Chapter 22 Auto Insurance

Chapter 22 Auto Insurance - Chapter22AutoInsurance 1) Which...

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Chapter 22   Auto Insurance 1) Which of the following statements about the liability limits of the PAP is (are) true? I. The policy is written with split limits of liability. II. Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability. A) I only B) II only C) both I and II D) neither I nor II Answer: C Question Status: Revised 2) Which of the following statements about the payment of defense costs by the PAP is (are) true? I. They are paid in addition to the policy limits. II. They are payable even after the limit of liability is exhausted. A) I only B) II only C) both I and II D) neither I nor II Answer: A Question Status: Previous Edition 3) All of the following are covered autos under the liability section of the PAP EXCEPT A) a nonowned van which is driven by the insured on a regular basis. B) a trailer owned by the named insured. C) a borrowed auto used by the insured as a substitute for a stolen covered auto. D) a newly acquired auto which replaces a vehicle previously described in the policy. Answer: A Question Status: Previous Edition 262 Rejda · Principles of Risk Management and Insurance , Tenth Edition 4) All of the following are insured persons under the liability coverage of the PAP EXCEPT A) a friend to whom the named insured loans a covered auto. B) the employer of the named insured for actions resulting from the named insured ʹ s use of a covered auto. C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized. D) a relative of the named insured if a member of the same household. Answer: C Question Status: Previous Edition 5) Which of the following persons is (are) covered for liability insurance under the PAP? I. A family member who drives a covered auto. II. A family member who occasionally drives a friend ʹ s auto. A) I only B) II only C) both I and II D) neither I nor II Answer: C Question Status: Previous Edition 6) All of the following are covered as supplementary payments under the liability section of the PAP EXCEPT A) the cost of an appeal bond in a lawsuit. B) the cost of a bail bond for a traffic violation when no accident is involved. C) interest which accrues on a liability judgment covered by the policy. D) reasonable expenses incurred by the insured to testify at a trial involving a lawsuit covered by the policy. Answer: B Question Status: Previous Edition 7) Which of the following situations would be covered by the liability section of an unendorsed PAP if the insured is legally liable? A) The insured injures a pedestrian while operating a friend ʹ s new motorcycle. B) The insured backs into and damages the garage door of his rented house.
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C) A friend ʹ s suitcase and laptop computer were damaged in an auto accident while the insured and the friend were vacationing together. D) The insured damages a parked car while driving a dump truck for his or her employer.
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Chapter 22 Auto Insurance - Chapter22AutoInsurance 1) Which...

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