Personal Lines Insurance Practice Exam Questions with 100% Verified Correct Answers 2026

Personal Lines Insurance Practice Exam Questions with 100% Verified Correct Answers 2026 Bobby, age 16, borrows his parents' car without their permission and gets into an accident. Which of the following statements about coverage under the parents' personal auto policy is CORRECT? A) Bobby is covered by his parents' policy because he is included in the definition of named insured. B) Bobby is not covered for this accident because he used the car without permission. C) Bobby is not covered because it was not his car. D) Bobby is covered by his parents' policy because he is a family member. - Correct Answer D) Bobby is covered by his parents' policy because he is a family member. Explanation: Bobby is a family member and thus automatically is covered under the family's PAP policy. Even though Bobby is using the car without permission, the exclusion pertaining to nonpermissive users does not apply to use of an owned auto policy by resident family members. Reference: 8.7.2 in License Exam Manual A parking valet at a hotel uses a guest's car to do a personal errand and damages the car in a collision. The guest has a personal auto policy (PAP). The insurance company will pay the claim and ____. A) relieve the parking valet of legal liability for the loss B) subrogate against the named insured C) subrogate against the parking valet D) recover any additional loss from the lienholder - Correct Answer C) subrogate against the parking valet Explanation: Part-D coverage for Damage to Your Auto of the PAP contains a no benefit to bailee provision. This provision states that a carrier or other bailee for hire, such as a parking gar5age, service station, or moving company will not directly or indirectly benefit from the PAP's insurance. A bailee is an individual or entity that assumes possession of goods owned by another for the purpose of transporting, servicing, or storing them. When temporary custody is assu