Auto Insurance

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Question 1
Free
Multiple Choice

Which of the following statements about the liability limits of the PAP is (are) true?
I)The policy can be written with split limits of liability.
II)Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability.

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 2
Free
Multiple Choice

Which of the following statements about the payment of defense costs by the PAP is (are) true?
I)They are paid in addition to the policy limits.
II)They are payable even after the limit of liability is exhausted.

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 3
Free
Multiple Choice

All of the following are covered autos under the liability section of the PAP EXCEPT

Choose correct answer/s
A

a nonowned van which is driven by the insured on a regular basis.

B

a trailer owned by the named insured.

C

a borrowed auto used by the insured as a substitute for a stolen covered auto.

D

a newly acquired auto which replaces a vehicle previously described in the policy.

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Question 4
Free
Multiple Choice

All of the following are insured persons under the liability coverage of the PAP EXCEPT

Choose correct answer/s
A

a friend to whom the named insured loans a covered auto.

B

the employer of the named insured for actions resulting from the named insured's use of a covered auto.

C

the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized.

D

a relative of the named insured if a member of the same household.

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Question 5
Free
Multiple Choice

Which of the following persons is (are) covered for liability insurance under the PAP?
I)a family member who drives a covered auto
II)a family member who occasionally drives a friend's auto

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 6
Multiple Choice

All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT

Choose correct answer/s
A
the cost of an appeal bond in a lawsuit stemming from an auto accident.
B
the cost of a bail bond for a traffic violation when no accident is involved.
C
interest which accrues on a liability judgment covered by the policy.
D
reasonable expenses incurred by the insured to testify at a trial involving a lawsuit covered by the policy.
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Question 7
Multiple Choice

Which of the following situations would be covered by the liability section of an unendorsed PAP if the insured is legally liable?

Choose correct answer/s
A
The insured injures a pedestrian while operating a friend's new motorcycle.
B
The insured backs into and damages the garage door of his rented house.
C
The insured intentionally runs into another motorist's car after the driver cut in front of him.
D
The insured damages a parked car while driving a dump truck for his employer.
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Question 8
Multiple Choice

What is the purpose of the extended nonowned liability coverage endorsement to the PAP?

Choose correct answer/s
A
to provide liability coverage for an insured's employer when an insured uses his or her auto for business purposes
B
to provide liability coverage for an insured who occasionally operates a nonowned auto
C
to provide liability coverage for anyone who loans a covered auto to another driver
D
to provide liability coverage for an insured who operates a nonowned auto on a regular basis
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Question 9
Multiple Choice

Which of the following situations would be covered under the liability section of the PAP?
I)A mechanic is sued by a pedestrian who is injured when the mechanic has an accident while road testing the insured's auto.
II)The daughter of the named insured is sued after she has an accident when a new friend she just met at a campus hangout lets her drive his car.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 10
Multiple Choice

Larry has $25,000 of bodily injury liability coverage under his PAP. This limit is the minimum amount required by his state to be considered financially responsible. While on a vacation, Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury. Which of the following statements describes the situation for Larry while he was in the neighboring state?

Choose correct answer/s
A
Larry's policy was suspended while he was in the neighboring state.
B
Larry had only $25,000 of liability coverage.
C
Larry's policy automatically provided $50,000 of liability coverage.
D
Larry's policy automatically provided $100,000 of liability coverage.
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Question 11
Multiple Choice

John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie's car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. How much will be paid by each policy?

Choose correct answer/s
A
Sophie's policy will pay $150,000, John's policy will pay $150,000.
B
Sophie's policy will pay $50,000, John's policy will pay $250,000.
C
Sophie's policy will pay $100,000, John's policy will pay $200,000.
D
John's policy will pay the entire amount.
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Question 12
Multiple Choice

Which of the following statements about the medical payments coverage of the PAP is true?

Choose correct answer/s
A
The amount of the benefit typically is $100,000.
B
Covered expenses must be incurred within 30 days of the accident.
C
Covered expenses include the cost of funeral services.
D
The benefit limit applies on a per-accident basis rather than on a per-person basis.
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Question 13
Multiple Choice

Which of the following is a covered person under the medical payments coverage of the PAP?

Choose correct answer/s
A
a family member of the named insured if struck by an auto while crossing the street
B
a pedestrian struck by the named insured's auto
C
the named insured while she is operating her car as a taxi
D
a carjacker who is involved in an accident after stealing the insured's car
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Question 14
Multiple Choice

Tony has an unendorsed Personal Auto Policy which provides medical payments coverage. Under which of the following circumstances would the injured person be eligible for benefits under Tony's policy?
I)A friend in the car is injured while Tony is driving a covered auto.
II)A passenger on a motorcycle driven by Tony is injured when Tony hit another vehicle.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 15
Multiple Choice

In which of the following situations would medical payments be paid under an unendorsed PAP?

Choose correct answer/s
A
injuries incurred while riding a motorcycle
B
injuries incurred while an auto is being used without the presumption that permission would have been granted to use the auto
C
injuries incurred in an auto while it is used in a share-the-expense car pool
D
injuries incurred during the course of employment if workers compensation benefits are available
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Question 16
Multiple Choice

Which of the following statements about the uninsured motorists coverage of the PAP is true?

Choose correct answer/s
A
The coverage usually applies only to property damage.
B
The coverage applies only if the uninsured motorist is legally liable.
C
Unless higher amounts are purchased, the maximum benefit is normally limited to $1,000.
D
A covered person's only recourse is to sue the insurer if there is a disagreement over the amount of damages.
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Question 17
Multiple Choice

Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP?
I)A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses
II)The spouse of a named insured who is killed by an uninsured motorist

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 18
Multiple Choice

All of the following are considered to be uninsured vehicles for purposes of the uninsured motorists coverage of the PAP EXCEPT

Choose correct answer/s
A
a vehicle owned by an individual who is insured, but for less than the amount required by the state's financial responsibility law.
B
a hit-and-run vehicle, the ownership of which cannot be determined.
C
a vehicle owned by an individual who purchased just enough liability insurance to satisfy the state's financial responsibility law.
D
a vehicle insured by a company which becomes insolvent before a claim can be paid.
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Question 19
Multiple Choice

Joyce was injured by an uninsured drunk driver while she was riding in a friend's car. Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000. How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries?

Choose correct answer/s
A
Each policy will pay $35,000.
B
Joyce's policy will pay $50,000, and the friend's policy will pay nothing.
C
Joyce's policy will pay $50,000, and the friend's policy will pay $20,000.
D
The friend's policy will pay $50,000, and Joyce's policy will pay $20,000.
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Question 20
Multiple Choice

All of the following statements about Part D (coverage for damage to your auto) of the PAP are true EXCEPT

Choose correct answer/s
A
Coverage may be purchased with or without collision insurance.
B
Losses are paid regardless of fault.
C
Coverage applies to a nonowned auto occasionally driven by an insured.
D
No coverage is provided for newly-acquired vehicles.
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