Review of the Personal Auto Policy (FINAL EXAM) Copy

In many states a vehicle cannot be licensed until proof of ____________ is established.

This concept states that when the number of similar and independent exposure units increases, the relative occurrence of predictions about future outcomes also increases.

To ____________ is to restore a person who has suffered a loss to the same financial position that would have existed had there not been a loss.

Which of the following is a benefit provided by insurance?

Since most states require drivers to show Proof of Financial Responsibility in order to drive, having insurance serves as a _____________.

Which of the following is NOT a type of legal wrong?

Negligence is classified as a(n) ______________ tort.

Since most insurers believe that one cannot transfer an intentional or negligent act to a third part, most auto policies do not cover which type of damage?

This is an intentional tort against someone’s right to enjoy their personal property.

Which of the following is NOT an element to establish negligence?

The theory of ________________ states that if each party is partly negligent, each party must bear its own share of the damage or injury.

The explosion of the ____________ has changed the way that drivers learn about and buy auto insurance.

Which of the following is an element of a valid contract?

The fact that an insurance contract is dependent upon an uncertain event means it is a(n) __________________.

Only one part to an insurance contract makes an enforceable promise, meaning that an insurance contract is a(n)_____________.

This supports that the purpose of obtaining insurance is so the policyholder can be returned to a pre-loss condition.

These statutes modify the level of care that a driver owes a passenger in their automobile.

This establishes that a parent can be held liable for damages caused by their minor child.

_______________ laws set limits of liability which each person who has been involved in an auto accident causing property damage or bodily harm must meet.

Many states require insured’s to have _______________ coverage which will pay damages caused by a driver that flees the scene of an accident.

If a jurisdiction has this type of no-fault system, the victim of a serious loss such as death or disablement would be allowed to sue for the actual damages, as well as for any punitive damages allowed.

Most no-fault plans do not cover ____________ since these claims are more easily determined by dollar amount, and there is usually non pain and suffering.

Auto insurance is designed to do which of the following?

The rates obtained through a specialty insurance company would be considerably _____________ those obtained through a standard automobile insurer.

In a no-fault state, if an applicant for auto insurance has been rejected by two or more auto insurers, their application will be submitted to the ____________________.

Under these plans, the premiums, expenses and losses of the substandard insureds are pooled and shared by all of the participating insurers within a state.

Consumers have historically objected to ______________ in auto insurance policies because they were not familiar with the technical terms that were used.

The _______________ introduced a new and simplified auto policy that is much more consumer friendly.

Under this coverage of the Personal Automobile Policy, an insured does not have to be found negligent in order for hospital bills or surgical procedures to be covered.

This section of the Personal Automobile Policy identifies the policy number, the name and address of the insured, and the date and time that coverage beings.

At what time does coverage being on the inception date of a Personal Automobile Policy?

This section of the Personal Automobile Policy states that services will be performed by the insurer, as shown in the policy, in return for payment of premiums.

Which of the following does NOT fall under the term “bodily injury” as defined in the Personal Automobile Policy?

The cost to repair a vehicle has dramatically risen in recent years due to _____________.

Which of the following would NOT be an example of Property Damage as defined in the Personal Automobile Policy?

Which of the following would be an example of “Occupying” a vehicle as defined in the Personal Automobile Policy?

A(n) ____________ would NOT qualify for coverage under a Personal Automobile Policy.

An insured has how many days to notify the insurer if additional coverage is required for an automobile that will replace a covered automobile on the policy?

Under Part A – Liability Coverage of the PAP, the insured reserves the right to settle or defend any suit of claim as they deem appropriate, including ____________ incurred by the insured.

Who of the following is NOT defined as an insured under Part A – Liability of the Personal Automobile Policy?

Part A – Liability Coverage of the PAP would apply to all of the following EXCEPT:

If an insurer requires that the insured attend trial, the policy will pay a stipulated amount to the insured for ______________ under Supplementary Payments of Part A – Liability of the PAP.

How would coverage apply under Part A -Liability of the PAP for property damage intentionally caused by the insured?

In which of the following situations would Part B – Medical Payments Coverage of the Personal Automobile Policy apply?

Which of the following is NOT a classification of hazards?

Part B – Medical Payments Coverage of the PAP will provide coverage for expenses incurred as the result of an accident within _____________ following the accident.

In which of the following situations would coverage under Part B – Medical Payments Coverage of the PAP NOT apply?

Under Part B – Medical Payment Coverages of the Personal Automobile Policy, medical payment benefits are ____________ when an insured is injured while occupying a non-owned automobile.

Part C – Uninsured Motorist Coverage of the Personal Automobile Policy will cover injury or damage caused by which of the following?

Under Part C – Uninsured Motorist Coverage of the PAP, an insurer will pay ___________ damages that an insured is legally entitled to recover from the owner or operator of an uninsured vehicle due to bodily injury.

Although it goes against a fundamental rule in automobile insurance, some states allow an option to ____________ benefits in conjunction with Uninsured Motorists Coverage, and this can be automatic unless waived by the insured.

If an insured does not agree on whether a person is entitled to receive damages, or disagrees on the amount of the damages, they can submit a written request for ____________ to the insurance company, as outlined in Part C – Uninsured Motorist Coverage of the PAP.

A payment made to an insured by the insurance company under Part D – Coverage for Damage to Your Automobile of the PAP will be reduced by _____________.

Under Part D – Coverage for Damage to your Automobile, if an insured is involved in a loss to a vehicle considered “Non-Owned”, what type of coverage would apply?

In an unendorsed Personal Automobile Policy, Under Part D – Coverage for Damage to Your Automobile, if Other Than Collision coverage is elected, transportation expenses are covered ONLY for a loss due to ________________.

A(n)______________ is a condition or situation that presents the possibility of a loss.

Which of the following could be paid for a loss under Part D – Coverage for Damage to Your Automobile in the PAP?

Under Part D – Coverage for Damage to Your Automobile of the Personal Automobile Policy, the insurance company reserves the right to ____________ the damaged property before it is disposed of or repaired.

During the policy period, the policy provisions in a Personal Automobile Policy cannot be waived or changed except by _______________ issued by the insurer.

As a general provision of the Personal Automobile Policy, if an insured declares bankruptcy or becomes insolvent, the insurance company ________________ relieved of any and all obligations under the policy.

The general provision of the PAP that outlines the insurance company’s right to recover some or all of the amount they pay out on a claim from the responsible party is often referred to as what?

An insurance company is allowed to cancel a policy in the middle of the policy period for which of the following reasons.

Bob has a Personal Automobile Policy and passes away. His wife Anne does not have a driver’s license. His adult daughter Emily lives out of the country. His Son Max is in high school and lives at home. Who would become the insured under Bob’s PAP?

In which case would a General Endorsement be added to a Personal Automobile Policy?

The Extended Transportation Expenses Endorsement extends provisions to allow a maximum stated amount to rent a substitute vehicle if the covered automobile cannot be used for more than _____________ because of a covered loss under the PAP.

The addition of which endorsement to the Personal Automobile Policy would provide liability coverage in a vehicle hired or used as a taxi or livery conveyance?

This type of Loss Exposure consists of buildings, equipment, automobiles, or merchandise.

Which endorsement would need to be added to a PAP to provide coverage for a golf cart?

The factors that determine what an insured will pay for automobile insurance are _____________ and rating.

Applications for auto insurance include a question to determine where the vehicle will be ____________.

If allowed by state regulation, an automobile insurance company will take data from an applicant’s ______________ to create a proprietary score in order to determine the applicant’s risk.

When reviewing rates set by insurance companies, regulators require that the rates be:

An auto insurance company that accepts sub-standard risks would have a loss ratio _____________ a company that only accepts standard risks.

In which type of technique of managing loss exposures does the individual assume the entire financial impact of a loss?

The greatest benefits of insurance are that it provides payments for losses and that it ______________.