Question 1

Which of the following is a covered person under the medical payments coverage of the PAP?

Accepted Answer

A)  a family member of the named insured if struck by an auto while crossing the street 
B)  a pedestrian struck by the named insured's auto 
C)  the named insured while she is operating her car as a taxi 
D)  a carjacker who is involved in an accident after stealing the insured's car 
A)  a family member of the named insured if struck by an auto while crossing the street 
B)  a pedestrian struck by the named insured's auto 
C)  the named insured while she is operating her car as a taxi 
D)  a carjacker who is involved in an accident after stealing the insured's car

Question 2

Angie was injured when her car was struck by a driver who ran a red light. The other driver carried the minimum liability coverage necessary to be considered financially responsible. Angie's injuries were $15,000 above the minimum bodily injury limit. There is a coverage that can be added to the PAP that applies when a negligent driver carries the minimum liability insurance required by the state, but is less than the insured's actual damages for bodily injury. This coverage is called

Accepted Answer

A)  medical payments coverage. 
B)  underinsured motorists coverage. 
C)  bodily injury liability coverage. 
D)  uninsured motorists coverage. 
A)  medical payments coverage. 
B)  underinsured motorists coverage. 
C)  bodily injury liability coverage. 
D)  uninsured motorists coverage.

Question 3

If the value of a vehicle is increased after repairs, such as repainting an entire auto when only one fender or door is damaged, the insurer will not pay for the increase in value. Another name for the increase in value is

Accepted Answer

A)  diminution. 
B)  betterment. 
C)  appraisal. 
D)  subrogation. 
A)  diminution. 
B)  betterment. 
C)  appraisal. 
D)  subrogation.

Question 4

All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT

Accepted Answer

A)  the cost of an appeal bond in a lawsuit stemming from an auto accident. 
B)  the cost of a bail bond for a traffic violation when no accident is involved. 
C)  interest which accrues on a liability judgment covered by the policy. 
D)  reasonable expenses incurred by the insured to testify at a trial involving a lawsuit covered by the policy. 
A)  the cost of an appeal bond in a lawsuit stemming from an auto accident. 
B)  the cost of a bail bond for a traffic violation when no accident is involved. 
C)  interest which accrues on a liability judgment covered by the policy. 
D)  reasonable expenses incurred by the insured to testify at a trial involving a lawsuit covered by the policy.

Question 5

Sarah purchased a Personal Auto Policy with liability limits of 50/100/25. Sarah ran a stop sign and hit a van. The van sustained $15,000 in damages. The following bodily injuries were suffered by passengers in the van: Passenger #1, $15,000; Passenger #2, $60,000; and Passenger #3, $10,000. Sarah sustained $5,000 in medical expenses, and Sarah's car sustained $10,000 in damages. How much will Sarah's insurer pay under Part A: Liability Coverage?

Accepted Answer

A)  $90,000 
B)  $100,000 
C)  $115,000 
D)  $125,000 
A)  $90,000 
B)  $100,000 
C)  $115,000 
D)  $125,000

Question 6

Dennis was involved in an accident. He believes the damage to his auto is $7,000. His insurer believes the damage is only $3,500. Which PAP provision is designed to handle disputes between the insurer and the insured over the amount of the loss?

Accepted Answer

A)  other insurance provision 
B)  agreed amount endorsement 
C)  coinsurance provision 
D)  appraisal provision 
A)  other insurance provision 
B)  agreed amount endorsement 
C)  coinsurance provision 
D)  appraisal provision

Question 7

Jenny purchased a Personal Auto Policy (PAP) that included property damage liability, collision coverage, medical payments coverage, and other-than-collision coverage. Jenny had too much alcohol to drink at a graduation party. While driving home from the party, Jenny ran off the road and hit a tree. Police responded to the accident, and Jenny was arrested for driving under the influence of alcohol. Which of the following statements is true regarding the damage to Jenny's car?

Accepted Answer

A)  Damage to the car is covered under Jenny's property damage liability coverage. 
B)  Damage to the car is covered under Jenny's collision coverage. 
C)  Damage to the car is covered under Jenny's other-than-collision loss coverage. 
D)  There is no coverage as Jenny was intoxicated at the time of the accident. 
A)  Damage to the car is covered under Jenny's property damage liability coverage. 
B)  Damage to the car is covered under Jenny's collision coverage. 
C)  Damage to the car is covered under Jenny's other-than-collision loss coverage. 
D)  There is no coverage as Jenny was intoxicated at the time of the accident.

Question 8

Which of the following statements is (are) true with respect to the collision damage waiver on rented cars?
I.It is inexpensive and is provided at no charge by most rental car companies.
II.It waives the renter's liability for bodily injury liability arising out of use of the rented auto.

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 9

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 Ken'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 10

All of the following losses are excluded under Part D (coverage for damage to your auto) of an unendorsed PAP EXCEPT

Accepted Answer

A)  vandals damaged a portable cell phone kept in the car. 
B)  theft of a compact disc player which was permanently installed in the auto. 
C)  damage caused to a car's engine because the named insured never changed the oil. 
D)  destruction of a radar detector which overheated and caught on fire. 
A)  vandals damaged a portable cell phone kept in the car. 
B)  theft of a compact disc player which was permanently installed in the auto. 
C)  damage caused to a car's engine because the named insured never changed the oil. 
D)  destruction of a radar detector which overheated and caught on fire.

Question 11

Owen's car is insured under a Personal Auto Policy (PAP). A hail storm occurred one evening, and his car was severely damaged. Which PAP coverage, if Owen purchased it, would cover this damage to his auto?

Accepted Answer

A)  property damage liability 
B)  uninsured motorists property damage 
C)  collision 
D)  other-than-collision 
A)  property damage liability 
B)  uninsured motorists property damage 
C)  collision 
D)  other-than-collision

Question 12

Gary purchased a Personal Auto Policy (PAP) that included collision coverage. Gary lost control of his vehicle on an icy road. He slid across the center line into oncoming traffic. Another vehicle hit his car, causing severe damage to it. Ignoring any deductible, what is the insurer's liability for damage to Gary's car?

Accepted Answer

A)  the greater of the actual cash value or the amount necessary to repair or replace the vehicle 
B)  the replacement cost of the vehicle 
C)  the lesser of the actual cash value or the amount necessary to repair or replace the vehicle 
D)  the original purchase price of the vehicle 
A)  the greater of the actual cash value or the amount necessary to repair or replace the vehicle 
B)  the replacement cost of the vehicle 
C)  the lesser of the actual cash value or the amount necessary to repair or replace the vehicle 
D)  the original purchase price of the vehicle

Question 13

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 14

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 15

Dan picked up his friend Rodney to drive to their softball game. Both Dan and Rodney have a Personal Auto Policy (PAP) with $5,000 of medical payments coverage. Dan hit a parked car, and Rodney was injured, incurring $9,000 of medical expenses. How will this claim be settled under the other insurance provision of the PAP?

Accepted Answer

A)  Both insurers will pay $4,500. 
B)  Dan's insurer will pay $5,000 and Rodney's insurer will pay $4,000. 
C)  Dan's insurer will pay $4,000 and Rodney's insurer will pay $5,000. 
D)  Dan's insurer will pay $3,000, Rodney's insurer will pay $3,000, and Rodney must pay $3,000 out of his own pocket. 
A)  Both insurers will pay $4,500. 
B)  Dan's insurer will pay $5,000 and Rodney's insurer will pay $4,000. 
C)  Dan's insurer will pay $4,000 and Rodney's insurer will pay $5,000. 
D)  Dan's insurer will pay $3,000, Rodney's insurer will pay $3,000, and Rodney must pay $3,000 out of his own pocket.

Which of the following is a covered person under the medical payments coverage of the PAP?

If the value of a vehicle is increased after repairs, such as repainting an entire auto when only one fender or door is damaged, the insurer will not pay for the increase in value. Another name for the increase in value is

All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT

Dennis was involved in an accident. He believes the damage to his auto is $7,000. His insurer believes the damage is only $3,500. Which PAP provision is designed to handle disputes between the insurer and the insured over the amount of the loss?

Which of the following statements is (are) true with respect to the collision damage waiver on rented cars? I.It is inexpensive and is provided at no charge by most rental car companies. II.It waives the renter's liability for bodily injury liability arising out of use of the rented auto.

All of the following losses are excluded under Part D (coverage for damage to your auto) of an unendorsed PAP EXCEPT

Owen's car is insured under a Personal Auto Policy (PAP). A hail storm occurred one evening, and his car was severely damaged. Which PAP coverage, if Owen purchased it, would cover this damage to his auto?

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

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management and Related Topics

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

Health-Care Reform; Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance (continued)

Homeowners Insurance, Section I

Homeowners Insurance, Section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters

Exam 20: Auto Insurance

Which of the following is a covered person under the medical payments coverage of the PAP?

If the value of a vehicle is increased after repairs, such as repainting an entire auto when only one fender or door is damaged, the insurer will not pay for the increase in value. Another name for the increase in value is

All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT

Dennis was involved in an accident. He believes the damage to his auto is $7,000. His insurer believes the damage is only $3,500. Which PAP provision is designed to handle disputes between the insurer and the insured over the amount of the loss?

Which of the following statements is (are) true with respect to the collision damage waiver on rented cars? I.It is inexpensive and is provided at no charge by most rental car companies. II.It waives the renter's liability for bodily injury liability arising out of use of the rented auto.

All of the following losses are excluded under Part D (coverage for damage to your auto) of an unendorsed PAP EXCEPT

Owen's car is insured under a Personal Auto Policy (PAP). A hail storm occurred one evening, and his car was severely damaged. Which PAP coverage, if Owen purchased it, would cover this damage to his auto?

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

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management and Related Topics

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

Health-Care Reform; Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance (continued)

Homeowners Insurance, Section I

Homeowners Insurance, Section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters