AU 62 CHAPTER 4 - UNDERWRITING BUSINESS AUTO
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Commercial use
Answer:
A commercial auto use classification that applies to vehicles that do not fall into
service or retail use classifications.
Question:
2. Commercial package policy (CPP)
Answer:
Policy that covers two or more lines of business by combining ISO's commercial
lines coverage parts.
Question:
3. Special industry classification or secondary classification
Answer:
A CLM subclassification that applies to trucks, tractors, and trailers for listed
categories of use that have unusual hazards.
Question:
4. Gross vehicle weight (GVW)
Answer:
Maximum loaded weight for which a single vehicle is designed, as specified by the
manufacturer.
Question:
5. Garagekeepers coverage
Answer:
Coverage for damage to customers' autos left in the named insured's care while
the insured is attending, servicing, repairing, parking, or storing them.
Question:
6. Aggregate limit
Answer:
The maximum amount an insurer will pay for all covered losses during the covered
policy period.
,Question:
7. Gross combination weight (GCW)
Answer:
The maximum loaded weight specified by the manufacturer for a combination
truck-tractor and semi-tractor or trailer for which the manufacturer designed a
truck-tractor.
Question:
8. Class rating
Answer:
A rating approach that uses rates reflecting the average probability of loss for
businesses within large groups of similar risks; the predominant method used for
rating commercial properties.
Question:
9. Zone rating
Answer:
A CLM commercial vehicle measurement of exposure that applies to trucks, truck-
tractors, and trailers, other than light trucks and trailers used with light trucks,
regularly operated beyond a 200-mile radius of the principal garaging location.
Question:
10. Actual cash value (ACV)
Answer:
Cost to replace property with new property of like kind and quality less
depreciation.
Question:
11. Monoline policy
Answer:
Policy that covers only one line of business.
Question:
12. Experience rating
Answer:
A rating plan that adjusts the premium for the current policy period to recognize
the loss experience of the insured organization during past policy periods.
, Question:
13. Stated amount
Answer:
A method of valuing property often described in an insurance policy as the least
of (1) the actual cash value, (2) the cost to repair or replace, or (3) the applicable
amount of insurance for the property.
Question:
14. Towing and labor coverage
Answer:
Coverage for necessary towing and labor costs (for labor performed at the place
of disablement) due to the disablement of a covered private passenger auto.
Question:
15. Service use
Answer:
A commercial vehicle use classification that applies to vehicles that are used
principally to transport personnel and material to job sites.
Question:
16. Loss of use expenses
Answer:
Coverage extension that pays for loss of use of a rental auto when an insured
becomes contractually obligated to make such payments.
Question:
17. Specified causes of loss coverage
Answer:
Coverage for direct and accidental loss caused by fire, lightning, explosion, theft,
windstorm, hail, earthquake, flood, mischief, vandalism, or loss resulting from the
sinking, burning, collision, or derailment of a conveyance transporting the
covered auto.
Question:
18. Comprehensive coverage
Answer:
Coverage for direct and accidental loss or damage to a covered auto by any peril
except collision or overturn or a peril specifically excluded.
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Commercial use
Answer:
A commercial auto use classification that applies to vehicles that do not fall into
service or retail use classifications.
Question:
2. Commercial package policy (CPP)
Answer:
Policy that covers two or more lines of business by combining ISO's commercial
lines coverage parts.
Question:
3. Special industry classification or secondary classification
Answer:
A CLM subclassification that applies to trucks, tractors, and trailers for listed
categories of use that have unusual hazards.
Question:
4. Gross vehicle weight (GVW)
Answer:
Maximum loaded weight for which a single vehicle is designed, as specified by the
manufacturer.
Question:
5. Garagekeepers coverage
Answer:
Coverage for damage to customers' autos left in the named insured's care while
the insured is attending, servicing, repairing, parking, or storing them.
Question:
6. Aggregate limit
Answer:
The maximum amount an insurer will pay for all covered losses during the covered
policy period.
,Question:
7. Gross combination weight (GCW)
Answer:
The maximum loaded weight specified by the manufacturer for a combination
truck-tractor and semi-tractor or trailer for which the manufacturer designed a
truck-tractor.
Question:
8. Class rating
Answer:
A rating approach that uses rates reflecting the average probability of loss for
businesses within large groups of similar risks; the predominant method used for
rating commercial properties.
Question:
9. Zone rating
Answer:
A CLM commercial vehicle measurement of exposure that applies to trucks, truck-
tractors, and trailers, other than light trucks and trailers used with light trucks,
regularly operated beyond a 200-mile radius of the principal garaging location.
Question:
10. Actual cash value (ACV)
Answer:
Cost to replace property with new property of like kind and quality less
depreciation.
Question:
11. Monoline policy
Answer:
Policy that covers only one line of business.
Question:
12. Experience rating
Answer:
A rating plan that adjusts the premium for the current policy period to recognize
the loss experience of the insured organization during past policy periods.
, Question:
13. Stated amount
Answer:
A method of valuing property often described in an insurance policy as the least
of (1) the actual cash value, (2) the cost to repair or replace, or (3) the applicable
amount of insurance for the property.
Question:
14. Towing and labor coverage
Answer:
Coverage for necessary towing and labor costs (for labor performed at the place
of disablement) due to the disablement of a covered private passenger auto.
Question:
15. Service use
Answer:
A commercial vehicle use classification that applies to vehicles that are used
principally to transport personnel and material to job sites.
Question:
16. Loss of use expenses
Answer:
Coverage extension that pays for loss of use of a rental auto when an insured
becomes contractually obligated to make such payments.
Question:
17. Specified causes of loss coverage
Answer:
Coverage for direct and accidental loss caused by fire, lightning, explosion, theft,
windstorm, hail, earthquake, flood, mischief, vandalism, or loss resulting from the
sinking, burning, collision, or derailment of a conveyance transporting the
covered auto.
Question:
18. Comprehensive coverage
Answer:
Coverage for direct and accidental loss or damage to a covered auto by any peril
except collision or overturn or a peril specifically excluded.
