for the loss
29
Q

Newly Acquired Auto

A

Automatically has the same coverage as current covered autos for 14 days; must be specifically added within those 14 days

30
Q

Collision and Other Than Collision

A

For newly acquired auto

  • If coverage is already on the policy, report within 14 days
  • If no coverage, must request coverage within 4 days
  • If loss occurs within first four days and insured has complied with notification, $500 deductible will apply
31
Q

Physical Damage to Your Auto

A

Covers insured’s vehicle and nonowned vehicles

Collision: contact with another object; overturn

Other than Collision (Comprehensive)

  • Missiles or falling objects
  • Fire
  • Theft or larceny
  • Windstorm
  • Hail, water, or flood
  • Malicious mischief or vandalism
  • Riot or civil commotion
  • Contact with a bird or animal
  • Breakage of Glass

Doesn’t cover any personal property in the vehicle

32
Q

Transportation Expense

A
  • Covers temporary transportation expenses (rental car, bus, taxi, train)
  • $30/per day
  • 48-hour waiting period for theft losses
  • 24-hour waiting period all other type losses
33
Q

Damage to Your Auto Exclusions

A
  • Auto used as a public or livery conveyance
  • Wear and tear, freezing, mechanical or electrical breakdown, or road damage to tires
  • Electronic equipment that reproduces, receives, or transmits audio, visual, or data signals
  • Tapes, records, disks, and other media used with electronic equipment
  • Destruction or confiscation by government or civil authorities
  • Custom furnishings or equipment in a pickup or van
  • Radar or laser detection equipment
  • Nonowned autos being used by any person engaged in an auto business
  • Autos being used in a prearranged racing or speed event
34
Q

Other Provisions

A
  • The lesser of ACV, repair, or replace
  • Maximum of $1,500 for damage to a nonowned trailer
  • Maximum of $1,000 for electronic equipment permanently installed in an area not normally used by the manufacturer for this equipment
  • Collision and OTC (comprehensive) have deductibles
  • No benefit to bailee
  • Insured must allow company to inspect damage
  • Insured must notify police if vehicle is stolen
35
Q

Personal Auto Endorsements

Joint ownership coverage

A

Insureds are not married or are unrelated

36
Q

Personal Auto Endorsements

Towing and labor costs

A
  • Covered auto is disabled
  • Labor must be performed at the place of disablement
  • Repair work is not covered
37
Q

Personal Auto Endorsements

Miscellaneous type vehicles

A
  • Motorcycles
  • Scooters
  • Golf carts
  • Motor homes
38
Q

Personal Auto Endorsements

Extended nonowned coverage

A

Vehicles furnished or available for regular use

  • Covers insured and the family while driving nonowned autos on a regular basis
39
Q

Personal Auto Endorsements

Named nonowner coverage

A
  • Covers someone who does not own an automobile but may drive borrowed or rented autos
  • Only covers the person named in the endorsement

Kaplan PC Certification Exam (22 decks)

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