CPCU 553 - chapter 4 Exam Questions with 100% correct Answers

CPCU 553 - chapter 4 Exam Questions with 100% correct Answers What does the insuring agreement of coverage part D say? - Answer ️️ -Insurer promises to pay for any direct and accidental loss to "your covered auto" or a "non-owned auto" as defined in the PAP, minus the deductible. Describe the two categories of direct and accidental losses to an auto. - Answer ️️ -Collision losses and other than collision (OTC) losses. How is collision defined in the PAP and provide examples: - Answer ️️ -1. Collision is the upset of or impact of "your covered auto" or "non-owned auto" with another vehicle or object. 2. Examples: Colliding with another car Hitting a tree Overturning Parking lot: door of other car hits insured car If the driver is responsible for an accident that damages his/her car, will the collision coverage apply? - Answer ️️ -Collision losses are paid regardless of fault. What options has an insured for collecting damages if the covered vehicle has collision coverage and another driver causes an accident damaging his/her car? - Answer ️️ -The insured can collect either from the other driver (or the driver's insurer) or from his/her own insurer. In this case the insurer has the right to recover payment from the driver at fault (or the driver's insurer). What does Other Than Collision (OTC ) coverage cover? - Answer ️️ -OTC coverage insures auto physical damage losses that are not caused by collision and are not specifically excluded. What are examples (10) of OTC losses as listed in the PAP? - Answer ️️ -1. Missiles or falling objects 2. Fire 3. Theft or larceny 4. Explosion or earthquake 5. Windstorm 6. Hail, water, or flood 7. Malicious mischief or vandalism 8. Riot or civil commotion 9. Contact with a bird or other animal 10. Breakage of glass What is important to know about the premium and deductible of OTC vs collision coverage? - Answer ️️ -OTC coverage is less expensive than collision coverage and the deductible of OTC is often lower. What is important about contact with a bird or animal and breakage of glass? - Answer ️️ - Collision with a bird or animal is an OTC loss! Therefore the OTC deductible applies to such losses. If glass breakage is caused by collision, the insured can elect to have the glass breakage covered as part of the collision loss (and collision deductible would apply). If the insured elects to cover it under OTC, both deductibles could apply. Describe how the part D coverage applies to a non-owned auto. (4) - Answer ️️ -1. An insured can occasionally drive a rented or borrowed auto, and the insured's APD insurance will cover the vehicle (in xs of any APD cover on this car). 2. Coverage is excluded if the insured regularly drives a rented or borrowed vehicle, or if one is made available for an insured's regular use. 3. The definition of non-owned auto also includes any auto or trailer that is being used as a temporary substitute for a covered auto or trailer that is out of normal use because of its breakdown, repair, servicing, loss, or destruction. 4. If a non-owned auto is damaged by a covered cause of loss, the PAP provides the broadest coverage applicable to any covered auto shown in the declarations. List three reasons for deductibles in APD coverage. - Answer ️️ -1. Reduction of small claims 2. Holding down premiums 3. Encouraging insureds to be careful in protecting their car against damage or theft. Explain the coverage provided by part D in respect of transportation expenses. - Answer ️️ -1. Following a covered physical damage loss to a covered auto, the insurer will reimburse the insured for temporary transportation expenses, such as rental fees or taxi fares, up to $20 per day, to a maximum of $600 for each covered loss. 2. Same limits apply to a nonowned auto when the insured it legally responsible to the auto' s owner for the owner's transportation expenses. 3. A nonowned rental car is also subject to these limits when the car's owner claims a loss of income because the car cannot be rented while it is being repaired and the named insured is legally responsible for the renter's loss of income. Describe the deductibles which apply to transportation expenses. - Answer ️️ -The deductible is not a dollar amount. Transportation expenses are subject to a waiting period, which is essentially a deductible stated in time rather than in