Insurance MCQ

A commercial auto coverage form that is designed for insureds engaged in the business of transporting goods for others is a A: Garagekeepres coverage form B: Cargo carries form C: Truckers coverage form D: Commercial carrier form Answer: Truckers coverage form

To preform work on a customer's car, a mechanic in an auto shop had to put the vehicle on a service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form, which of the following statements is true? A: Coverage is provided for all perils B: Coverage is provided for the bodily injuries to the mechanic C: No coverage is applicable D: Coverage is provided for the car an hoist only Answer: No coverage is applicable

An insured's auto strikes a deer, causing the insured to lose control of the car and run into a tree. The total damage to the auto is $6,000 dollars. How will this loss be covered? A: $3,000 would be paid under the other-than-collision; $3,000 would be paid under collision coverage B: $6,000 would be paid under collision coverage C: This would not be a covered loss D: $6,000 would be paid under other-than-collision coverage Answer: $6,000 would be paid under the other-than-collision coverage

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT A: Physical damage B: Uninsured motorist C: No-fault medical payments D: Liability Answer: Physical damage

Why don't commercial auto coverage forms automatically include medical payment coverage? A: The business that owns the vehicles must be self-insured for medical payment coverage B: Commercial auto coverage is for damage to vehicles C: Any person occupying a commercial vehicle must have a personal auto policy to cover any medical payments that result from an accident D: Often any person occupying a commercial vehicle would be covered under a workers compensation policy Answer: Often any person occupying a commercial vehicle would be covered under a workers compensation policy.

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? A: Individual named insured B: Drive Other Car C: Additional insured-Lessor D: Hired Auto Specified as Covered Autos You Own Answer: Individual named insured

Surely Insurance Co decides to cancel Mandy's insurance policy for obtaining insurance through fraudulent misrepresentation. The effective date of cancellation is May 1. Mandy receives her notice in the mail on May 12. Which of the following is true? A: Mandy's policy is canceled B: The cancellation takes effect on May 22 C: Mandy has been driving without insurance D: The cancellation is considered invalid Answer: The cancellation is considered invalid

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? 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. Answer: D

John has an auto which is covered for collision losses subject to a $250 deductible. Kate's auto also has collision coverage but her deductible is $500. Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs? A) John's policy will pay $1,500, and Kate's policy will pay nothing. B) John's policy will pay $1,750, and Kate's policy will pay nothing. C) Kate's policy will pay $1,750, and John's policy will pay nothing. D) Kate's policy will pay $1,500, and John's policy will pay $250. Answer: D

Sarah purchased a Personal Auto Policy with liability limits of 50/100/25. Sarah ran a stop sign and hit a van. The van sustained $15,000 in damages. The following bodily injuries were suffered by passengers in the van: Passenger #1, $15,000; Passenger #2, $60,000; and Passenger #3, $10,000. Sarah sustained $5,000 in medical expenses, and Sarah's car sustained $10,000 in damages. How much will Sarah's insurer pay under Part A: Liability Coverage? A) $90,000 B) $100,000 C) $115,000 D) $125,000 Answer: A

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? 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. Answer: C