Question 1

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

An insured's duty after a collision loss covered under the Personal Auto Policy (PAP) includes taking reasonable steps to protect the vehicle from further damage. However, admitting fault should only be done after speaking with the insurance company and should not be done blindly. The insurance company will investigate the claim and determine fault based on the evidence available. Therefore, only option I is correct. Option II is incorrect as admitting fault should not be done without consulting the insurance company first.

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

The Personal Auto Policy (PAP) provides coverage in the United States, its territories and possessions, Puerto Rico, and also extends coverage to Canada. It does not automatically provide coverage in Mexico or anywhere else in the world.

Question 3

Sarah purchased a Personal Auto Policy with liability limits of 50/100/25.Sarah ran a stop sign and hit a van.The van sustained $15,000 in damages.The following bodily injuries were suffered by passengers in the van: Passenger #1,$15,000;Passenger #2,$60,000;and Passenger #3,$10,000.Sarah sustained $5,000 in medical expenses,and Sarah's car sustained $10,000 in damages.How much will Sarah's insurer pay under Part A: Liability Coverage?

Accepted Answer

Sarah's Personal Auto Policy with liability limits of 50/100/25 means her insurer will cover up to $50,000 per person for bodily injury, $100,000 total per accident for bodily injury, and $25,000 for property damage. The insurer will pay $50,000 for Passenger #2 (the limit per person), $15,000 for Passenger #1, and $10,000 for Passenger #3, totaling $75,000 for bodily injuries (not exceeding the $100,000 total per accident limit). Additionally, the insurer will cover $15,000 for the van's damages. Therefore, the total payment under Part A: Liability Coverage is $90,000. Sarah's medical expenses and her car damages are not covered under this part.

Question 4

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

Collision loss under Part D of the Personal Auto Policy (PAP) includes damage to the covered auto resulting from the auto hitting another object or overturning. In choice C, the auto sliding off an icy road and hitting a fence is a direct example of a collision, as it involves the vehicle hitting another object.

Question 5

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

Uninsured motorists coverage is designed to protect insured individuals from losses caused by drivers who do not have insurance or in the case of hit-and-run incidents, where the at-fault driver cannot be identified or located. This coverage can help pay for medical expenses, pain and suffering, and lost wages, which would include Patricia's lost work earnings due to the accident.

Question 6

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

Collision coverage will cover the damage to Ken's car as it provides coverage for damage to the insured's car resulting from a collision with another object or vehicle, regardless of who was at fault for the accident.

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

The insurance company can choose to pay the loss in money or repair or replace the damaged auto, or both. The specific option chosen will depend on the circumstances of the loss and the terms of the policy.

Question 8

Which of the following statements is (are)true with respect to the collision damage waiver on rented cars?
I.It is inexpensive and is provided at no charge by most rental car companies.
II.It waives the renter's liability for bodily injury liability arising out of use of the rented auto.

Accepted Answer

Neither of the statements is true. The collision damage waiver is an additional charge that the renter can choose to pay to waive the rental company's right to charge for damage to the rented car. It does not cover bodily injury liability, which is usually covered by the renter's own auto insurance policy.

Question 9

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

The collision damage waiver only relieves the renter from legal liability for the vehicle if it is damaged or stolen. It does not cover liability to third parties, so statement I is false.

Question 10

Dennis was involved in an accident.He believes the damage to his auto is $7,000.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

The appraisal provision is designed to handle disputes between the insurer and the insured over the amount of the loss. It allows both parties to choose an appraiser to evaluate the damage and come to a resolution.

Question 11

All of the following losses are excluded under Part D (coverage for damage to your auto)of an unendorsed PAP EXCEPT

Accepted Answer

Theft of a compact disc player that was permanently installed in the auto is covered under Part D of an unendorsed Personal Auto Policy (PAP), as it is considered part of the car. Other options describe losses that are typically excluded, such as damage from lack of maintenance, or to personal property not permanently installed in the vehicle.

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

Bodily injury liability coverage will cover the other driver's medical expenses. The policy has liability limits of 100/300/50, which means that up to $100,000 per person and $300,000 per accident will be covered for bodily injury to others.

Question 13

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

Since John was driving Kate's car at the time of the accident, Kate's policy will be the primary policy and will pay up to its limit of coverage ($2,000 - $500 = $1,500). John's policy will then cover the remainder up to its limit of coverage ($1,500 - $250 = $1,250). Therefore, Kate's policy will pay $1,500 and John's policy will pay $250.

Question 14

Rob purchased a Personal Auto Policy (PAP)with collision and other-than-collision coverage.Which of the following losses would be covered under his policy?

Accepted Answer

Rob's Personal Auto Policy (PAP) with collision and other-than-collision coverage would cover the damage to his car caused by a flash flood, as this is considered an "other-than-collision" loss. The policy typically does not cover the vehicle when used for commercial purposes (like a taxi), personal property stolen from the vehicle (like a radar detector), or wear and tear on the vehicle (like defective tires wearing out).

Question 15

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

Ken's property damage liability coverage under his Personal Auto Policy (PAP) is designed to cover the damage to the other car that he hit.

Question 16

Angie was injured when her car was struck by a driver who ran a red light.The other driver carried the minimum liability coverage necessary to be considered financially responsible.Angie's injuries were $15,000 above the minimum bodily injury limit.There is a coverage that can be added to the PAP that applies when a negligent driver carries the minimum liability insurance required by the state,but is less than the insured's actual damages for bodily injury.This coverage is called

Accepted Answer

The coverage that applies when the negligent driver carries the minimum liability insurance required by the state but is less than the insured's actual damages for bodily injury is underinsured motorists coverage. This coverage is designed to provide additional coverage in the event that the at-fault driver's liability limits are inadequate to fully compensate the injured party. Medical payments coverage pays for medical expenses for the insured and passengers in the insured's vehicle, bodily injury liability coverage provides coverage for injuries that the insured causes others, and uninsured motorists coverage provides coverage when the at-fault driver carries no insurance. None of these coverages apply in this scenario.

Question 17

Which of the following statements about the Miscellaneous-Type Vehicle Endorsement to the PAP is (are)true?
I.It provides bodily injury liability coverage for any vehicle rented by the insured.
II.It can be added to PAP to insurance motorcycles and motor scooters.

Accepted Answer

The Miscellaneous-Type Vehicle Endorsement does not provide bodily injury liability coverage for rented vehicles. However, it can be added to a PAP to provide coverage for motorcycles and motor scooters. Therefore, only statement II is true.

Question 18

All of the following statements about the termination provisions of the PAP are true EXCEPT

Accepted Answer

Statement C is false. The insurer can cancel the policy after it has been in force for 60 days for a variety of reasons, including non-payment of premium or fraud, not just if the insured has three or more traffic violations.

Question 19

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

Accepted Answer

The Miscellaneous-Type Vehicle Endorsement adds coverage for motorcycles, mopeds, motor scooters, and similar vehicles which are not typically covered under a standard Personal Auto Policy (PAP). The other options listed are covered under different endorsements or circumstances.

Question 20

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 Ken's medical expenses?

Accepted Answer

Ken's medical expenses will be covered by the medical payments coverage that he purchased as part of his PAP. This coverage provides payment for medical expenses incurred by Ken, regardless of who caused the accident, up to the limit specified in the policy.

Quiz 20: Auto Insurance

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.

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

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?

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 statements is (are) true with respect to the collision damage waiver on rented cars? I.It is inexpensive and is provided at no charge by most rental car companies. II.It waives the renter's liability for bodily injury liability arising out of use of the rented auto.

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.

Dennis was involved in an accident.He believes the damage to his auto is $7,000.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?

All of the following losses are excluded under Part D (coverage for damage to your auto) of an unendorsed PAP EXCEPT

Rob purchased a Personal Auto Policy (PAP) with collision and other-than-collision coverage.Which of the following losses would be covered under his policy?

Which of the following statements about the Miscellaneous-Type Vehicle Endorsement to the PAP is (are) true? I.It provides bodily injury liability coverage for any vehicle rented by the insured. II.It can be added to PAP to insurance motorcycles and motor scooters.

All of the following statements about the termination provisions of the PAP are true EXCEPT

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