CAIA Policy Coverage and Exclusions 4

Question 1

A vehicle sustains flood damage from a hurricane. Which coverage pays for the damage?

Accepted Answer

Comprehensive (other than collision) coverage

Answer

Flood damage is a weather-related peril covered under comprehensive (other than collision) coverage.

Question 2

The 'at-fault' driver has liability limits of $25,000, but the victim's damages total $60,000. The victim has UIM coverage with $50,000 limits. How much can the victim's UIM pay?

Accepted Answer

$35,000 (the gap between actual damages and at-fault limit)

Answer

UIM coverage pays the difference between the at-fault driver's liability payment and the victim's actual damages, up to the UIM policy limit.

Question 3

Which policy condition requires the insured to promptly notify the insurer after an accident?

Accepted Answer

Duties after an accident condition

Answer

The 'duties after an accident or loss' condition obligates the insured to notify the insurer promptly and cooperate in the investigation.

Question 4

An insured rents a car while on vacation. Their PAP includes liability coverage. How does it apply to the rental?

Accepted Answer

PAP liability typically extends to non-owned vehicles used temporarily

Answer

PAP liability coverage extends to non-owned vehicles, such as rentals, used temporarily by the named insured.

Question 5

A vehicle is stolen and recovered two months later with significant interior damage. Which coverage applies to the interior damage?

Accepted Answer

Comprehensive coverage

Answer

Damage occurring as a result of theft or vandalism during the theft is covered under comprehensive coverage.

(CAIA) Certified Automotive Insurance Adjuster Practice Test

(CAIA) Certified Automotive Insurance Adjuster Practice Test

CAIA Policy Coverage and Exclusions 4