EXAMFX - Exam FX Insurance Personal Auto Policy Details Questions and Answers 1 — Questions and Answers
Question 1: An insured has a Personal Auto Policy with liability limits of 25/50/20. They cause an accident resulting in bodily injuries to three people in another car. Person A's injuries total $30,000, Person B's are $15,000, and Person C's are $10,000. The damage to the other car is $18,000. What is the maximum amount the insured's policy will pay for the bodily injury claims?
- $55,000
- $25,000
- $50,000 (Correct answer)
- $70,000
Correct answer: $50,000
The split liability limits of 25/50/20 stand for $25,000 per person for Bodily Injury, $50,000 total per accident for Bodily Injury, and $20,000 per accident for Property Damage. For Person A, the policy pays the per-person limit of $25,000, not the full $30,000. For Person B ($15,000) and Person C ($10,000), the full amounts are paid as they are below the per-person limit. The total paid for bodily injury is $25,000 + $15,000 + $10,000 = $50,000, which equals the per-accident limit.
Question 2: Under Part D (Coverage for Damage to Your Auto) of a standard Personal Auto Policy, which of the following losses would be covered under Other Than Collision (Comprehensive) coverage?
- The insured vehicle strikes a deer that runs across the road. (Correct answer)
- The insured vehicle is damaged when it backs into a light pole.
- The insured vehicle flips over on an icy road.
- The insured vehicle is damaged in a parking lot by another vehicle's door.
Correct answer: The insured vehicle strikes a deer that runs across the road.
Other Than Collision, also known as Comprehensive coverage, pays for direct and accidental loss to the covered auto from perils such as fire, theft, vandalism, hail, and contact with a bird or animal. Striking a deer falls under contact with an animal. The other options are all considered Collision losses.
Question 3: Which of the following is a primary characteristic of Medical Payments coverage (Part B) in a Personal Auto Policy?
- It pays only if the insured is not legally responsible for the accident.
- It has a high standard deductible that must be met first.
- It covers medical expenses for occupants of the other vehicle involved in the accident.
- It covers reasonable medical expenses for the insured and their passengers, regardless of fault. (Correct answer)
Correct answer: It covers reasonable medical expenses for the insured and their passengers, regardless of fault.
Medical Payments coverage (Part B) pays for reasonable and necessary medical and funeral expenses incurred by an insured because of bodily injury caused by an auto accident. A key feature is that it pays without regard to fault. It covers the named insured, family members, and any passengers in the insured's vehicle.
Question 4: An insured with Uninsured Motorists (UM) coverage is seriously injured by a hit-and-run driver while jogging. How will the insured's Personal Auto Policy likely respond to the bodily injury claim?
- The claim will be denied because the insured was not occupying a vehicle.
- The UM coverage will respond because a hit-and-run driver qualifies as uninsured, and the policy covers the insured as a pedestrian. (Correct answer)
- The UM coverage will only pay if the at-fault driver is eventually identified and confirmed to be uninsured.
- The claim will be covered under Medical Payments, but not Uninsured Motorists coverage.
Correct answer: The UM coverage will respond because a hit-and-run driver qualifies as uninsured, and the policy covers the insured as a pedestrian.
Uninsured Motorists (UM) coverage protects the insured for bodily injury caused by a driver with no insurance or by a hit-and-run driver. This coverage applies not only when the insured is in a vehicle but also when they are a pedestrian.
Question 5: The standard territorial limits of a Personal Auto Policy include coverage for accidents that occur in which of the following locations?
- Anywhere in the world.
- The United States and Mexico only.
- The United States, its territories and possessions, Puerto Rico, and Canada. (Correct answer)
- North America, including the United States, Canada, and Mexico.
Correct answer: The United States, its territories and possessions, Puerto Rico, and Canada.
The policy territory for a standard Personal Auto Policy is defined as the United States of America, its territories or possessions, Puerto Rico, and Canada. Coverage in Mexico is typically excluded and requires a separate endorsement or policy.
Question 6: According to Part E - Duties After an Accident or Loss in a Personal Auto Policy, which of the following is a required duty of an insured?
- Promptly notify the insurance company of the accident. (Correct answer)
- Admit fault if they believe they caused the accident to speed up the process.
- Arrange for and authorize all vehicle repairs immediately.
- Negotiate a settlement directly with the other party for minor damages.
Correct answer: Promptly notify the insurance company of the accident.
Part E of the Personal Auto Policy outlines the insured's duties following a loss. One of the primary duties is to provide prompt notification to the insurer about the time, place, and details of the loss. The policy specifically advises against admitting fault, as this can prejudice the insurer's right to defend a claim.
EXAMFX - Exam FX Insurance Personal Auto Policy Details Questions and Answers 1
An insured has a Personal Auto Policy with liability limits of 25/50/20.
They cause an accident resulting in bodily injuries to three people in another car.
Person A's injuries total $30,000, Person B's are $15,000, and Person C's are $10,000.
The damage to the other car is $18,000.
What is the maximum amount the insured's policy will pay for the bodily injury claims?