Download State Farm P/C Exam Prep: Property & Casualty Insurance Q&A and more Exams Insurance Economics in PDF only on Docsity!
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Financial responsibility law - correct answer ✅Every state requires that each person be able to prove he is financially prepared if involved in an accident. Suppose your state requires minimum liability limits of 25/50/10. What is the name of that law? The loss is covered under an unendorsed policy. - correct answer ✅An insured rents a car while on vacation in Canada and causes an accident. What coverage is provided for this loss under the personal auto policy? Collision - correct answer ✅While backing her car into a parking space on a neighborhood street, Melanie struck a fire hydrant with her bumper. Which coverage under Melanie's personal auto policy (PAP) will cover the damage to the bumper? Part A. - correct answer ✅While driving to work, Leonard is eating his breakfast, reviewing his appointment book, and talking on his cell phone. He runs a red light and collides with a commuter van. The
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van's occupants are hospitalized. Which part of Leonard's personal auto policy covers the occupants' injuries and damage to the van? the occupant of the car struck by the insured - correct answer ✅The insured rearends another vehicle that is stopped at a red light. The driver of the car struck by the insured is badly injured. The insured, his daughter and her friend were in the car and were also injured. Part B of the insured's personal auto policy will pay medical expenses for all of the following EXCEPT: $10,000 - correct answer ✅The insured has an auto policy with liability limits of 30/60/10. He negligently runs off the road and causes $70, damage to an apartment building. How much will the policy pay for the damage to the building? No property can be denied coverage by a FAIR Plan. - correct answer ✅Which of the following statements about the FAIR Plan is NOT correct?
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Silo - correct answer ✅Which of the following property may be insured under a flood policy issued by the NFIP? Vicarious liability. - correct answer ✅Which one of the following principles is used to describe liability resulting from the negligence of a person who uses an auto with the insured's permission? Funeral expenses for the insured - correct answer ✅Which one of the following would NOT be paid as supplementary payments under Part A of a personal auto policy? it provides thirdparty coverage. - correct answer ✅Personal injury protection (PIP) is a form of nofault auto insurance. All of the following characteristics of PIP are correct EXCEPT: Protection and indemnity insurance. - correct answer ✅Yacht policies provide physical damages and liability coverage. What is the liability section called?
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The driver's automobile policy under the property damage liability provisions. - correct answer ✅While driving down the street, an insured swerves to avoid a pedestrian, goes over a curb, and damages a neighbor's fence. Which of the following will pay for the repairs to the fence? Prevents the insured or injured person from collecting medical payments from more than one policy or coverage, such as uninsured motorist. - correct answer ✅What is a nostacking rule? 30 days after the date of application and payment of premium. - correct answer ✅When does flood insurance take effect? Arbitration. - correct answer ✅If a dispute arises over whether an insured is entitled to uninsured motorists coverage, what process is used to settle the dispute?
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motorcycles. - correct answer ✅All of the following vehicles can be insured under an unendorsed personal auto policy EXCEPT: Phillipsburg, St. Martin. - correct answer ✅The personal auto policy coverage applies to losses, accidents, or occurrences that take place during the policy period in all the following locations EXCEPT: The insurance company will cover the auto repairs and injuries. - correct answer ✅Roberta shares carpool expenses with coworkers. During her turn driving to work, she is involved in an accident in which one of her passengers is injured and her car is damaged. How does her personal auto policy respond? cost of a fan belt replaced at the scene of a breakdown. - correct answer ✅Towing and labor coverage covers all the following EXCEPT:
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Flood - correct answer ✅Which of the following damages is covered Under Part DCoverage for Damage to the Insured's Auto? a thief who steals the car. - correct answer ✅A personal auto policy provides coverage for all for the following drivers of an insured car EXCEPT: $21,500 - correct answer ✅Mr. Jones has an auto policy with Coverage A limits of 15/30/10. He also has a $250 deductible for collisions. He runs a red light at an intersection and collides with Mrs. James' car. Mrs. James is awarded $30,000 for her injuries and $6,000 for the damage to her car. Mr. Jones' car sustains $750 in damage. How much will Mr. Jones' policy pay for this incident? coverage starts 48 hours after a car is damaged by an other than collision loss. - correct answer ✅Craig was driving his family in his owned station wagon on vacation in Wisconsin when a deer ran out in the road and collided with the front end of the wagon. Craig had the car towed to the nearest town, where the only car repair shop told him that it would take at least a week to get the parts to repair the
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Subrogation - correct answer ✅Mary was involved in an accident with another driver. The car was damaged. Her insurance company reimburses her for the damage and seeks recovery from the negligent driver. What is this process called? nonowned automobile. - correct answer ✅Howard borrows his neighbor's car because his son took his car to college for a week while moving into the dorm. Under Howard's automobile policy, his neighbor's car is considered a (n): Joint ownership coverage. - correct answer ✅Jonathon and Mary have two sons. Steve lives at home and the other son, Stan, lives in an apartment across town. Jonathon wants to buy a car for Stan so he can get a job after his college classes. Jonathon titles the car in both his name and Stan's name and wants to add the car to his automobile policy. Which endorsement will provide this coverage?
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Other than collision. - correct answer ✅If the insured hits a deer while driving his own vehicle, which part of the personal auto policy will pay to repair the vehicle? Other than Collision. - correct answer ✅Which one of the following auto policy coverages would pay for damage to the insured's car that the insured motorist caused by hitting a farmer's cattle while driving through the country? Mexico - correct answer ✅In which of the following areas would PAP coverage typically NOT extend? Mexico City, Mexico. - correct answer ✅An auto policy would provide coverage for an auto driven in all of the following places EXCEPT: Individual named insured. - correct answer ✅Jim borrows a company van to take his son to college. As the trip takes more than 10 hours, he would like to share
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Medical payments coverage. - correct answer ✅Jane's sister, Maggie, who lives with Jane and just sold her car, drives Jane's sports car to a party. On the way home Maggie loses control of the car, hits a parked car, and rolls the car over. Maggie is severely injured and taken to the hospital. What coverage will reimburse Maggie for her medical bills? 900,000 - correct answer ✅The insured has a homeowners policy (HO3) with a $100,000 liability limit and a $1 million personal umbrella policy with a selfinsured retention of $1,000. When a child is seriously injured on the insured's property, a jury awards the plaintiff $ million. Given only these facts, for what amount is the insured personally responsible? Building is owneroccupied. - correct answer ✅Which of the following is NOT one of the requirements for a building to be eligible for coverage under a flood insurance policy? Three - correct answer ✅Under the medical payments coverage of a
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personal auto policy, the insurer pays for medical expenses and funeral services incurred within how many years from the date of an accident? No, a written endorsement by the insurer is the only way to change the policy. - correct answer ✅Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company? Miscellaneous type vehicle endorsement. - correct answer ✅What type of endorsement would be used to insure a recreational vehicle under the personal auto policy? if other auto medical insurance applies when driving an owned vehicle, this policy is excess - correct answer ✅Medical payments coverage is Part B in the personal automobile policy. All of the following statements about medical payments coverage are true EXCEPT:
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nofault law. - correct answer ✅The law that provides that each party must accept responsibility for his own losses and must recover losses from his own insurer is the: All of the car's tires are stolen. - correct answer ✅Under an auto policy, Other than Collision coverage would apply to which of the following situations? $5,000 - correct answer ✅Sue has a personal articles floater with $20, worth of jewelry coverage. She purchases a ring worth $6,000. The ring is stolen from her the following week. How much can she collect from her insurance carrier? freezing. - correct answer ✅The commercial auto policy offers physical damage coverage. One of the coverages is comprehensive. All of the following causes of loss are specifically covered under comprehensive EXCEPT
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The primary purpose of the FAIR Plan is to provide property coverage. - correct answer ✅Which of the following statements regarding the FAIR Plan is TRUE? The policy will automatically provide the required higher limits at no extra charge. - correct answer ✅If a California resident with a personal auto policy with the minimum liability limits has an accident in a state that requires higher limits, which of the following will occur? $20 per day, up to $600 maximum. Question ID: 587438 - correct answer ✅How much will the personal auto policy pay for a rental car if the insured vehicle is stolen? Car insured for less than the limits required by the state. - correct answer ✅Which of the following is considered a uninsured/underinsured motor vehicle?
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Company A's limit of liability is $100,000 and Company B's limit of liability is $300,000. How much will Company A pay for a liability loss in the event of an accident when the damages total $100,000? Richard can add the extended nonowned coverage for named individual endorsement to his policy. - correct answer ✅Richard and his wife own two family cars. In addition, Richard is given a company car to makes sales calls. He occasionally uses the company car for personal use and is concerned that he may not have sufficient company coverage. Which of the following is the best advice his agent can give him? They are written only for commercial risks. - correct answer ✅Which of the following statements about umbrella policies is NOT correct? owned automobile. - correct answer ✅Howard bought a car yesterday for his youngest son to drive to school and his job. Under Howard's automobile policy, this car is considered a (n):
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The front windshield is shattered. - correct answer ✅Mary was involved in an accident with a hitandrun driver. Her car was damaged. Which of the following items would be covered under the collision coverage in the personal auto policy? Building $250,000 and contents $100,000. - correct answer ✅What is the most coverage available for a singlefamily dwelling covered under the regular flood program? overturning of the auto. - correct answer ✅Comprehensive coverage pays for all of the following damages EXCEPT: sewer backup into a home. - correct answer ✅n a flood policy issued by the NFIP, all of the following would be considered a flood EXCEPT: temporary substitute automobile. - correct answer ✅Howard borrows his neighbor's car because his car
