EXAMFX Personal Auto Policy Details 3 — Questions and Answers
Question 1: Under a PAP, which of the following is TRUE about Uninsured Motorist (UM) coverage?
- It covers property damage only
- It applies only when the insured is a pedestrian
- It covers bodily injury caused by a driver with no insurance (Correct answer)
- It replaces liability coverage when the insured is at fault
Correct answer: It covers bodily injury caused by a driver with no insurance
UM coverage protects the insured for bodily injury damages caused by a driver who has no liability insurance.
Question 2: A PAP policyholder's 19-year-old child moves out and lives in a separate apartment. Is the child still covered under the parent's PAP?
- Yes, children are always covered regardless of residency
- No, coverage ends when a child leaves the household (Correct answer)
- Yes, if the child is a full-time student
- No, unless the child pays a separate premium
Correct answer: No, coverage ends when a child leaves the household
PAP family member coverage requires the person to be a resident of the named insured's household; a child living independently is no longer a covered family member.
Question 3: Under the PAP Liability section, which duty is the insured required to perform after an accident?
- Admit fault to settle quickly
- Cooperate with the insurer in its investigation (Correct answer)
- Hire an independent appraiser immediately
- File a claim within 24 hours
Correct answer: Cooperate with the insurer in its investigation
The Conditions section of the PAP requires the insured to cooperate with the insurer's investigation, settlement, and defense of claims.
Question 4: Which PAP coverage pays for the insured's injuries regardless of who was at fault in the accident?
- Liability
- Uninsured Motorist Bodily Injury
- Medical Payments (Correct answer)
- Underinsured Motorist
Correct answer: Medical Payments
Medical Payments coverage is no-fault, paying the insured's and passengers' reasonable medical expenses regardless of who caused the accident.
Question 5: A PAP policyholder rents a car while on vacation. Which part of their PAP may extend to cover the rental vehicle?
- Part A – Liability only, not physical damage
- Parts A and B extend automatically; Parts C and D do not
- Parts A, B, C, and D may all extend to a temporary substitute vehicle (Correct answer)
- Rental cars are always excluded from a PAP
Correct answer: Parts A, B, C, and D may all extend to a temporary substitute vehicle
All four PAP coverage parts can extend to a non-owned vehicle used as a temporary substitute, including a rental car.
Question 6: The PAP's 'other-than-collision' (comprehensive) list of covered perils includes all of the following EXCEPT:
- Theft
- Earthquake
- Contact with an animal
- Sliding off an icy road into a ditch (Correct answer)
Correct answer: Sliding off an icy road into a ditch
Sliding off the road into a ditch is classified as a collision loss, not a comprehensive/OTC loss.
Question 7: Under the PAP, 'underinsured motorist' (UIM) coverage is triggered when:
- The at-fault driver has no insurance at all
- The at-fault driver's liability limits are lower than the insured's damages (Correct answer)
- The insured's own liability limits are exhausted
- The insured is driving an underinsured vehicle
Correct answer: The at-fault driver's liability limits are lower than the insured's damages
UIM coverage applies when the at-fault driver has insurance but their limits are insufficient to cover the insured's full damages.
EXAMFX Personal Auto Policy Details 3
Under a PAP, which of the following is TRUE about Uninsured Motorist (UM) coverage?