Question 1

The appraisal provision in the Personal Auto Policy is used to determine the

Accepted Answer

A)  value of a loss payable under the property damage liability.
B)  amount paid for a physical damage loss to the insured's auto if the insured and insurer disagree.
C)  amount of auto insurance that should be purchased for an older/antique car.
D)  value of the loss payable under the medical payments coverage. B

Question 2

In addition to providing coverage in the United States,its territories and possessions,and Puerto Rico,where else does the PAP provide coverage?

Accepted Answer

A)  in Mexico
B)  in Canada
C)  in both Mexico and Canada
D)  anywhere in the world B

Question 3

Which of the following statements is true about uninsured motorists coverage under the Personal Auto Policy?

Accepted Answer

A)  The benefits are paid without regard to fault.
B)  The insured collects from his or her own insurer,and the insurer can recoup the loss payment from the other driver.
C)  Uninsured motorists benefits are limited to the medical expenses of the insured.
D)  States require the purchase of uninsured motorists coverage to be able to license an auto. B

Question 4

Duties of an insured after a collision loss covered under the PAP include which of the following?
I.Take reasonable steps to protect the vehicle from further damage.
II.Admit fault if the insured believes he or she caused the collision.

Accepted Answer

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

Question 5

The 2005 PAP states that the insurer has no duty to provide coverage if the insured fails to comply with certain listed duties.In practice,however,the insurer is only relieved of its duty to provide coverage if

Accepted Answer

A)  the insured was unaware of the listed duties.
B)  failure to comply with the duties is prejudicial to the insurer.
C)  the claim involves bodily injuries of more than $50,000.
D)  the claim occurred in another state.

Question 6

Which of the following situations would be covered under the liability section of the PAP?
I.A mechanic is sued by a pedestrian who is injured when the mechanic has an accident while road testing the insured's auto.
II.The daughter of the named insured is sued after she has an accident when a new friend she just met at a campus hangout lets her drive his car.

Accepted Answer

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

Question 7

Dennis was involved in an accident.He believes the damage to his auto is $6,000.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

Question 8

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 damage to the car that Ken hit?

Accepted Answer

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

Question 9

Larry has $25,000 of bodily injury liability coverage under his PAP.This limit is the minimum amount required by his state to be considered financially responsible.While on a vacation,Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury.Which of the following statements describes the situation for Larry while he was in the neighboring state?

Accepted Answer

A)  Larry's policy was suspended while he was in the neighboring state.
B)  Larry had only $25,000 of liability coverage.
C)  Larry's policy automatically provided $50,000 of liability coverage.
D)  Larry's policy automatically provided $100,000 of liability coverage.

Question 10

Patricia purchased a Personal Auto Policy (PAP).Her car was rear-ended by a driver who fled the scene.Patricia suffered whiplash,migraine headaches,and she was unable to work.Which of the following coverages will cover her lost work earnings?

Accepted Answer

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

Question 11

Owen rents an apartment and parks his car in the lot behind the apartment building.A hailstorm 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

Question 12

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

Question 13

A car damaged in an auto accident may have reduced market or resale value after it is repaired.Some insureds have sought to recover this reduction in market or resale value.This loss in value is called

Accepted Answer

A)  gap coverage.
B)  betterment.
C)  diminution.
D)  subrogation.

Question 14

Which of the following persons is (are)covered for liability insurance under the PAP?
I.a family member who drives a covered auto
II.a family member who occasionally drives a friend's auto

Accepted Answer

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

Question 15

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

Question 16

Which statement concerning towing and labor coverage under the PAP is (are)true?
I.There's no coverage for towing if the auto breaks down-towing is only covered if the auto needs to be towed after a collision has occurred.
II.Towing and labor coverage pays for repairs at a service station or garage.

Accepted Answer

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

Question 17

All of the following statements about Part D (coverage for damage to your auto)of the PAP are true EXCEPT

Accepted Answer

A)  Coverage may be purchased with or without collision insurance.
B)  Losses are paid regardless of fault.
C)  Coverage applies to a nonowned auto occasionally driven by an insured.
D)  No coverage is provided for newly-acquired vehicles.

Question 18

Joyce was injured by an uninsured drunk driver while she was riding in a friend's car.Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000.How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries?

Accepted Answer

A)  Each policy will pay $35,000.
B)  Joyce's policy will pay $50,000,and the friend's policy will pay nothing.
C)  Joyce's policy will pay $50,000,and the friend's policy will pay $20,000.
D)  The friend's policy will pay $50,000,and Joyce's policy will pay $20,000.

Question 19

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 damage to Ken's car?

Accepted Answer

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

Question 20

All of the following are considered to be uninsured vehicles for purposes of the uninsured motorists coverage of the PAP EXCEPT

Accepted Answer

A)  a vehicle owned by an individual who is insured,but for less than the amount required by the state's financial responsibility law.
B)  a hit-and-run vehicle,the ownership of which cannot be determined.
C)  a vehicle owned by an individual who purchased enough liability insurance to satisfy the state's financial responsibility law.
D)  a vehicle insured by a company which becomes insolvent before a claim can be paid.

Exam 22: Auto Insurance

The appraisal provision in the Personal Auto Policy is used to determine the

In addition to providing coverage in the United States,its territories and possessions,and Puerto Rico,where else does the PAP provide coverage?

Which of the following statements is true about uninsured motorists coverage under the Personal Auto Policy?

Duties of an insured after a collision loss covered under the PAP include which of the following? I.Take reasonable steps to protect the vehicle from further damage. II.Admit fault if the insured believes he or she caused the collision.

The 2005 PAP states that the insurer has no duty to provide coverage if the insured fails to comply with certain listed duties.In practice,however,the insurer is only relieved of its duty to provide coverage if

Dennis was involved in an accident.He believes the damage to his auto is $6,000.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?

Patricia purchased a Personal Auto Policy (PAP) .Her car was rear-ended by a driver who fled the scene.Patricia suffered whiplash,migraine headaches,and she was unable to work.Which of the following coverages will cover her lost work earnings?

Owen rents an apartment and parks his car in the lot behind the apartment building.A hailstorm occurred one evening,and his car was severely damaged.Which PAP coverage,if Owen purchased it,would cover this damage to his auto?

A car damaged in an auto accident may have reduced market or resale value after it is repaired.Some insureds have sought to recover this reduction in market or resale value.This loss in value is called

Which of the following persons is (are) covered for liability insurance under the PAP? I.a family member who drives a covered auto II.a family member who occasionally drives a friend's auto

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

All of the following statements about Part D (coverage for damage to your auto) of the PAP are true EXCEPT

Joyce was injured by an uninsured drunk driver while she was riding in a friend's car.Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000.How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries?

All of the following are considered to be uninsured vehicles for purposes of the uninsured motorists coverage of the PAP EXCEPT