Question 1

The purpose of gap insurance is to

Accepted Answer

A) pay the difference between the bodily injury liability limit purchased and the actual amount of bodily injury liability if it exceeds the limit. 
B) pay the difference between the amount the insurer pays if a car is a total loss and the amount owed on a lease or car loan. 
C) pay the difference between the medical payments coverage limit and the actual medical expenses of injured family members or passengers in the insured auto. 
D) pay the difference between the uninsured motorists coverage limit and the actual amount of the medical expenses incurred by the insured. 
A) pay the difference between the bodily injury liability limit purchased and the actual amount of bodily injury liability if it exceeds the limit. 
B) pay the difference between the amount the insurer pays if a car is a total loss and the amount owed on a lease or car loan. 
C) pay the difference between the medical payments coverage limit and the actual medical expenses of injured family members or passengers in the insured auto. 
D) pay the difference between the uninsured motorists coverage limit and the actual amount of the medical expenses incurred by the insured.

Question 2

Which of the following statements about the liability limits of the PAP is (are)true?
I.The policy is written with split limits of liability.
II.Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 3

John has an auto which is covered for collision losses subject to a $250 deductible.Kate's auto also has collision coverage but her deductible is $500.Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs?

Accepted Answer

A) John's policy will pay $1,500,and Kate's policy will pay nothing. 
B) John's policy will pay $1,750,and Kate's policy will pay nothing. 
C) Kate's policy will pay $1,750,and John's policy will pay nothing. 
D) Kate's policy will pay $1,500,and John's policy will pay $250. 
A) John's policy will pay $1,500,and Kate's policy will pay nothing. 
B) John's policy will pay $1,750,and Kate's policy will pay nothing. 
C) Kate's policy will pay $1,750,and John's policy will pay nothing. 
D) Kate's policy will pay $1,500,and John's policy will pay $250.

Question 4

What is the purpose of the extended nonowned liability coverage endorsement to the PAP?

Accepted Answer

A) to provide liability coverage for an insured's employer when an insured uses his or her auto for business purposes 
B) to provide liability coverage for an insured who occasionally operates a nonowned auto 
C) to provide liability coverage for anyone who loans a covered auto to another driver 
D) to provide liability coverage for an insured who operates a nonowned auto on a regular basis 
A) to provide liability coverage for an insured's employer when an insured uses his or her auto for business purposes 
B) to provide liability coverage for an insured who occasionally operates a nonowned auto 
C) to provide liability coverage for anyone who loans a covered auto to another driver 
D) to provide liability coverage for an insured who operates a nonowned auto on a regular basis

Question 5

Ken purchased a PAP with liability limits of 100/300/50,medical payments coverage,and collision coverage.Ken fell asleep while driving late at night.He crossed the center line and hit a car approaching from the other direction.The following losses occurred:
-The driver of the other car suffered $30,000 in bodily injuries.
-Ken's car sustained $5,000 in damages.
-Ken incurred $5,000 in medical expenses.
-The car that Ken hit was a total loss.
Which of Ken's Personal Auto Policy (PAP)coverages will cover the other driver's medical expenses?

Accepted Answer

A) bodily injury liability 
B) collision coverage 
C) medical payments coverage 
D) property damage liability 
A) bodily injury liability 
B) collision coverage 
C) medical payments coverage 
D) property damage liability

Question 6

All of the following are insured persons under the liability coverage of the PAP EXCEPT

Accepted Answer

A) a friend to whom the named insured loans a covered auto. 
B) the employer of the named insured for actions resulting from the named insured's use of a covered auto. 
C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized. 
D) a relative of the named insured if a member of the same household. 
A) a friend to whom the named insured loans a covered auto. 
B) the employer of the named insured for actions resulting from the named insured's use of a covered auto. 
C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized. 
D) a relative of the named insured if a member of the same household.

The purpose of gap insurance is to

Which of the following statements about the liability limits of the PAP is (are)true? I.The policy is written with split limits of liability. II.Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability.

What is the purpose of the extended nonowned liability coverage endorsement to the PAP?

All of the following are insured persons under the liability coverage of the PAP EXCEPT

Risk in Our Society

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section Ii

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters

Exam 22: Auto Insurance

The purpose of gap insurance is to

Which of the following statements about the liability limits of the PAP is (are)true? I.The policy is written with split limits of liability. II.Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability.

What is the purpose of the extended nonowned liability coverage endorsement to the PAP?

All of the following are insured persons under the liability coverage of the PAP EXCEPT

Risk in Our Society

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section Ii

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters