Policy Coverage and Exclusions Flashcards
7 cards from real CAIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Policy Coverage and Exclusions flashcards as text
A claimant drives a borrowed vehicle and causes an accident. Under most personal auto policies, which coverage applies FIRST?
Answer: The vehicle owner's policy as primary
The vehicle owner's policy is primary coverage; the borrower's policy acts as excess if the owner's limits are exhausted.
Which of the following losses is typically EXCLUDED under a standard comprehensive auto coverage?
Answer: Mechanical breakdown of the engine
Mechanical or electrical breakdown is a maintenance issue excluded from comprehensive coverage, which covers sudden external perils.
An insured intentionally rams another car during a road rage incident. How does the policy respond to the damage claim?
Answer: The intentional act exclusion bars all coverage
Intentional acts exclusions in auto policies bar coverage when the insured deliberately causes damage.
Under a Personal Auto Policy (PAP), which statement about the 'named insured' is correct?
Answer: The named insured and spouse residing in the household
The PAP defines 'named insured' as the person shown in declarations and, if a resident, their spouse.
A delivery driver uses a personal auto policy vehicle for commercial pizza delivery. The insurer denies a collision claim. What is the most likely basis?
Answer: The vehicle was used for business purposes excluded under the PAP
PAPs typically exclude coverage when the vehicle is used to carry persons or property for a fee, including regular delivery work.
What does the 'other than collision' coverage in an auto policy cover?
Answer: Losses from fire, theft, vandalism, and weather events
'Other than collision' (comprehensive) covers perils like fire, theft, weather, falling objects, and vandalism.
An insured's vehicle is damaged when an uninsured driver runs a red light. Which PAP coverage provides direct payment to the insured for their vehicle damage?
Answer: Uninsured Motorist Property Damage (UMPD)
UMPD reimburses the insured for vehicle damage caused by an at-fault uninsured driver where available by state.