Question 1

A PAP is issued with both Collision and Other than Collision coverages. Two valuable cameras are stolen from the car. The cameras would be paid for by:

Accepted Answer

A)  Other than Collision coverage 
B)  Collision coverage 
C)  a homeowner's policy, if one is in force 
D)  the PAP, but ONLY if there are visible signs of forcible entry on the auto 
A)  Other than Collision coverage 
B)  Collision coverage 
C)  a homeowner's policy, if one is in force 
D)  the PAP, but ONLY if there are visible signs of forcible entry on the auto C

Question 2

What is the difference between Collision and Other than Collision coverages? Why does the PAP list certain perils in Other than Collision when they can be caused by collision? What happens if the cause of loss is not listed?

Accepted Answer

Collision is hitting an object or the overturn of the vehicle. Other than Collision consists of the ten items listed, plus any other loss not excluded by the contract. The ten items are listed to artificially separate losses that can be consTrued as either category for rating and clarity purposes (except glass breakage). Other than Collision is an open perils coverage, which means if a cause of loss is not excluded it is covered.

Question 3

What is the difference between a single limit and a split limit in expressing liability limits in the PAP?

Accepted Answer

A single limit (e.g. $100,000) identifies the maximum amount paid for one occurrence regardless of the number of people involved for bodily injury or the amount of property damage. Once the limit is spent, no more coverage exists. The split limit (e.g. 10/20/5) provides $10,000 per person, $20,000 per occurrence for bodily injury and $5,000 for property damage. The maximum paid in this circumstance is $25,000 (excluding defense).

Question 4

Which of the following is false?

Accepted Answer

A)  A pedestrian who has a PAP and is injured by an automobile can collect under his own Medical Payments coverage. 
B)  The PAP covers theft of the automobile. 
C)  The subrogation provision of the PAP does not apply to Medical Payments coverage. 
D)  There is no coverage for the insured while driving a rented automobile. 
A)  A pedestrian who has a PAP and is injured by an automobile can collect under his own Medical Payments coverage. 
B)  The PAP covers theft of the automobile. 
C)  The subrogation provision of the PAP does not apply to Medical Payments coverage. 
D)  There is no coverage for the insured while driving a rented automobile.

Question 5

Barney challenges Fred to a drag race across the mall parking lot. During the race, Barney loses control of the car and collides with another vehicle, causing serious injuries to the other driver. Which of the following is a true statement regarding the PAP's treatment of this claim?

Accepted Answer

A)  The PAP will not cover this because it occurred on private property. 
B)  The PAP will not cover this because it occurred while he was racing. 
C)  The PAP will cover this because it did not occur inside a racing facility. 
D)  The PAP will cover this because it does not in any way exclude coverage for racing. 
A)  The PAP will not cover this because it occurred on private property. 
B)  The PAP will not cover this because it occurred while he was racing. 
C)  The PAP will cover this because it did not occur inside a racing facility. 
D)  The PAP will cover this because it does not in any way exclude coverage for racing.

Question 6

Claims paid under the PAP's "Collision Coverage" are usually considered to be the insured's fault.

Accepted Answer

A) True 
 B)False

Question 7

The PAP's coverage territory is the USA, Puerto Rico, U.S. Territories and Possessions, and countries bordering the USA.

Accepted Answer

A) True 
 B)False

Question 8

Underinsured Motorist coverage:

Accepted Answer

A)  is the same as Uninsured Motorist coverage 
B)  potentially pays the difference between the negligent driver's liability coverage amount and the injured party's UM limits 
C)  pays for property damage you cause when your victims have no coverage 
D)  pays for an insured's negligence when insufficient liability limits exist 
A)  is the same as Uninsured Motorist coverage 
B)  potentially pays the difference between the negligent driver's liability coverage amount and the injured party's UM limits 
C)  pays for property damage you cause when your victims have no coverage 
D)  pays for an insured's negligence when insufficient liability limits exist

Question 9

Robert drove his car from California to New Mexico. He had an accident right after crossing the border into New Mexico. His PAP provided coverage for this incident.

Accepted Answer

A) True 
 B)False

Question 10

Tammy has a PAP with Medical Payments coverage of $5,000, and Uninsured Motorist coverage of $100,000/$200,000. She is hit by an uninsured motorist and suffers bodily injuries in the amount of $225,000. In total, her PAP will pay her:

Accepted Answer

A)  $100,000 
B)  $105,000 
C)  $205,000 
D)  $225,000 
A)  $100,000 
B)  $105,000 
C)  $205,000 
D)  $225,000

Question 11

The PAP coverage that pays the largest claims, and is possibly the most important coverage is:

Accepted Answer

A)  other than collision 
B)  medical payments 
C)  liability 
D)  collision 
A)  other than collision 
B)  medical payments 
C)  liability 
D)  collision

Question 12

Which of the following would not be paid for by the PAP's Other than Collision coverage?

Accepted Answer

A)  The insured hits a deer and damages his car. 
B)  The car is sprayed with paint as it passes by a road construction site. 
C)  The driver of the car hits a bird and breaks the windshield. 
D)  A crate falls off the back of a truck and lands on the hood of the insured's car. 
A)  The insured hits a deer and damages his car. 
B)  The car is sprayed with paint as it passes by a road construction site. 
C)  The driver of the car hits a bird and breaks the windshield. 
D)  A crate falls off the back of a truck and lands on the hood of the insured's car.

Question 13

When you have an auto accident that is your fault, your PAP's Liability coverage will pay for all of the following except:

Accepted Answer

A)  bodily injuries of passengers in other cars that you hit in the accident 
B)  bodily injuries of non-family members who are passengers in your car at the time of the accident 
C)  bodily injuries of your spouse who is a passenger in your car at the time of the accident 
D)  None of the above; in other words, ALL of the above are items your PAP's Liability coverage would pay for. 
A)  bodily injuries of passengers in other cars that you hit in the accident 
B)  bodily injuries of non-family members who are passengers in your car at the time of the accident 
C)  bodily injuries of your spouse who is a passenger in your car at the time of the accident 
D)  None of the above; in other words, ALL of the above are items your PAP's Liability coverage would pay for.

Question 14

Which of the following is not a valid reason to carry Medical Payments coverage?

Accepted Answer

A)  Guests injured in an automobile accident might hesitate to sue their hosts. 
B)  A negligent host would probably feel a moral obligation to pay for medical bills for injured guests. 
C)  To facilitate settlement for relatively small amounts of medical expense 
D)  To provide reasonably priced health insurance for the insured and his family 
A)  Guests injured in an automobile accident might hesitate to sue their hosts. 
B)  A negligent host would probably feel a moral obligation to pay for medical bills for injured guests. 
C)  To facilitate settlement for relatively small amounts of medical expense 
D)  To provide reasonably priced health insurance for the insured and his family

Question 15

In the Personal Automobile Policy, "your covered auto" includes all of the following except:

Accepted Answer

A)  any car listed on the declarations page 
B)  a newly acquired auto 
C)  your trailer, if being towed by a passenger car, pickup, panel truck, or van 
D)  a motorcycle, just as long as it is not borrowed 
A)  any car listed on the declarations page 
B)  a newly acquired auto 
C)  your trailer, if being towed by a passenger car, pickup, panel truck, or van 
D)  a motorcycle, just as long as it is not borrowed

Question 16

If an insured is using his/her own private passenger car under normal circumstances, in what situations can the insured lose legal liability coverage?

Accepted Answer

Under normal circumstances the insured w

Question 17

Antonius accidentally runs over his friend Shaq while Shaq is walking across the street. The police declare the accident to be Antonius' fault. Where could Shaq have his injuries covered?

Accepted Answer

A)  Antonius' PAP Medical Payments Coverage 
B)  Antonius' PAP Liability Coverage 
C)  Shaq's PAP Medical Payments Coverage 
D)  Both B and C 
A)  Antonius' PAP Medical Payments Coverage 
B)  Antonius' PAP Liability Coverage 
C)  Shaq's PAP Medical Payments Coverage 
D)  Both B and C

Question 18

PAP coverage A, which includes Property Damage Liability, provides coverage to reimburse you if your automobile is damaged.

Accepted Answer

A) True 
 B)False

Question 19

When you have an auto accident that is your fault, your PAP's Liability coverage will pay for all of the following except:

Accepted Answer

A)  bodily injuries of your family members riding with you 
B)  bodily injuries of non-family members who are passengers in your car at the time of the accident 
C)  bodily injuries of your best friend who is a passenger in your car at the time of the accident 
D)  the cost to repair or replace property belonging to others that you damaged in the accident 
A)  bodily injuries of your family members riding with you 
B)  bodily injuries of non-family members who are passengers in your car at the time of the accident 
C)  bodily injuries of your best friend who is a passenger in your car at the time of the accident 
D)  the cost to repair or replace property belonging to others that you damaged in the accident

Question 20

Does the PAP provide any loss of use (indirect coverage) in the contract? What is it and how does it work (if any)?

Accepted Answer

The PAP provides loss of use c

Exam 12: The Personal Auto Policy

A PAP is issued with both Collision and Other than Collision coverages. Two valuable cameras are stolen from the car. The cameras would be paid for by:

What is the difference between Collision and Other than Collision coverages? Why does the PAP list certain perils in Other than Collision when they can be caused by collision? What happens if the cause of loss is not listed?

What is the difference between a single limit and a split limit in expressing liability limits in the PAP?

Which of the following is false?

Barney challenges Fred to a drag race across the mall parking lot. During the race, Barney loses control of the car and collides with another vehicle, causing serious injuries to the other driver. Which of the following is a true statement regarding the PAP's treatment of this claim?

Claims paid under the PAP's "Collision Coverage" are usually considered to be the insured's fault.

The PAP's coverage territory is the USA, Puerto Rico, U.S. Territories and Possessions, and countries bordering the USA.

Underinsured Motorist coverage:

Robert drove his car from California to New Mexico. He had an accident right after crossing the border into New Mexico. His PAP provided coverage for this incident.

Tammy has a PAP with Medical Payments coverage of $5,000, and Uninsured Motorist coverage of $100,000/$200,000. She is hit by an uninsured motorist and suffers bodily injuries in the amount of $225,000. In total, her PAP will pay her:

The PAP coverage that pays the largest claims, and is possibly the most important coverage is:

Which of the following would not be paid for by the PAP's Other than Collision coverage?

When you have an auto accident that is your fault, your PAP's Liability coverage will pay for all of the following except:

Which of the following is not a valid reason to carry Medical Payments coverage?

In the Personal Automobile Policy, "your covered auto" includes all of the following except:

If an insured is using his/her own private passenger car under normal circumstances, in what situations can the insured lose legal liability coverage?

Antonius accidentally runs over his friend Shaq while Shaq is walking across the street. The police declare the accident to be Antonius' fault. Where could Shaq have his injuries covered?

PAP coverage A, which includes Property Damage Liability, provides coverage to reimburse you if your automobile is damaged.

When you have an auto accident that is your fault, your PAP's Liability coverage will pay for all of the following except:

Does the PAP provide any loss of use (indirect coverage) in the contract? What is it and how does it work (if any)?

Introduction to Enterprise Risk Management and Insurance

Risk Identification

Risk Assessment and Pooling

Risk-Handling Techniques: Loss Control, Risk Transfer, and Loss Financing

Risk-Handling Techniques: Diversification and Hedging

Fundamentals of Insurance

Insurable Perils and Insuring Organizations

Insurance Functions

Insurance Markets: Economics and Issues

Insurance Regulation

Insurance Contracts

Homeowners Insurance

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions and Options

Annuities

Health Insurance and Disability Income

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Commercial Property Insurance

Commercial Liability Insurance

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