CAIA Policy Coverage and Exclusions 2

Question 1

A claimant drives a borrowed vehicle and causes an accident. Under most personal auto policies, which coverage applies FIRST?

Accepted Answer

The vehicle owner's policy as primary

Answer

The vehicle owner's policy is primary coverage; the borrower's policy acts as excess if the owner's limits are exhausted.

Question 2

Which of the following losses is typically EXCLUDED under a standard comprehensive auto coverage?

Accepted Answer

Mechanical breakdown of the engine

Answer

Mechanical or electrical breakdown is a maintenance issue excluded from comprehensive coverage, which covers sudden external perils.

Question 3

An insured intentionally rams another car during a road rage incident. How does the policy respond to the damage claim?

Accepted Answer

The intentional act exclusion bars all coverage

Answer

Intentional acts exclusions in auto policies bar coverage when the insured deliberately causes damage.

Question 4

Under a Personal Auto Policy (PAP), which statement about the 'named insured' is correct?

Accepted Answer

The named insured and spouse residing in the household

Answer

The PAP defines 'named insured' as the person shown in declarations and, if a resident, their spouse.

Question 5

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?

Accepted Answer

The vehicle was used for business purposes excluded under the PAP

Answer

PAPs typically exclude coverage when the vehicle is used to carry persons or property for a fee, including regular delivery work.

(CAIA) Certified Automotive Insurance Adjuster Practice Test

(CAIA) Certified Automotive Insurance Adjuster Practice Test

CAIA Policy Coverage and Exclusions 2