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

Flood damage is actually covered under OTC/comprehensive coverage, not excluded — this is a common misconception; OTC excludes losses caused by collision.

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

The majority of states mandate that insurers offer UM coverage, but allow policyholders to reject it through a signed written waiver.

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

The 'other insurance' clause coordinates benefits among multiple applicable policies to prevent the insured from collecting more than the actual loss.

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

A 'per occurrence' deductible applies separately to each distinct loss event, so two separate collisions each trigger their own deductible.

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

Under the PAP, resident family members are automatically covered as insureds for liability, whereas permissive use, unauthorized use, and commercial exclusions may apply in other scenarios.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA Insurance Policy and Regulations 2