CALA Insurance Policy and Regulations 2

Question 1

Under a standard personal auto policy, what does the 'other than collision' (OTC) coverage typically exclude?

Accepted Answer

Flood damage

Answer

Theft of the vehicle

Answer

Collision with an animal

Answer

Vandalism

Question 2

Which state regulation requires insurers to offer uninsured motorist (UM) coverage to all personal auto policyholders?

Accepted Answer

Most states require UM to be offered, though policyholders may reject it in writing

Answer

Only no-fault states require UM coverage

Answer

UM coverage is entirely optional with no state mandate

Answer

Federal law uniformly requires UM coverage in all states

Question 3

What is the purpose of an 'other insurance' clause in an auto liability policy?

Accepted Answer

To coordinate benefits and prevent duplicate recovery when multiple policies apply

Answer

To void coverage when another policy exists

Answer

To require the insured to exhaust other coverage first

Answer

To limit the insurer's total payout to the policy premium paid

Question 4

A CALA adjuster reviews a policy with a '$500 deductible per occurrence' for collision coverage. The insured has two separate collisions in the same policy period. How many deductibles apply?

Accepted Answer

Two deductibles — one per occurrence

Answer

One deductible for the entire policy period

Answer

No deductible if the insured has a clean record

Answer

The deductible only applies to the larger of the two losses

Question 5

Under the PAP (Personal Auto Policy), which of the following persons is typically considered an 'insured' for liability coverage?

Accepted Answer

A family member residing in the household

Answer

A neighbor who borrows the vehicle without permission

Answer

A mechanic test-driving the vehicle for repairs

Answer

A person using the vehicle for commercial delivery

Question 6

What is the primary purpose of a 'named driver exclusion' endorsement on an auto policy?

Accepted Answer

To remove a specific high-risk driver from coverage while keeping the policy in force

Answer

To exclude coverage for the vehicle itself

Answer

To increase the premium for all listed drivers

Answer

To limit liability coverage to the policy minimum

Question 7

Which of the following best describes 'subrogation' as it applies to auto insurance claims?

Accepted Answer

The insurer's right to recover paid claim amounts from a liable third party

Answer

The insured's right to sue their own insurer for bad faith

Answer

The process of canceling a policy after a major loss

Answer

A method of splitting liability between two insurers