Claims Adjuster Test Personal and Commercial Auto Questions and Answers — Questions and Answers
Question 1: In a standard Business Auto Policy (BAP), which coverage symbol provides the broadest liability protection by applying to 'any auto'?
- Symbol 7 (Specifically Described Autos)
- Symbol 2 (Owned Autos Only)
- Symbol 1 (Any Auto) (Correct answer)
- Symbol 8 (Hired Autos Only)
Correct answer: Symbol 1 (Any Auto)
Symbol 1 provides the broadest liability coverage under a Business Auto Policy. It covers any auto used by the insured, including owned, hired, non-owned, and newly acquired vehicles, without needing to schedule them on the policy.
Question 2: An insured's car is covered by a standard Personal Auto Policy with both Collision and Other Than Collision coverage. While parked on a rural road, the vehicle is significantly damaged when a large deer runs into its side. Which coverage will pay for the repairs?
- Collision Coverage
- Property Damage Liability
- Other Than Collision Coverage (Correct answer)
- Uninsured Motorist Property Damage
Correct answer: Other Than Collision Coverage
Other Than Collision, often called Comprehensive coverage, pays for direct and accidental loss to the covered auto from perils other than collision. This specifically includes loss caused by contact with a bird or animal. Collision coverage would apply if the driver swerved to miss the deer and hit another object, like a tree or fence.
Question 3: A Personal Auto Policy's Medical Payments coverage (Part B) is designed to cover reasonable and necessary expenses for an insured after an accident. Which of the following would NOT be covered by this part of the policy?
- Ambulance fees to transport the insured to the hospital.
- Dental procedures required due to injuries from the accident.
- Funeral expenses for a passenger.
- Lost wages while the insured is unable to work. (Correct answer)
Correct answer: Lost wages while the insured is unable to work.
Medical Payments coverage pays for medical and funeral expenses incurred by an insured, family members, or passengers. It does not cover non-medical economic losses such as lost wages. Lost wages may be covered under Personal Injury Protection (PIP) in no-fault states or could be part of a liability claim against an at-fault party.
Question 4: An employee uses their personal vehicle to make a bank deposit for their employer. During the trip, the employee negligently causes an accident, injuring another driver. The employee has a personal auto policy, and the employer has a Business Auto Policy with Hired and Non-Owned Auto liability coverage. How will the policies respond to the third-party injury claim?
- The employer's policy is primary because the accident occurred during business operations.
- The employee's personal auto policy is primary, and the employer's policy is excess. (Correct answer)
- Both policies will share the loss on a pro-rata basis.
- Only the employer's policy will respond as it was a work-related errand.
Correct answer: The employee's personal auto policy is primary, and the employer's policy is excess.
In a non-owned auto situation, the insurance on the vehicle is primary. Therefore, the employee's personal auto policy will respond first to cover the liability. The employer's Non-Owned Auto liability coverage serves as excess coverage, only paying after the limits of the employee's primary policy have been exhausted.
Question 5: A Personal Auto Policy has split liability limits of 25/50/10. In a single at-fault accident, the insured causes $8,000 of damage to one person's car and $4,000 of damage to another person's car. What is the maximum amount the insured's policy will pay for the total property damage?
- $10,000 (Correct answer)
- $25,000
- $50,000
- $12,000
Correct answer: $10,000
In split liability limits written as X/Y/Z, the third number represents the maximum coverage for total property damage per accident. In this case, the limit is $10,000. Since the total damage is $12,000 ($8,000 + $4,000), the policy will pay up to its limit of $10,000, leaving the insured responsible for the remaining $2,000.
Question 6: A customer's vehicle is damaged by a fire that starts overnight inside a mechanic's service garage. The garage has a policy that includes both Garage Liability and Garagekeepers coverage. Which coverage is designed to respond to the damage to the customer's vehicle?
- Garage Liability Coverage
- Commercial Property Coverage
- Garagekeepers Coverage (Correct answer)
- Completed Operations Liability
Correct answer: Garagekeepers Coverage
Garagekeepers Coverage is specifically designed to cover damage to customers' vehicles that are in the care, custody, or control of the insured business. Garage Liability, by contrast, covers the business's liability for bodily injury or property damage caused by its operations, not damage to customers' property being held for service.
Claims Adjuster Test Personal and Commercial Auto Questions and Answers
In a standard Business Auto Policy (BAP), which coverage symbol provides the broadest liability protection by applying to 'any auto'?