PROPERTY AND CASUALTY AUTO INSURANCE EXAM PREP QUESTIONS AND ANSWERS 2024

appraisal a professional assessment to determine extent of damage financial responsibility proof that one can pay for damages caused, often fulfilled by purchasing insurance lessor a person granting a lease of a motor vehicle livery the transporting of people of things for hire mutually exclusive when something cannot occur simultaneously with something else private passenger vehicle an automobile used for private needs rather than for business uses personal auto policy (pap) an insurance policy for the owners of private passenger vehicles. the policy combines physical damage insurance on the automobile, with liability insurance for claims from use of the auto collision the upset or impact of a covered vehicle or non owned auto with another vehicle or object owned autos eligible vehicles titled by the insured or acquired during the policy period non owned autos any private passenger auto, pickup, van, or trailer operated by or in the custody of the named insured or a family member, but that are not titled by or furnished for the regular use of the insured hired autos includes those that are leased, hired, rented, or borrowed from someone other than an employee or partner temporary substitute personal auto policy provides coverage for any auto or trailer not owned by an insured while used for nay other vehicle described in the policy that is out of normal use because of breakdown, repair, servicing, loss, or destruction in addition to the liability limit accounts payable under the supplementary payments provisions are payable split limit coverage uses 3 dollar amounts in the event of a car accident, these numbers specify the max. amount the policy will pay for: BI for each person involved, BI for the entire accident and property damage always expressed in that order combined single coverage uses one dollar amount, indicating the max amount of coverage for all losses - regardless of the number of people involved or the amount of property damaged medical payments coverage pays reasonable expenses associated with necessary medical and funeral expenses caused by an accident and sustained by an insured expenses and services must be rendered within 3 years of the accident uninsured motorist provides the insured with money for BI that the insured would be legally entitled to recover from the owner or operator of a vehicle that does not carry the required liability insurance coverage uninsured vehicle a vehicle that doesn't carry the required insurance underinsured motorist helps an insured with BI damage caused by another motorist when that motorist has insufficient covrage will pay the difference between the insured's UIM limits and the at-fault driver's BI limits a motorist with auto liability coverage at least at legally required minimum, but too low to pay for all the damage done to another coverage for damage to your auto commonly called physical damage coverage includes both collision and other than collision coverage only when a premium is shown on the Declarations next to these coverages does coverage apply transportation expenses will be paid if the loss is caused by a collision or other-than-collision, as long as the corresponding coverage is indicated in the declarations coverage will apply to a covered or non owned auto payment of loss PAP provision the insurer has the option of paying money, repairing or replacing the damaged or stolen property. in addition, if stolen property is recovered, the insurer may return the property to the insured, paying for any damage, or they may keep all or part of the property at an agreed or reprised amount no benefit to bailee PAP provision the insurance will not directly or indirectly benefit any carrier or bailee other sources of recovery PAP provision if other insurance is applicable, the insurer will pay on a proportional basis. coverage for any covered non owned auto is excess of any other collectible source which includes insurance and any other source of recovery available to the owner of the non owned auto appraisal PAP provision if they insured and the insurer cannot agree on a settlement, either party can demand an appraisal. each party will then select and pay for its own appraiser, the appraiser will jointly select a third party appraiser (umpire). the decision reached by at least 2 of the appraisers will be binding on both parties duties after an accident or loss outlines the duties required of any person seeking damaged under the policy following a loss or accident. this PAP coverage part doesn't include any subscriptions general provisions describes the conditions that apply to all coverage parts in addition to the conditions that apply to the individual coverages bankruptcy general provision condition does not relieve the insurer of it's obligations under the policy policy changes general provision condition terms and conditions may not be changed or wavered except by endorsement to the policy issues by the insurance company fraud general provision condition the insurer will not provide coverage for nay insured that has made a fraudulent statement or engagement in fraudulent conduct as it pertains to any loss or accident legal action against the insurer general provision condition no one may bring any legal action against the insurer until all policy provisions have been complied with insurer right to recover payment general provision condition subrogation rights apply to all coverages except physical damage coverage if the damage is covered by a person using the auto with a reasonable belief that they were entitled to do so policy period and territory general provision condition defined as the US, its territories and possessions, Puerto Rico, or canada termination general provision condition this provision specifies the rights and duties of the insured and the insurer to cancel or non renew coverage. if a law in the state the policy was insured in requires a different period for notice or any special procedures other than those listed below, the policy will comply with the state's provisions. in most states, the insurer is required to provide a 10 days notice if for nonpayment of premium or if the policy is cancelled in the first 60 days of initial coverage, and 20 days notice for all other reasons if the policy has been in force for more than 60 days, the insurer can only cancel because of nonpayment of premium, if an insured's driver license has been suspended or revoked, or if the policy was obtained through material misrepresentation. if the insurer decides to non renew coverage, the insurer must provide at least 20 days notice before the renewal date. if the insured obtains other insurance on a covered automobile, the policy will terminate on the effective date of the new policy transfer of insured's interest in the policy general provision condition the insured cannot transfer their rights or interest in the policy without written consent of the insurer. if the named insured dies, coverage will be provided for the surviving spouse or legal rep of the insured, but only until the end of the policy period two or more auto policies general provision condition if the insurer has issued 2 or more policies that will respond to the same loss, the insurer's liability will be the highest applicable limit of insurance under the policy optional endorsement can be used to modify the personal auto policy to fit the needs of individuals insured amendment of policy provisions LA a mandatory endorsement that must be included to allow the policy to conform to LA laws towing and labor costs endorsement that provides a basic limit of $25 for the place a vehicle is disabled. higher limits are available for an additional premium. coverage applies to a covered auto or a non owned auto, but only applies to costs incurred at the place of disablement extended non owned coverage for named individual endorsement can broaden the liability only, or liability and medical payments coverage provided in the policy for individuals specifically named on the endorsement. It provides coverage for non owned autos that are available for the regular use of the insured, the use of covered vehicles to carry persons or property for a fee, or use of covered vehicles in other businesses misc type vehicle endorsement used to expand the definition of a covered auto to include motorized vehicles such as motorcycles, motor homes, golf carts, dune buggies, and other recreational vehicles. the liability and medical payments exclusions regarding vehicles with less than 4 wheels don't apply when this endorsement is attached to the policy. coverage is not provided for vehicles borrowed or rented unless a temporary substitute to a misc. vehicle listed in the endorsement joint ownership coverage endorsement is used when individuals own a vehicle together (insurable interest), but don't meet the traditional definition of an insured in the personal auto policy. coverage applies to individuals, other than husband and wife, who reside in the same household and nonresident relatives. the vehicle owned must be listed in the endorsement and coverage will not extend to any vehicle owned by any party that is not listed or included in the covered auto defintion named driver exclusion used when a named insured may have trouble obtaining auto insurance because the driving record of a member of the named insured's household who may use the vehicle for which the insured is seeking coverage covered auto section explains the designation symbols used in that coverage form and states whether things such as newly acquired vehicles and temporary vehicles are covered liability coverage section third party insurance covers the insured's legal responsibilities in an accident or negligent act pays for BI or PD to others, as well as for legal fees incurred by defending the insured in a suit brought against the insured included in all policies min. limits for liability coverage are set by state law garagekeepers coverage is optional and provides protection for loss or damage to customer's autos or equipment left with the insured for repair, service, or storage specifically excludes coverage for property in the insured's care, custody, or control. coverage is activated by the designation fo symbol 30 on