Free Claims Adjuster Test Personal and Commercial Auto Questions and Answers — Questions and Answers
Question 1: An auto repair shop has a policy that covers damage to customers' vehicles while they are on the premises for service. A technician test-driving a customer's car collides with another vehicle. Which specific coverage within the shop's policy would respond to the damage to the customer's car?
- Garage Liability Coverage
- Commercial General Liability
- Garagekeepers Coverage (Correct answer)
- Business Auto Coverage
Correct answer: Garagekeepers Coverage
Garagekeepers Coverage is specifically designed to cover damage to customers' vehicles that are in the insured's care, custody, or control for purposes of servicing, repair, or storage. Garage Liability, on the other hand, covers the business's liability for bodily injury or property damage caused by its operations but excludes damage to customers' vehicles in its care.
Question 2: A company's Business Auto Policy declarations page shows Symbol 7 for Liability Coverage. Which of the following statements is true regarding how coverage applies?
- Any auto the company uses, including owned, hired, and non-owned autos, is covered.
- Only autos specifically listed on the policy are covered for liability. (Correct answer)
- All autos owned by the company are automatically covered, including newly acquired ones.
- Only non-owned autos, such as employee vehicles used for business, are covered.
Correct answer: Only autos specifically listed on the policy are covered for liability.
Symbol 7 in a Business Auto Policy provides liability coverage only for the 'specifically described autos' listed on the declarations page. This is a more restrictive form of coverage compared to Symbol 1 ('Any Auto'), and it requires the insured to notify the insurer of newly acquired vehicles to have them covered.
Question 3: In a state with a 'no-fault' auto insurance system, an insured is injured in an accident caused by another driver. How will the insured's medical expenses typically be paid initially?
- By the at-fault driver's Bodily Injury Liability coverage after fault is determined.
- By the insured's own Personal Injury Protection (PIP) coverage, regardless of fault. (Correct answer)
- Through a lawsuit filed against the at-fault driver to recover damages.
- By the insured's Uninsured Motorist coverage.
Correct answer: By the insured's own Personal Injury Protection (PIP) coverage, regardless of fault.
In a no-fault state, each driver's own insurance policy pays for their own medical expenses and lost wages up to a certain limit, regardless of who caused the accident. This is handled through the Personal Injury Protection (PIP) coverage. The ability to sue the at-fault driver is typically restricted unless the injuries meet a certain threshold.
Question 4: Which of the following losses to a covered auto would be paid under a Personal Auto Policy's Part D - Other Than Collision (Comprehensive) coverage?
- The vehicle is damaged when the driver loses control and hits a tree.
- The vehicle's bumper is damaged when another car backs into it in a parking lot.
- The vehicle is damaged by hail during a severe thunderstorm. (Correct answer)
- The vehicle overturns after skidding on an icy patch of road.
Correct answer: The vehicle is damaged by hail during a severe thunderstorm.
Other Than Collision, often called Comprehensive coverage, pays for direct and accidental loss to a covered auto from causes other than collision. Covered perils specifically include things like hail, fire, theft, falling objects, and contact with a bird or animal. Hitting a tree, another car, or overturning are all considered collision losses.
Question 5: An insured driver, who carries Uninsured Motorist (UM) coverage, is injured in an accident caused by a hit-and-run driver. Which of the following is typically true regarding the UM claim?
- The insured must first sue the at-fault driver before the UM coverage will pay.
- UM coverage will pay for the insured's bodily injuries and, in some states, property damage. (Correct answer)
- UM coverage only applies if the at-fault driver is identified but has no insurance.
- The insured's health insurance is always primary and must be exhausted before UM applies.
Correct answer: UM coverage will pay for the insured's bodily injuries and, in some states, property damage.
Uninsured Motorist (UM) coverage is designed to protect the insured for bodily injury (and property damage in some states) when they are injured by a driver who has no insurance or by a hit-and-run driver. In essence, the insured's own policy steps in to pay the damages they are legally entitled to recover from the at-fault, uninsured driver. It covers expenses like medical bills, lost wages, and pain and suffering.
Question 6: All of the following are considered 'supplementary payments' provided under the liability section of a Personal Auto Policy EXCEPT:
- The cost of bail bonds required because of a covered accident.
- Up to $250 for the insured's loss of earnings for assisting in the defense of a claim.
- Premiums on appeal bonds in a suit the insurer defends.
- The cost to repair the insured's vehicle after a collision. (Correct answer)
Correct answer: The cost to repair the insured's vehicle after a collision.
Supplementary payments are additional coverages paid in addition to the policy's liability limits. They include costs like bail bonds, appeal bonds, interest on judgments, and reasonable expenses incurred at the insurer's request, such as loss of earnings. The cost to repair the insured's own vehicle falls under Part D - Coverage for Damage to Your Auto (Collision or Other Than Collision), not under supplementary payments for liability.
Free Claims Adjuster Test Personal and Commercial Auto Questions and Answers
An auto repair shop has a policy that covers damage to customers' vehicles while they are on the premises for service.
A technician test-driving a customer's car collides with another vehicle.
Which specific coverage within the shop's policy would respond to the damage to the customer's car?