Question 1

In modified no-fault laws, suit can be brought against an automobile driver for damages exceeding the _____ amount.

Accepted Answer

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Question 2

In an automobile insurance policy, if you choose this limit of liability, a set of two limits will be specifically applied to bodily injury, and a single, aggregate limit will be applied to property damage.For the bodily injury limits, one limit applies per person, per accident, and a second limit is the total the insurer will pay for your liability to all persons injured in an accident.The limit for property damage is shown separately.Identify this limit of liability.

Accepted Answer

Split limit of liability is characterized by having separate limits for bodily injury per person, total bodily injury per accident, and property damage, which matches the description provided.

Question 3

Identify the coverage that fills in the coverage gap that arises when the negligent party meets the financial responsibility law of the state, but the auto accident victim has losses in excess of the negligent driver's liability limit.

Accepted Answer

Underinsured motorist coverage is designed to fill the gap when the at-fault driver's insurance is not sufficient to cover the damages or medical expenses of the accident victim. This coverage steps in when the other driver's liability limits are too low to cover all of the victim's costs.

Question 4

Write a note on the duties after an accident or loss in an auto insurance coverage.

Accepted Answer

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Question 5

Write a short note on joint underwriting association.

Accepted Answer

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Question 6

Identify the coverage that pays for bodily injuries caused by an accident with another vehicle whose driver is negligent and has no liability insurance or less than that required by law.

Accepted Answer

Uninsured motorist coverage pays for bodily injuries caused by an accident with another vehicle whose driver is negligent and has no liability insurance or less than that required by law.

Question 7

Justify the growing interest in no-fault laws.Discuss it advantages and disadvantages of no-fault laws.

Accepted Answer

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Question 8

All events resulting in automobile liability are:

Accepted Answer

Automobile liability policies typically operate on a basis where coverage is provided for all events unless they are specifically excluded in the policy terms. This ensures a broad scope of protection for the insured.

Question 9

Which of the followings limits is best described as 150/300/50?

Accepted Answer

The correct choice is A because it accurately describes the limits as $150,000 for bodily injury per person, $300,000 total for bodily injury per accident, and $50,000 for property damage per accident.

Question 10

Differentiate between single limit of liability and split limit of liability.

Accepted Answer

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Question 11

Explain no-fault laws and its categories in detail.

Accepted Answer

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Question 12

Which of the following statements is true about exclusions in an automobile insurance policy?

Accepted Answer

Bodily injury to an employee of the covered person who is eligible for workers' compensation benefits is typically excluded in an automobile insurance policy.

Question 13

In an automobile insurance policy, the only limit of liability that you are concerned with in this case is the aggregate limit.Once all losses equal this limit, you will have to bear the burden of any further liability.Identify this limit of liability.

Accepted Answer

The correct answer is E) Single limit of liability. This type of limit refers to a single dollar limit that applies to any combination of property damage liability and bodily injury liability claims. Once the aggregate limit is reached, the policyholder is responsible for any additional costs.

Question 14

If a person who receives payment from the insurer has the right to recover damages from another, the insurer has the right to:

Accepted Answer

Subrogation is the legal right that allows an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means to recover the amount of the claim paid by the insurance carrier to the insured for the loss.

Question 15

Under _____ laws, benefits are provided by insurers without regard to who caused the accident.

Accepted Answer

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Question 16

Which of the following occurs when a single auto policy covers two vehicles, and the court interprets this situation to yield a limit of liability equal to double the amount shown in the policy declarations?

Accepted Answer

Stacking refers to the practice of combining the coverage limits of multiple insurance policies or coverages on multiple vehicles under the same policy to increase the total available coverage in the event of a claim. When a court interprets a policy in such a way that allows for the limits to be combined or "stacked," it effectively doubles (or otherwise increases) the limit of liability beyond what is shown for a single vehicle in the policy declarations.

Question 17

Which of the following identifies you by name and address and shows the term of the policy, the premiums charged, the coverages provided, and the limits of liability of the coverages?

Accepted Answer

The Declarations page of an insurance policy identifies the policyholder by name and address, outlines the term of the policy, the premiums charged, the coverages provided, and the limits of liability. It essentially summarizes the key elements of the insurance agreement.

Question 18

Assume that you have limits of 15/25/15 ($15,000/$25,000/$15,000), the minimum required in the state where your car is garaged.If you are driving in a state that requires 25/50/20 ($25,000/$50,000/$20,000) and are involved in an accident, your insurer will interpret your policy as if it had the higher limits.Thus, even though you have to meet only the requirements where you live, your policy will provide the limits you need in any state or province in which you may be driving.Identify the provision in your automobile insurance policy that makes this possible.

Accepted Answer

The provision that makes it possible for your insurance policy to automatically adjust to meet the minimum requirements of the state you are driving in is known as the "Out-of-state" coverage provision. This ensures that drivers remain adequately covered according to the local laws of the state they are in, even if those laws require higher limits than the driver's home state.

Question 19

In states that have _____, all automobile insurers in the state are members and the association is, in effect, an insurance industry company.

Accepted Answer

Joint Underwriting Associations (JUAs) are setups where all automobile insurers in a state are members, effectively acting as an insurance company for the industry. This is particularly used in markets where coverage is hard to obtain, ensuring that all drivers can be insured.

Question 20

In states that have _____, every auto insurer is required to issue auto insurance to any licensed driver who applies and can pay the premium; in return, insurers can transfer the burden of bad risks to a pool to which all auto insurers belong.

Accepted Answer

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Quiz 14: Multirisk Management Contracts: Auto