Personal Auto Test

Question 1

Question
If the named insured acquires a new car that does not replace a previously insured auto, what must the insured do to obtain liability coverage for the auto under her Personal Auto policy?

Nothing—coverage is automatically provided
Notify the company of the new car within 14 days of the purchase
Submit a new policy application
Notify the company immediately; no coverage applies until the company is notified

Answer 1

Notify…within 14 days of purchase

The personal auto policy considers newly acquired cars to be covered autos. How coverage applies depends on several factors, such as the policy coverage, whether or not the car is a replacement auto, and when the insurer is notified about the new car.

Question 2

Personal Auto Insurance - Unit Test
Question

Beth had an accident in her car and is liable for damages of $60,000. She has a personal auto policy with a $50,000 single liability limit and other applicable liability insurance of $25,000. How much would the personal auto policy pay for this loss?

$50,000
$35,000
$40,000
$60,000

Answer 2

a: $50,000 WRONG

The other insurance clause for liability insurance states that the company will pay only its share of a loss that is also covered by other insurance. This does not apply if the vehicle is not owned by the insured.

correct answer: $40,000!!!!!

Question 3

Question

Manisha is liable for $60,000 in bodily injury damages due to an accident she caused while driving a car she borrowed from her neighbor. Manisha’s personal auto policy has a $50,000 limit; the neighbor’s policy has a $25,000 limit.

How much would Manisha’s personal auto policy pay for this loss?

$40,000
$25,000
$50,000
$35,000

Answer 3

guess: $50,000

Sorry, but that is incorrect. Please try again.

When the insured is driving a nonowned auto, the insured’s policy is excess to other insurance. In this case, the policy will only pay the amount not paid by the neighbor’s liability policy, or $35,000.

A: $35K

Question 4

Personal Auto Insurance - Unit Test
Question
Susan is critically injured by a hit-and-run driver while she is driving her car on a work-related errand.

Her medical expenses, which total $50,000, are paid in full by her employer’s worker’s compensation policy.

Her injuries are also covered under her personal auto policy’s uninsured motorists coverage.

Assuming she carried a $100,000 limit for uninsured motorists coverage, how much would Susan be paid under her personal auto policy?

$0
$25,000
$50,000
$100,000

Answer 4

guess: $50,000

Sorry, but that is incorrect. Please try again.

The Part C limit of liability provision states that the insurer will not pay any part of a loss that could be covered under a workers’ compensation law.

da: answer: $0

Question 5

Personal Auto Insurance - Unit Test
Question

All of the following would be considered an uninsured motorist EXCEPT

1: a motorist who has less insurance than required by the state's financial responsibility law
2: an unidentified hit and run driver
3: a motorist who has enough insurance to meet the state's financial responsibility law, but not enough to fully reimburse the insured for her injuries
4: a driver whose insurance company is insolvent

Answer 5

3: This is the definition of an underinsured motorist.

Bad question????

all are examples of underinsured motorist (except 2??)

Question 6

Question
The insured, who carries $100,000 of underinsured motorists coverage, is involved in an auto accident. The other driver, who was at fault, carries the state’s required limit of $50,000 of auto liability insurance. The named insured’s damages for bodily injury are $65,000. How much will the insured’s underinsured motorists coverage pay for this loss?

$50,000
$100,000
$65,000
$15,000

Answer 6

Correct Answer!

Underinsured motorists coverage pays the difference between the at-fault driver’s amount of liability insurance and the actual amount of the insured’s BI damages. In this case, $65,000 – $50,000 = $15,000.

Question 7

Question

Which of the following losses could be paid under Uninsured Motorists coverage? Assume there are no endorsements attached to the policy.

Tabb, the insured, drives the wrong way down a one-way street and collides with another car. Tabb is seriously injured. The driver of the other car has no liability insurance.

Barb, the insured, is hit by a drunk driver who is uninsured. She is not injured, but her car is totaled.

Leslie, the insured, is injured when she is struck by a car that runs a red light. The driver has no liability insurance.

Bernard, the insured, is on his way to work when his vehicle is rear-ended by a car that was following too closely. Bernard suffers a back injury. The driver of the other car carries the minimum amount of insurance required in the state.

Answer 7

Leslie: good guess

The answer choice involving Leslie could be paid under uninsured motorist (UM) coverage.

In the choice which involves Tabb as the insured, this answer is incorrect because Tabb is at fault, so any UM coverage he may have would not apply.

UM provides coverage for bodily injury, so the answer choice with Barb is incorrect because it involves property damage.

The choice involving Bernard is incorrect because the at fault driver did carry the minimum required limits of liability insurance.

Question 8

Question

Which of the following losses would be paid under the other than collision coverage of the personal auto policy?

A radiator develops a leak after the car has 100,000 miles on it.

The insured’s car is stolen and never recovered.

The insured’s auto is damaged when it is hit by another car that runs a red light.

The insured’s auto skids on icy pavement and flips over.

Answer 8

a: stolen and never recovered

The answer involving the radiator leak is not correct because mechanical breakdown is excluded by the policy.

The answers involving the auto flipping over and the auto being hit by another car are not correct because they are collision losses.

The insured’s car being stolen and never recovered would be covered under the other than collision coverage.

Question 9

Question

An assigned risk plan covers:

individuals who are uninsurable in the standard market

individuals who do not own their own autos

individuals who cannot afford standard rates

insurance companies for losses involving government-owned autos

Answer 9

guess: 1

Assigned risk plans insure motorists with poor driving records who are unacceptable risks for most insurance companies.

Question 10

Question

Medical payments coverage provides protection for all of the following EXCEPT

the insured's family
passengers in the insured's vehicle
occupants of a vehicle that is struck by the insured's vehicle
the insured

Answer 10

A: occupants of a vehicle that is struck by the insured’s vehicle

Medical payments coverage provides protection for:

• the named insured,
• family members, and
• passengers in the named insured’s auto for injuries received in an accident, regardless of who was at fault.

It is not a form of liability coverage for injuries sustained by passengers in another auto involved in an accident with the insured.

Question 11

Personal Auto Insurance - Unit Test
Question

Under Part D of the personal auto policy, a temporary substitute auto is considered to be:

a nonowned auto
an uninsured auto
an owned auto
a covered auto

Answer 11

1: a nonowned auto

Under physical damage coverage, a temporary substitute auto is considered to be a nonowned auto instead of a covered auto.

Question 12

Question
All of the following autos owned by the named insured could be covered under a personal auto policy EXCEPT:

a panel truck used to make deliveries for the insured's manufacturing business
a station wagon
a pickup truck used on the insured's farm
a Chevrolet sedan

Answer 12

The panel truck is not eligible because it is used for business purposes

Question 13

Which of the following losses would be covered under Part D of the personal auto policy?

Custom carpeting that the named insured added to his van is damaged in a flood.
The insured's cell phone is damaged in a collision.
The insured's car is stolen on a cold winter day. The thieves run down the battery, then abandon the car in a field. Before the car is discovered, the battery freezes and is ruined.
When the insured fails to pay his taxes, the IRS confiscates his car and sells it.

Answer 13

Damage due to freezing is normally excluded under Part D. However, an exception is made when the damage results from the total theft of the auto.

Question 14

Ned loses control of his car and hits a parked car. Which coverage of Ned’s personal auto policy will pay for the damage to the parked car?

Part A—liability coverage
Part D—coverage for damage to your auto

Answer 14

Because Ned was responsible for this loss, it is covered under his liability coverage.

Part D—coverage for damage to your auto covers physical damage losses to the insured’s car.

Question 15

Nusrut was injured when she lost control of her car and hit an embankment. Which part of her personal auto policy will cover her medical expenses?

Part A—liability coverage
Part B—medical payments coverage

Answer 15

Part B

Part B—medical payments coverage provides protection for the named insured, family members, and passengers in the named insured’s auto for injuries received in an accident, regardless of who was at fault.

Question 16

Ma’Chelle was injured when she was struck by a car while walking across the street. The driver, who cannot be identified, left the scene of the accident. Would this loss be covered under Ma’Chelle’s personal auto policy?

No.
Yes, it would be covered under Part C—uninsured motorists coverage.
Yes, it would be covered under Part A—liability coverage.

Answer 16

A car operated by a hit-and-run driver who cannot be identified is considered an uninsured motor vehicle.

Question 17

During a windstorm, a tree limb fell on Tom’s car and broke the windshield. Which coverage of his personal auto policy will cover the damage to his car?

Collision coverage of Part D—coverage for damage to your auto
Other than collision coverage of Part D—coverage for damage to your auto

Answer 17

my guess: first answer

Sorry, but that is incorrect. Please try again.

Damage caused by a falling object and breakage of glass are considered – other than – collision losses under Part D of the personal auto policy.

Question 18

Ann’s auto was damaged when it was struck by another car whose driver ran a stop sign. Which part of Ann’s personal auto policy will cover the damage to her car?

Part A—liability coverage

Other than collision coverage of Part D—coverage for damage to your auto

Collision coverage of Part D—coverage for damage to your auto

Answer 18

Collision…of part D

This would be considered a collision loss under Part D of the personal auto policy because it involves the impact of an auto covered by the policy with another vehicle.

Part A—liability coverage would not cover damage to the insured’s own car.

Question 19

Which of the following would NOT be eligible for a personal auto policy?

McGuffin’s Linen Service Company
John and Suzette Oglesby, a married couple who live together
Nancy Hardwicke

Answer 19

McGuffin’s…

Question 20

Which of the following autos owned by the named insured could NOT be covered under the personal auto policy?

Pickup truck used on the insured’s farm
Chevrolet sedan and station wagon
Small trailer designed to be pulled by a car
Panel truck used to make deliveries for the insured’s small manufacturing operation

Answer 20

Panel truck..

The auto is used for business purposes.

Question 21

Which of the following could be covered under the liability section of a named insured’s personal auto policy?

Injuries to a member of the named insured’s family who was a passenger in the named insured’s car when it overturned

Injuries to a person struck by the named insured’s auto

Injuries a named insured receives in a car accident

Answer 21

Correct Answer!

Part A—liability coverage …..covers damages for bodily injury or property damage that an insured becomes legally responsible for because of an auto accident.

Injuries to the named insured or the insured’s family members would be covered under Part B—medical payments coverage.

Question 22

Which of the following DO NOT have liability coverage under Marty’s personal auto policy?

Marty’s wife, who resides with him
Marty’s 16-year-old son, who lives at home
A group of teenagers who steal Marty’s car from a parking lot and take it for a joy ride
A neighbor who borrows Marty’s car with Marty’s permission

Answer 22

…teenagers who steal…

Under Part A, the named insured, the insured’s spouse, or any family member is insured for the ownership, maintenance, or use of any auto or trailer.

A family member is any person related to the named insured who is a resident of the insured’s household.

An individual who uses a vehicle without permission is not covered under Part A unless that person is a family member using a covered auto owned by the insured.

Question 23

Which of the following could NOT be considered an uninsured motorist?

Unidentified hit-and-run driver

Motorist who has enough insurance to meet the state’s financial responsibility law but not enough to fully reimburse the insured for his injuries

Motorist that has less insurance than is required by the state’s financial responsibility law

Driver whose insurance company is insolvent

Answer 23

Motorist who has enough insurance to meet the state’s financial responsibility law but not enough to fully reimburse the insured for his injuries

Question 24

Under a no-fault plan:

a court of law must determine that an insured is legally liable for an auto loss before the insurer will pay for bodily injury or property damage caused by the insured

an insurance company reimburses its insured for auto losses regardless of who was at fault for the loss

Answer 24

Under a no-fault law, an insured driver is reimbursed by his own insurance company for medical expenses and loss of wages arising out of an auto accident, regardless of who was at fault for the accident.

Question 25

Which of the following are NOT considered family members under the personal auto policy?

The insured’s foster child
The insured’s mother-in-law, who resides with the insured
The insured’s ex-husband, who lives in another state

Answer 25

ex-husband

The personal auto policy defines a family member as any person related to the named insured who is a resident of the insured’s household. This includes those related by blood, marriage, or adoption and includes a ward or foster child.

Question 26

Which of the following would not be excluded under Part D?

The insured’s car is stolen on a cold winter day. The thieves run down the battery and then abandon the car in a field. Before the car is discovered, the battery freezes and is ruined.

When the insured fails to pay his taxes, the IRS confiscates his car and sells it.

The insured’s cell phone that she sometimes carries in her car is damaged in a collision.

Custom carpeting that the named insured added to his van is damaged in a flood.

Answer 26

Damage due to freezing is normally excluded under Part D. However, an exception is made when the damage results from the total theft of the auto.