Question 1

The purpose of the Miscellaneous-Type Vehicle Endorsement to the PAP is to

Accepted Answer

A)   add coverage for newly-acquired autos.
B)   provide coverage for when the insured is using someone else's auto with the permission of the owner.
C)   insure motorcycles, mopeds, motor scooters, and similar vehicles.
D)   provide coverage for when the insured is using someone else's auto without the permission of the owner. C

Question 2

Which of the following statements about the uninsured motorists coverage of the PAP is true?

Accepted Answer

A)   The coverage usually applies only to property damage.
B)   The coverage applies only if the uninsured motorist is legally liable.
C)   Unless higher amounts are purchased, the maximum benefit is normally limited to $1,000.
D)   A covered person's only recourse is to sue the insurer if there is a disagreement over the amount of damages. B

Question 3

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 4

After the Personal Auto Policy has been in force for 60 days (or is a renewal policy), all of the following are grounds for the insurer to cancel the policy EXCEPT

Accepted Answer

A)   nonpayment of premiums
B)   the insured's license to drive is suspended
C)   the insurer discovers material misrepresentation by the insured in the application process
D)   the insured received a traffic ticket

Question 5

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 6

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.

Question 7

The insurance company's options for settling a collision loss to a covered auto under the PAP include which of the following?
I.Pay the loss in money.
II.Repair or replace the damaged auto.

Accepted Answer

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

Question 8

Which of the following is considered to be a collision loss under Part D (coverage for damage to your auto) of the PAP?

Accepted Answer

A)   The covered auto was damaged when the car hit a deer.
B)   The covered auto is vandalized by a thief after it is stolen.
C)   The covered auto is damaged when it slid off an icy road and hit a fence.
D)   The covered auto is damaged by a fire after the engine overheated.

Question 9

All of the following are considered to be a covered auto under the Personal Auto Policy EXCEPT

Accepted Answer

A)   a trailer owned by the insured.
B)   a temporary substitute auto loaned to the insured while her care is being repaired.
C)   a motorcycle owned by the insured.
D)   a newly acquired auto.

Question 10

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 11

Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP?
I.A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses
II.The spouse of a named insured who is killed by an uninsured motorist

Accepted Answer

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

Question 12

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 13

Which of the following statements concerning the collision damage waiver when renting an auto is true?
I. It relieves the renter from legal liability to third parties arising out of operation of the rented car.
II. It relieves the renter from legal liability for the vehicle if it is damaged or stolen.

Accepted Answer

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

Question 14

John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie's car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. How much will be paid by each policy?

Accepted Answer

A)   Sophie's policy will pay $150,000, John's policy will pay $150,000.
B)   Sophie's policy will pay $50,000, John's policy will pay $250,000.
C)   Sophie's policy will pay $100,000, John's policy will pay $200,000.
D)   John's policy will pay the entire amount.

Question 15

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 16

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 17

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 18

A vehicle is considered a constructive total loss when

Accepted Answer

A)   it cannot be repaired.
B)   the repair cost exceeds the actual cash value.
C)   it can be repaired, but the insured prefers a cash settlement.
D)   it can be repaired, but the insurer prefers a cash settlement.

Question 19

In which of the following situations would medical payments be paid under an unendorsed PAP?

Accepted Answer

A)   injuries incurred while riding a motorcycle
B)   injuries incurred while an auto is being used without the presumption that permission would have been granted to use the auto
C)   injuries incurred in an auto while it is used in a share-the-expense car pool
D)   injuries incurred during the course of employment if workers compensation benefits are available

Question 20

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.

Exam 20: Auto Insurance

The purpose of the Miscellaneous-Type Vehicle Endorsement to the PAP is to

Which of the following statements about the uninsured motorists coverage of the PAP is true?

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

After the Personal Auto Policy has been in force for 60 days (or is a renewal policy) , all of the following are grounds for the insurer to cancel the policy EXCEPT

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

The insurance company's options for settling a collision loss to a covered auto under the PAP include which of the following? I.Pay the loss in money. II.Repair or replace the damaged auto.

Which of the following is considered to be a collision loss under Part D (coverage for damage to your auto) of the PAP?

All of the following are considered to be a covered auto under the Personal Auto Policy EXCEPT

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.

Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP? I.A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses II.The spouse of a named insured who is killed by an uninsured motorist

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

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

A vehicle is considered a constructive total loss when

In which of the following situations would medical payments be paid under an unendorsed PAP?

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?