CAIA - Certified Automotive Insurance Adjuster Policy Coverage and Exclusions Questions and Answers

Question 1

An insured's personal auto policy explicitly includes a Named Driver Exclusion for their teenage son who has a poor driving record.
If the son takes the insured vehicle without permission and causes an accident resulting in property damage, how will the insurer most likely respond to the claim?

Accepted Answer

Deny the claim entirely based on the named driver exclusion.

Answer

Cover the claim under the policy's permissive use clause.

Answer

Cover the claim but apply a higher deductible.

Answer

Provide state minimum liability coverage only.

Question 2

A policyholder uses their personal sedan, insured under a standard Personal Auto Policy (PAP), to deliver pizzas for a local restaurant as a part-time job. They are involved in a collision while en route to a customer's house. Which policy exclusion is most likely to be cited by the insurer to deny coverage?

Accepted Answer

Public or Livery Conveyance / Business Use Exclusion

Answer

Intentional Acts Exclusion

Answer

Non-Owned Auto Exclusion

Answer

Racing and Speed Contest Exclusion

Question 3

Which of the following scenarios would typically be covered under a standard Personal Auto Policy's Bodily Injury Liability coverage?

Accepted Answer

A passenger in another vehicle is injured in an accident for which the insured driver is at fault.

Answer

The insured driver intentionally causes an accident out of road rage, injuring another driver.

Answer

The insured's employee is injured while operating the insured's vehicle for business purposes.

Answer

The insured driver sustains injuries while participating in a prearranged street race.

Question 4

An insured's vehicle is stolen from their driveway. The thief gets into an accident, causing damage to the vehicle and injuring a pedestrian. Under the insured's policy with both Comprehensive and Liability coverage, which part of the loss will likely be excluded from their policy?

Accepted Answer

The value of personal tools stolen from within the vehicle.

Answer

The cost to repair the stolen vehicle.

Answer

The medical bills of the injured pedestrian.

Answer

The cost of a rental car for the insured.

Question 5

A driver with a standard auto policy is involved in an accident. The investigation reveals the driver was using their vehicle in a pre-arranged speed contest at the time of the loss. How does this activity affect coverage?

Accepted Answer

The claim will be denied due to a specific policy exclusion.

Answer

Coverage is fully provided as it was an accident.

Answer

A double deductible will be applied to the collision claim.

Answer

Only liability coverage will be provided.

Question 6

Which of the following losses is typically excluded from coverage under the Physical Damage (Collision and Comprehensive) section of a personal auto policy?

Accepted Answer

Damage from normal wear and tear and mechanical breakdown.

Answer

Damage from hitting a deer.

Answer

Damage due to flooding during a hurricane.

Answer

Damage resulting from the vehicle being stolen and vandalized.