Chapter 6 - Personal Auto Policy (PIP) Flashcards
(111 cards)
1
Q
The _____ ______ is listed in the Declarations, and includes the _______ if a resident of the same household.
A
Named Insured, Spouse
2
Q
Which one is considered a family member?
A. Friend residing in residence
B. Boyfriend/Girlfriend
C. Family Friend
D. Foster Child
A
D. Foster Child
***A family member is a person related to the named insured by blood, marriage, or adoption, including a ward or foster child who is a resident of the household.
3
Q
What is a temporary substitute vehicle?
A
It is a non-owned vehicle used in place of an insured vehicle that is out of normal use due to breakdown, repair, servicing, loss, or destruction.
4
Q
What Supplementary Payments is covered under Part A -Liability Coverage? Check all that apply. A. Loss of Earnings B. Bail Bonds C. Emotional Distress D. Post-Judgement Interest
A
A, B & D are all covered under Part A.
***As well as appeal bonds, and reasonable expenses while assisting the insurer in the defense of a claim.👨⚖️
5
Q
In what circumstances does Part A - Liability Coverage not apply? A. Sedan B. Lifted Truck C. Motorcycle D. Station wagon
A
C. Motorcycle🏍️
***Part A does not apply to vehicles with less than 2 wheels, there are separate policies for that.
6
Q
The maximum limit paid under Part A is listed where?
A
It is shown on the policy’s declarations
7
Q
True or False.
If a loss is covered under more than one part of the policy, payment can be duplicated or stacked.
A
False🤥
***duh
8
Q
If a vehicle covered by Part A is driven out of state, how does coverage change?
A
When a vehicle is driven out of state liability coverage extends to meet the laws required in that state (or Canadian province).
9
Q
Who will pay out a claim if other insurance is also in place at the time of an accident?
A
If there is more than 1 insurer the claim will be paid out based on what each insurer’s fair share would be.
10
Q
If an accident by the insured results in another person’s death, will insurance pay for their funeral?
A
Yes, Insurance will pay for necessary funeral services caused by the accident within 3 years.
**It will also pay for necessary medical services
11
Q
Will the insurer still pay medical bills of others even if it wasn’t the insureds fault?
A
Yes, medical payments are made regardless of fault.
12
Q
An insured was racing and caused an accident resulting in injuries to the other party. Will the insurer make payments for medical bills to the injured party?
A
No, racing is an exclusion under Part B.
🚫🏁🏎️
13
Q
What is Part C coverage for?
A
Part C - Uninsured Motorists Coverage
14
Q
If an at-fault driver damaged the insureds vehicle but their insurance limits are inadequate, what coverage would help the insured?
A
Underinsured Motorist Coverage (UIM) covers the insured against drivers who have auto liability insurance but the coverage limits are inadequate. UIM coverage will pay the amount over the at-fault driver’s coverage up to the UIM limit.
15
Q
What damages would be covered under Part D?
A. Hail
B. Rear Ended Accident
C. Slashed Tires
A
A, B & C - All would be covered!
***This coverage pays for direct and accidental coverage, regardless of fault.
16
Q
Define “Collision”
A
Collision is the upset of the covered vehicle or a non-owned auto or its impact with another vehicle or object.
🚖🚗
17
Q
Other Than Collision coverage is….
A
✨Comprehensive ✨
18
Q
Other Than Collision (OTC, Comprehensive) provides what type of peril coverage?
A
Open peril coverage, only doesn’t apply to excluded perils.
19
Q
Bodily Injury (BI) and Property Damage (PD) Liability is covered under which letter?
a. Coverage A
b. Coverage B
c. Coverage C
d. Coverage D
A
a. Coverage A
20
Q
What is the maximum Gross Vehicle Weight (GVW) for a (PAP) Personal Auto Policy?
a. 5,000 lbs
b. 10,000 lbs
c. 15,000 lbs
d. 25,000 lbs
A
b. 10,000 lbs
21
Q
Define Other Than Collision (OTC, Comprehensive)
A
Other Than Collision (OTC, Comprehensive) provides open perils coverage for loss caused by any peril that is not excluded in the policy.
22
Q
What does Transportation Expenses pay for? & how much does it pay?
A
Transportation expenses coverage pays for the cost of transportation expenses incurred as a result of a covered collision or other than collision loss. No deductible applies and the limit of coverage is up to $20 per day, or a total of $600.
23
Q
If an insured’s vehicle is stolen when does the payment of transportation expenses by the insurer begin and end?
A
It begins 48 hours after the theft and ends when the auto is returned or the insurer has paid the loss.
24
Q
When total theft of the covered auto or non-owned auto occurs when does payment after the loss occur? (for covered perils)
A
24 hours after loss.
25
Most Common Part D Exclusions
Vehicle being used as a Public Livery or Conveyance, wear and tear damage, freezing, mechanical breakdown, road damage to tires, war or nuclear hazard, tapes, records, disks or other media, and electronic equipment unless it's permanently installed in the vehicle.
26
Other Part D Exclusions
also include total loss by government or civil authorities; loss to radar or laser detection devices and equipment; coverage for custom furnishings and equipment in any pickup or van; a non-owned auto being used in the auto business; or any auto when located at a racing facility for organized racing.
27
Part D Limit of Liability for loss is paid on the _______ of the vehicle.
ACV - or cost necessary to repair or replace like another of like kind and quality.
28
What is Part E?
Duties After an Accident or Loss
***Include prompt notification of any claims and legal papers received; cooperation in the claims investigation and settlement; submission to a physical exam; authorization for the insurer to obtain copies of medical reports and records; submission of a requested proof of loss; notification to the police if a hit-and-run driver is involved; and protection of property from further damage.
29
Part F – General Provisions
include bankruptcy or insolvency of an insured; changes to the policy; fraud; legal action against the insurer; right to recover payment; policy period and territory; policy termination provisions; transfer of the insured’s interest in the policy; and accident payments involving two or more insured auto policies.
30
Selected endorsements for the personal auto policy include:
Selected endorsements for the personal auto policy include Extended Non-Owned Coverage for a Named Individual, Towing and Labor Costs Coverage Endorsement, Miscellaneous Type Vehicle Endorsement, Named Non-owner Coverage for a Named Individual, Excess Electronic Equipment Coverage, Limited Mexico Coverage, Optional Limits Transportation Expenses Coverage, and Joint Ownership Coverage Endorsement.
31
A vehicle designed to be pulled by a private passenger auto or a pickup or van. Also includes a farm wagon or farm implement while it’s being towed by a private passenger auto pickup, or van.
Trailer
32
Temporary Substitute
Any auto or trailer that is non-owned while being used in place of an insured vehicle which not available because of breakdown, repair, servicing, loss, or destruction
33
The limit of liability is the most paid by the insurer regardless of all of the following, except:
A. Number of vehicles involved
B. Premiums shown
C. Amount of surcharges to be applied to policy
D. Number of insureds
C. Amount of surcharges to be applied to policy
***The amount of surcharge to be applied to the policy is not linked to the limit of liability.
34
The limit of liability is the most paid by the insurer regardless of all of the following, except:
A. Number of vehicles involved
B. Premiums shown
C. Amount of surcharges to be applied to policy
D. Number of insureds
C. Amount of surcharges to be applied to policy
***The amount of surcharge to be applied to the policy is not linked to the limit of liability.
35
Part D is also known as what?
Physical Damage Coverage
36
What losses are covered under OTC? Select all that apply.
a. Windstorm
b. Fire
c. Falling Object
d. Wreck
e. Theft
A, B, C & E are all covered.
D is not because it would be covered under collision.
***OTC (other than collision) is comprehensive
37
Comprehensive covers all of the following losses, except:
A. Contact with a deer
B. Falling objects
C. Rollover
D. Theft
C. Rollover
***Rollover and hitting another vehicle or object are covered by collision coverage.
38
Non-owned
Any private passenger auto, pickup, van, or trailer not owned by, furnished, or available for the regular use of the named insured or a family member, while being used by the named insured or a family member.
Any auto or trailer being used as a temporary substitute for the covered auto, while the covered auto is out of normal use due to:
* Breakdown
* Repair
* Servicing
* Loss
* Destruction
39
Transportation Expense coverage begins __ hours after a theft and __ hours after a covered loss.
a. 24 & 48
b. 24 & 36
b. 48 &36
d. 48 & 24
d. 48 & 24
40
There is a maximum limit of $_____for a non-owned trailer and $_____ for certain electronic equipment.
$1,500 & $1,000
41
Losses covered under Part D are paid on a __________ basis,
a. Replacement
b. Actual Cash Value
c. Functional Replacement
d. The lesser of actual cash value and replacement value
d. The lesser of actual cash value and replacement value
***The insurer’s limit of liability for loss is the lesser of the actual cash value (ACV) of the vehicle and the amount necessary to repair or replace the vehicle with another of like kind and quality.
42
No Benefit to Bailee
| ✨EXAMPLE✨
If a bailment relationship exists with respect to the covered vehicle, the policy will not make payment for the benefit of anyone who had care, custody, or control of the covered auto. For example, if the insured’s vehicle was in the repair shop for servicing and the mechanic damaged the vehicle, this policy wouldn’t make payment; the repair shop’s insurance would have to pay because of its legal liability as a bailee.
43
If other insurance is in place, or if another party is available to make payment for a covered loss, this policy only pays its ____________share of the loss (as we’ve seen in the other coverage parts)
proportionate
44
What are the 6 duties required of an insured following a loss?
✨Notify the insurer promptly about how, when, and where the accident or loss occurred (also, names, addresses, witnesses, etc.)
✨Cooperate with the investigation and settlement of any claim.
✨Promptly send to the insurer any copies of notices or legal papers received.
✨Submit to a physical exam as reasonably required by the insurer.
✨Authorize the insurer to obtain copies of medical reports and other pertinent records.
✨Submit a proof of loss when required by the insurer.
45
Which of the following is not a duty of the insured if the insured’s vehicle is damaged when it hit a tree?
🆒. Promptly notify the insurance company
🉐. Call the police
🚾. Submit to a physical exam
☯️. Submit a proof of loss
🉐. Call the popo
***Calling the police is only a duty when seeking uninsured motorist coverage.
46
________ of an insured does not relieve an insurer of their obligations under a policy.
a. endorsements
b. bankruptcy
c. arbitration
b. bankruptcy
47
After an automobile policy has been in effect for 60 days, the insurer may cancel the policy for any of the following reasons, except:
A. Submission of four or more claims during a single policy period
B. Non-payment of premium
C. Material misrepresentation of information on the application by the insured
D. Suspension of the driver’s license of the named insured’s or household resident
A. Submission of four or more claims during a single policy period
***Generally, claims history is a valid reason for an insurer to nonrenew a policy, but it is NOT a valid reason to cancel a policy.
48
If an insurer non-renews an insured’s policy for underwriting reasons, what is the minimum number of days’ notice to the insured?
A. 20
B. 60
C. 30
D. 45
A. 20 days
***At least 20 days notice is required
49
What is the purpose of the Extended Non-Owned Coverage for a Named Individual endorsement?
A. Covers an individual who does not own a car
B. Coverage is extended 25 miles into Mexico
C. Covers non-owned vehicles furnished for the insured’s regular use
D. Extends coverage for a leased vehicle
C. Covers non-owned vehicles furnished for the insured’s regular use
***This endorsement provides excess coverage over the primary coverage insuring the non-owned vehicle.
50
This endorsement changes the policy by adding a definition for “miscellaneous type vehicle,” which means a motor home, motorcycle, or other similar type vehicle, ATV, dune buggy, or golf cart.
✨Miscellaneous Type Vehicle Endorsement✨
51
This endorsement provides payment, at the designated amount, for towing to a garage or for labor performed at the site of disablement.
💫Towing and Labor Costs Coverage Endorsement💫
52
This endorsement provides liability, medical payments, and uninsured motorists coverage for individuals who do not own vehicles, but often borrow or rent autos
⚕️Named Non-owner Coverage for a Named Individual⚕️
53
Excess Electronic Equipment Coverage🔊
This endorsement provides coverage for electronic equipment that is permanently installed in the vehicle in a location not used by the auto manufacturer. Coverage increases the policy limit from $1,000 to the amount shown on the endorsement. It includes $200 of coverage for tapes, records, discs, and other media used with covered excess electronic equipment.
54
🏜️Limited Mexico Coverage🏜️
This endorsement provides coverage on an excess basis and only for losses and accidents that occur in Mexico and within 25 miles of the U.S. border. In addition, coverage only applies if the insured’s visit to Mexico is of 10 or fewer days duration.
55
Optional Limits Transportation Expenses Coverage🚕🚌🚘🚆
This endorsement is used when the insured wishes to increase the limits of liability for transportation expenses that are provided in the personal auto policy ($20 per day, $600 maximum).
56
🤼Joint Ownership Coverage Endorsement (PP 03 34)🤼
This endorsement amends the definition of “you” and “your” to refer to 2 or more individuals, other than husband and wife, who reside in the same household, or to non-resident relatives who jointly own the insured vehicle.
57
Non-resident relatives
2 or more persons related by blood, marriage, or adoption who reside in separate households. This includes a ward or foster child.
58
What is Part A?
a. Liability Coverage
b. Medical Payments
c. General Provisions
d. Coverage for Damage to Your Auto
a. Liability Coverage
59
What is Part B?
a. Liability Coverage
b. Uninsured Motorist (UM)
c. Medical Payments
d. General Provisions
c. Medical Payments
60
What is Part C?
a. General Provisions
b. Medical Payments
c. Duties After an Accident or Loss
d. Uninsured Motorist (UM)
d. Uninsured Motorist (UM)
61
What is part D?
a. General Provisions
b. Coverage for Damage to Your Auto
c. Liability Coverage
d. General Provisions
b. Coverage for Damage to Your Auto
62
What is Part E?
a. Medical Payments
b. Uninsured Motorist (UM)
c. Duties After an Accident or Loss
d. Liability Coverage
🚨c. Duties After an Accident or Loss🚨
63
```
What is part F?
a, Duties After an Accident or Loss
b. Medical Payments
c. Liability Coverage
d. General Provisions
```
d. General Provisions
64
What is Part G?
a. General Provisions
b. Duties After an Accident or Loss
c. Uninsured Motorist (UM)
d. Medical Payments
There is no part G 😅🖖
65
How many days do you have to add a newly acquired vehicle to your auto policy?
4️⃣ to 1️⃣4️⃣ days.
66
If a bail bond is required due to an accident, how much will the policy pay?
a. $375
b. $500
c. $250
d. $125
c. 💸2️⃣5️⃣0️⃣
***so long as the accident resulted in a covered bodily injury or property damage claim.
67
An insured causes a car accident that leaves the driver of the other car and 2 passengers with injuries of $15,000 each and $10,000 in damage to the other vehicle. The insured's policy has limits of 25/50/25. Based on the limits, how much will the insurer pay?
a. $45,000
b. $55,000
c. $75,000
d. $25,000
b. 💰5️⃣5️⃣,0️⃣0️⃣0️⃣
BI per person of $15,000 x 3 = $45,000 + PD of $10,000 = $55,000
✨math✨
68
Of the following, which is covered under Part D - Coverage for Damage to Your Auto?
A. Road damage to tires
B. Radar and laser detection devices
C. Custom painting on a van
D. A newly acquired vehicle added to the policy within 14 days
D. A newly acquired vehicle added to the policy within 14 days
***As long as a new car is added to the policy within 14 days, comprehensive and collision will be covered.
69
Claimant A has bodily injuries in the amount of $49,500; claimant B, $19,500; and claimant C $14,000 arising out of a 4-car accident caused by the insured, whose PAP carries limits of 25/50/10. What will the insurer pay?
A. $50,000
B. $83,000
C. $14,000
D. $49,500
A. $50,000
***Regardless of the individual claim amounts, because the total of the individual claims ($83,000) exceeds the per accident limit of $50,000, the insurer's liability is limited to $50,000 for all three claimants.
70
Under Part A of the Personal Auto policy, which of the following would be covered?
A. Damage to a parked car
B. Damage to property being transported by the insured
C. Damage to the home the insured owns
D. Damage to a neighbor's lawn mower in the care of the insured
A. Damage to a parked car
***Liability coverage is not provided for: Damage to property owned, being transported, or in the care of the insured.
71
The Limited Mexico coverage provides coverage for how many miles into Mexico?
25 miles
***also 10 days or less
72
Company A's per person Limit of Liability is $100,000 and Company B's is $200,000 for the same insured. How much will Company B have to pay for a covered $6,000 loss caused by the insured?
A. Zero
B. $6,000
C. $4,000
D. $2,000
C. $4,000
***
If other auto liability insurance applies, each policy will pay its proportionate share of the loss. Company B's limit is 2/3 of the total coverage by both policies. 2/3 of the total loss of $6,000 = $4,000.
73
Under the PAP, which of the following is not considered occupying an automobile?
A. Jumping off the hood
B. Getting out of the car
C. Slamming fingers in a closing door
D. Standing by the car exchanging insurance information
D. Standing by the car exchanging insurance information
***Occupying means in or on a vehicle, which includes getting in, getting out, and jumping off.
74
Which statement is true of medical payments in a Personal Auto Policy?
A. Expenses for medical services sustained by the insured are covered
B. Medical expenses include insured's injuries that result from racing activity
C. Medical payments are provided by Part A
D. Medical expenses are paid only when the insured is legally liable
A. Expenses for medical services sustained by the insured are covered
***Coverage applies to any occupant of the insured vehicle and also to members of the insured's household as pedestrians when struck by a motor vehicle or as an occupant of another person's vehicle.
75
All of the following are true of automobile physical damage Coverage D, except:
A. Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision coverage
B. Collision coverage usually is written with a deductible
C. It covers damage to the insured auto and to another auto with which it collided
D. It covers damage to the insured auto regardless of liability
C. It covers damage to the insured auto and to another auto with which it collided
76
Which of the following are the Territorial Limits of the Personal Auto Policy?
A. The United States, Mexico, and Canada
B. The United States, its territories and possessions, Puerto Rico, and Canada
C. The United States, its territories and possessions, Canada, and Mexico
D. The United States, Puerto Rico, Canada, and Mexico
B. The United States, its territories and possessions, Puerto Rico, and Canada
77
All of the following are excluded under Part A of the Personal Auto Policy, except:
A. A vehicle driven by an unlicensed driver
B. Use of a non-owned vehicle without permission
C. Damage caused by a vehicle designed mainly for off road use
D. Intentional damage caused by the insured
A. A vehicle driven by an unlicensed driver
78
Whose policy will be primary for bodily injury coverage for the injured party if a neighbor borrows an insured's car and injures a pedestrian?
A. The neighbor's homeowners liability policy
B. There is no coverage for this loss
C. The neighbor's personal auto policy
D. The insured's auto policy
D. The insured's auto policy
***Auto coverage follows the vehicle. The insured owner's coverage is primary.
79
Collision Coverage under Part D of the Personal Auto Policy would cover which of the following?
A. Damage to the insured auto's bumper sustained when the auto crashed into a tree
B. Breakage of the windshield caused by collision with a stone or other missile
C. Damage to the auto caused by objects blown into it during a severe windstorm or tornado
D. Damage to the auto caused by collision with an animal on the roadway
A. Damage to the insured auto's bumper sustained when the auto crashed into a tree
***Part D of the policy specifically stipulates certain causes of loss that are not considered collision. They include missiles or falling objects, fire, theft, explosion, windstorm, contact with a bird or animal, among others.
80
The definition of bodily injury in the Personal Auto Policy includes which of the following?
A. False arrest
B. Defamation of character
C. Bodily harm, sickness or disease
D. Physical damage to tangible property
C. Bodily harm, sickness or disease
81
Which of the following is covered under a Personal Auto Policy?
A. A vehicle driven with permission by an unlicensed driver
B. Intentional damage done by the insured
C. Use of a non-owned vehicle used without permission
D. Liability for damage caused by a vehicle designed mainly for off road use
A. A vehicle driven with permission by an unlicensed driver
***Someone teaching someone else how to drive
82
Which vehicle is covered under Part B - Medical Payments of the Personal Auto Policy?
A. A 3-wheel vehicle
B. A vehicle used for car pools
C. A vehicle used as a residence
D. A family member's company car
B. A Vehicle used for car pools
83
An insured accidentally backs into the neighbor's son on his skateboard. The son has medical expenses and there is damage to the skateboard. Which sections of the insured's policy will pay?
A. Medical payments and collision
B. Bodily injury and collision
C. Personal injury and property damage
D. Bodily injury and property damage
D. Bodily injury and property damage
84
What does UM keep it REL stand for?
Uninsured
Motorist
Reject
Equal to BI limits
Lower than BI limits
85
Which ones are exclusions under Part C?
a. company vehicle
b. covered vehicle
c. government vehicle
a & c are exclusions
***they would be covered under other policies
86
Is a bulldozer covered under Part C?
Nope, it is excluded.
87
What is the Limit of Liability on Part D?
ACV or amount needed for repair or replacement (whichever is less).
88
Is Part D automatically included on auto policies?
No, Part D is an optional coverage that is subject to deductible.
***It includes collision and OTC
89
How much is covered with Transportation expenses per day and the maximum?
$20/day, max of $600.
***an endorsement can be added to increase this
90
```
When does payment for Transportation Expenses begin after covered damage or a loss?
a. 24 hours
B. 48 hours
C. 72 hours
D. 12 hours
```
a. 24 hours
91
What are the Duties after an Accident or Loss (Part E)?
***hint: there are 6
1. Promptly notify Insurer
2. Cooperate with investigation
3. Forward legal documents
4. Submit to physical if required
5. Authorize insurer medical record access
6. Submit proof of loss
* **Certain cases require you to also file a police report & protect property from further damage
(i. e. if your car is stolen or if your window is broken - putting a towel or plastic over it)
92
Would Bankruptcy absolve the Insurer of obligations?
No, even if the insurer has gone bankrupt they are still obligated to fulfill their duties.
93
What locations are the Policy Territories?
US, it's territories (US Virgin Islands, etc.) Puerto Rico & Canada.
94
The Policy Period is the...
a. Length of time in which the insured was not covered
b. Time period of the policy
c. Period in which policy was being made in Underwriting
b. Time period of the policy
95
What does Part A cover?
Liability Payments
96
What does Part B cover?
Medical Payments
97
What does Part C cover?
Uninsured Motorist / Underinsured Motorist
UM/UIM
98
What does Part D cover?
Coverage for Damage to your Auto
***D for Damage
99
What does part E cover?
Duties after Accident or Loss
100
What does Part F cover?
General Provisions
***they spell out the obligations of the insurer and named insured
101
What is a covered auto?
Any vehicle listed in the Declarations page
102
Coverage Parts B & C are for...?
You & Yours
103
Coverage Part A always pays to ______?
a. You & Yours
b. Insurer
c. Others
d. Resident Spouse
c. Others
***Coverage A pays for BI & PD to others, never for yourself.
104
Define Insured
Named Insured, Family Member, Person using vehicle (w/insureds permission) any person occupying a covered vehicle (passengers).
105
What can be added to a PAP other than coverages A, B, C, D, E & F?
Selected Endorsements
106
What does OPP stand for?
Owners Primary Policy
107
Collision
Covered vehicle or nonowned auto is impacted by another vehicle or object
108
Which occurrences listed below are covered under Other Than Collision (Comprehensive)?
a. Hit a stop sign
b. Hail damage
c. Collide with a deer
d. Flood
B, C & D are all covered under OTC.
***don't let the word 'collide' fool ya
109
For a Newly Acquired Trade In, what coverages are automatically applied before being added to the auto policy & for how long?
Parts A, B & C are covered until the end of the policy term. Physical Damage (Part D) is covered for 14 days with OTC & COLL deductibles being $500 each.
110
If a vehicle is newly acquired and not replacing another but being added to the # of vehicles an insured owns, how many days of coverage are they automatically given before calling to add the vehicle to the policy?
a. 7 days
b. 4 days
c. 14 days
d. End of policy term
c. 14 days
***With parts A, B, & C for 14 days & Liability only for 4 days
111
100/300/50
What does the 100/300 stand for? What type of limit is this?
What does the 50 stand for? What type of limit is this?
100 is for BI per person - 300 is BI per occurrence/accident - 100/300 is a Split Limit, meaning 100 per person but no more than 300 total.
50 if for PD per occurrence. It is a Specific Limit.
