Personal Auto Insurance

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Objectives: Learn the eligibility requirements; Learn the definitions of an auto policy; Know the different parts of the policy and their exclusions. There are usually questions on the state exam on the definition of supplementary payments; Understand the exclusions that apply per coverage part; Become familiar with the other clauses and conditions of the policy.

The insured is hit in the rear while stopped at a traffic light. The insured's company pays for his repairs, then seeks reimbursement from the responsibile party. This is described as: A. Subrogation; B. Reimbursement; C. Arbitration; D. Appeal

A. Subrogation is used by the insurer to seek reimbursement from the third party that caused the accident.

Damage to a windshield by a bird would be covered under: A. Collision; B. Comprehensive; C. Liability; D. All of the above.

B. This is an example of an Other Than "Collision" loss.

The Personal Auto Policy provides coverage in all of the following locations EXCEPT: A. Hawaii; B. Mexico; C. Canada; D. Alaska

B. Mexico is not within the covered territory covered by the PAP.

Mr. Pfister carried 15/30/5 limits on an auto, when he negligently ran into a parked car containing three occupants resulting n the following claims: Tom - B.I. - $18,000, P.D. - $8,000; Dick - B.I. - $8,000; Harry - B.I. - $4,000. In addition to these settlement awards, there was $18,000 in legal fees. In response to this accident, Pfisters P.A.P will pay: A. $32,000; B. $38,000; C. $50,000; D. $68,000

C. This is an example of a split limit claim. Payment is as follows: Tom -- $15,000; PD--$5,000; Dick $8000; Harry $4000 which totals $32,000. The defense costs ($18000) are covered and paid by the insurer, which brings the total to $50,000.

After a loss, the insured must: A. Notify the company; B. Permit the companyto inspect a damaged auto before repairs are started; C. Submit to a physical exam if needed; D. All of the above.

D. All of the items are part loss conditions of a PAP.

All of the following are Physical Damage exclusions EXCEPT: A. Loss to vehicle used as a livery; B. Damage due to wear and tear; C. Loss to audio tapes; D. Loss to permanently installed car telephone

D. A permanently installed telephone is covered.

The insurer will pay transportation expenses under the P.A.P. beginning ______ after a theft of the insured's automobile. A. 24 hours; B. 48 hours; C. 72 hours; D. 96 hours

B. The coverage applies after 48 hrs. when theft occurs. The insured must notify the police in case of a theft loss.

Under the P.A.P., the insurer will pay for transportation expenses up to which of the following amounts? A. 410 per day; $300 maximum; B. $20 per day; $500 maximum; C. $15 per day; $300 maximum; D. $20 per day; $600 maximum

D. The policy pays $20. per day subject to a maximum of $600. as a result of a covered physical damage loss.

A car, traveling at high speed, skids at a turn and rolls over. The damage incurred would be covered under which of the following personal auto coverages? A. Collision; B. Comprehensive; C. Uninsured motorist; D. P.D. liability

A. Upset or overturn is an example of a collison loss.

A stolen car is covered under which of the following personal auto coverges? A. Collision; B. Comprehensive; C. Uninsured motorist; D. P.D. liability

B. A stolen car is covered under the Other Than "Collision" coverage.

As a result of an auto accident, the insured sustains bodily injury worth $50,000. The responsible party carries auto liability insurance in the amount of 15/30/5. The insured's $100,000 underinsurance coverage would pay: A. $15,000; B. $35,000; C. $50,000; D. $100,000

B. The purpose of "underinsured motorist" coverage is to pay the difference in the amount payable by the negligent party and the actual damages sustained by the insured.

The purpose of "underinsured motors" coverage is to: A. Provide coverage for a "hit and run" driver.; B. Pay for injuries sustained by insureds who have been injured when the at-fault driver carries auto limits less than the financial responsibility of the state in which the insured was injured.; C. Provide coverage for the insured when the at-fault driver carries less coverage than that needed to pay for the insured's injuries.; D. Provide coverage when the at-fault driver's insurance company denies the claim.

C. The purpose of "underinsured motorists" coverage is to pay the difference between the at-fault driver's coverage and the actual damages sustained by the insured, up to the limit of the underinsured motorists coverage limit.

An uninsured motor vehicle includes: A. An insured vehicle whose insurer denies coverage; B. An insured vehicle whose insurer become insolvent; C. A "hit and run" vehicle; D. All of the above.

D. All of the responses are corret as to UM coverage.

The P.A.P. Medical Payments cover: A. The insured as driver; B. A passenger; C. The insured as pedestrian; D. All of the above.

D. The medical payments coverage covers all of those listed.

Under the P.A.P Medical Payments, the time limit for incurring medical expenses is: A. 6 months; B. 1 year; C. 2 years; D. 3 years

D. Medical payments under the PAP are payable for up to three years from the date of the accident.

The P.A.P. liability coveage excludes all of the following EXCEPT: A. Intentional injury; B. Damage to insured property; C. Damage to property of others in the insured's care; D. Damage to property of others due to the insured's motor vehicle negligence.

D. Damage to property to others, other than property being transported by the insured, is covered under property damage liability.

All of the following are considered insureds under the P.A.P. EXCEPT: A. Any person using the insured auto; B. A family member using the insured auto; C. Any organization the insured represents; D. Any person using an auto not owned by the insured.

D. The policy covers vehicles stated on the declarations page of the PAP. The driver of a vehicle not owned by the insured is not covered.

An auto liability policy wiht split limits of 15/30/5 would pay what maximum amount in the event of a covered bodily injury loss to three people? A. $5,000; B. $15,000; C. $30,000; D. $45,000

C. The limit of $30,000 is the maximum that can be paid for all injured persons and no more than $15,000 per person.

An auto liability policy with split limits of 10/20/5 would pay how much in the event of a $10,000 loss to the other person's damaged vehicle? A. $0; B. $5,000; C. $10,000; D. $20,000

B. This split limit provides a maximum of $5,000 for property damage to another vehicle caused by the insured.

An auto liability policy with a single limit of $30,000 would pay which of the following amounts in the event of a $10,000 loss to the insured vehicle and a $25,000 bodily injury settlement to a third party? A. $10,000; B. $25,000; C. $30,000; D. $35,000

B. In this question, we are not concerned about the damage to the "insured's" vehicle but rather the coverage that would apply under the liability portion of the PAP.

Under the P.A.P., a covered auto includes all of the following EXCEPT: A. Temporary substitute; B. Non-owned auto; C. Private passenger auto listed in the Declarations; D. An owned trailer

B. The PAP is excess coverage on a non-owned vehicle. If the insured drives a non-owned vehicle and has an accident, the insurer of the owner of the vehicle would be primary.

Leased vehicles can be covered under the P.A.P. if they are leased for a minimum of: A. 30 consecutive days; B. 60 consecutive days; C. 6 consecutive months; D. 1-year

C. A leased vehicle is treated like an owned vehicle if leased for a period of at least six consecutive months.

A deer crashes into the side of the insured's car. Which of the following P.A.P. coverages would cover this damage? A. Property damage liability; B. Collision; C. Uninsured motorist property damage; D. Comprehensive

D. Animal damage is treated as an Other Than "Collision" claim.

Which of the following would be covered under a PAP? A. A truck the insured rented that is over 10,000 gross vehicle weight; B. A three wheeled vehicle used in a medical emergency; C. A motor cycle; D. A large rented motor home

B. The PAP makes an exception under the exclusions and provides coverage for a vehicle that has less than four wheels to be covered in case of a medical emergency.

An uninsured motorist vehicle under the Personal Auto Policy includes all of the following EXCEPT: A. Hit and run vehicle whose driver cannot be identified; B. A vehicle newly acquired by the named insured; C. A vehicle insured by the company that is insolvent; D. A vehicle to which no liability bond or insurance policy provides coverage at the time of the accident.

B. A "newly acquired vehicle" is not included in the definition of uninsured motorist coverage.

What is the limit for damage to a non-owned trailer under the personal auto policy? A. $500; B. $1000; C. $1500; D. $2000

C. The 2005 PAP policy provides a limit for non-trailers in the amount of $1,500. The pre-2005 forms provided a limit of $500.

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