Insurance MCQ

Personal injury protection (PIP) is a form of no-fault auto insurance. All of the following characteristics of PIP are correct EXCEPT: A) pain and suffering are not covered. B) it provides third-party coverage. C) it provides first-party coverage. D) it covers bodily injury from any occurrence without regard to fault. Answer: it provides third-party coverage.

The law that provides that each party must accept responsibility for his own losses and must recover losses from his own insurer is the: Answer: no-fault law.

What type of endorsement would be used to insure a recreational vehicle under the personal auto policy? Answer: Miscellaneous type vehicle endorsement

Mary was involved in an accident with another driver. The car was damaged. Her insurance company reimburses her for the damage and seeks recovery from the negligent driver. What is this process called? Answer: Subrogation

Mary was involved in an accident with a hit-and-run driver. The car was damaged. Mary is required to do what? A) calling the police. B) permitting the insurer to inspect the damaged car. C) protecting the car against further damage.

Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company? Answer: No, a written endorsement by the insurer is the only way to change the policy.

The Personal Auto Policy (PAP) has territorial limits that include: A) Montreal, Canada and Puerto Rico. B) London, England. C) Mexico City, Mexico. D) Western Europe Answer: Montreal, Canada and Puerto Rico.

An auto policy would provide coverage for an auto driven in all of the following places EXCEPT: A) Alberta, Canada. B) Paducah, Kentucky. C) Honolulu, Hawaii. D) Mexico City, Mexico. Answer: Mexico City, Mexico.

In which of the following areas would PAP coverage typically NOT extend? A) Hawaii. B) Mexico. C) Puerto Rico. D) Canada. Answer: Mexico

An insured rents a car while on vacation in Canada and causes an accident. What coverage is provided for this loss under the personal auto policy? Answer: The loss is covered under an unendorsed policy.

The personal auto policy coverage applies to losses, accidents, or occurrences that take place during the policy period in all the following locations EXCEPT: A) San Juan, Puerto Rico. B) Phillipsburg, St. Martin. C) Alberta, Canada. D) Dover, Delaware. Answer: Phillipsburg, St. Martin

Mr. Jones has an auto policy with Coverage A limits of 15/30/10. He also has a $250 deductible for collisions. He runs a red light at an intersection and collides with Mrs. James' car. Mrs. James is awarded $30,000 for her injuries and $6,000 for the damage to her car. Mr. Jones' car sustains $750 in damage. How much will Mr. Jones' policy pay for this incident? Answer: $21,500.00

Physical damage losses under the personal auto policy are reimbursed on what basis? Answer: Actual cash value or cost to repair or replace, whichever is less.

All of the following are excluded under collision or other than collision coverages EXCEPT: A) road damage to tires. B) damage to awnings, cabanas, or other equipment. C) flood damage. D) damage due to wear and tear. Answer: flood damages

Which of the following damages is covered Under Part D-Coverage for Damage to the Insured's Auto? A) Flood. B) Wear and tear. C) Freezing. D) Mechanical breakdown not resulting from total theft. Answer: flood

Craig was driving his family in his owned station wagon on vacation in Wisconsin when a deer ran out in the road and collided with the front end of the wagon. Craig had the car towed to the nearest town, where the only car repair shop told him that it would take at least a week to get the parts to repair the engine. Craig's automobile policy provides coverage for transportation expenses. All of the following statements about transportation expenses are correct EXCEPT: A) the maximum coverage is $600. B) coverage starts 48 hours after a car is damaged by an other than collision loss. C) there is a $20 per-day limit for expenses. D) no deductible applies. Answer: Coverage starts 48 hours after a car is damaged by an other than collision loss.

How much will the personal auto policy pay for a rental car if the insured vehicle is stolen? Answer: $20 per day, up to $600 maximum.

Mary was involved in an accident with a hit-and-run driver. Her car was damaged. Which of the following items would be covered under the collision coverage in the personal auto policy? A) Mary's luggage in the trunk is destroyed. B) The front windshield is shattered. C) The vehicle is stolen before the tow truck can tow it to the body shop. D) The vehicle is towed to the body shop. Answer: B) The front windshield is shattered.

The commercial auto policy offers physical damage coverage. One of the coverages is comprehensive. All of the following causes of loss are specifically covered under comprehensive EXCEPT: A) flood. B) earthquake. C) theft. D) freezing. Answer: freezing

Depending on the circumstances, a passenger injured in an automobile accident may be able to recover under all of the following coverages EXCEPT: A) uninsured motorist. B) collision. C) liability. D) medical payments. Answer: collision