Owen’s car is insured under a Personal Auto Policy (PAP). A hail storm occurred one evening, and his car was severely damaged. Which PAP coverage, if Owen purchased it, would cover this damage to his auto? A) property damage liability B) uninsured motorists property damage C) collision D) other-than-collision ANSWER Answer: D
Which of the following statements is true about uninsured motorists coverage under the Personal Auto Policy? A) The benefits are paid without regard to fault. B) The insured collects from his or her own insurer, and the insurer can recoup the loss payment from the other driver. C) Uninsured motorists benefits are limited to the […]
A car damaged in an auto accident may have reduced market or resale value after it is repaired. Some insureds have sought to recover this reduction in market or resale value. This loss in value is called A) gap coverage. B) betterment. C) diminution. D) subrogation. ANSWER Answer: C
All of the following are considered to be a covered auto under the Personal Auto Policy EXCEPT A) a trailer owned by the insured. B) a temporary substitute auto loaned to the insured while her care is being repaired. C) a motorcycle owned by the insured. D) a newly acquired auto. ANSWER Answer: […]
The 2005 PAP states that the insurer has no duty to provide coverage if the insured fails to comply with certain listed duties. In practice, however, the insurer is only relieved of its duty to provide coverage if A) the insured was unaware of the listed duties. B) failure to comply with the duties is […]
Jenny purchased a Personal Auto Policy (PAP) that included property damage liability, collision coverage, medical payments coverage, and other-than-collision coverage. Jenny had too much alcohol to drink at a graduation party. While driving home from the party, Jenny ran off the road and hit a tree. Police responded to the accident, and Jenny was arrested […]
Which statement concerning towing and labor coverage under the PAP is (are) true? I. There’s no coverage for towing if the auto breaks down—towing is only covered if the auto needs to be towed after a collision has occurred. II. Towing and labor coverage pays for repairs at a service station or garage. A) I […]
Gary purchased a Personal Auto Policy (PAP) that included collision coverage. Gary lost control of his vehicle on an icy road. He slid across the center line into oncoming traffic. Another vehicle hit his car, causing severe damage to it. Ignoring any deductible, what is the insurer’s liability for damage to Gary’s car? A) the […]
One weakness of the times interest earned ratio is that it includes only the annual interest expense as a finance expense and ignores other financing items such as lease payments that must be paid. Indicate whether the statement is true or false ANSWER TRUE
Consider the after-tax cash flows for Project S and Project L: Project S Project L Year 1 $3000 0 Year 2 0 $3000 A rational person would prefer ________. A) Project L because they can avoid taxes by receiving cash flows later B) Project S because the money can be reinvested sooner C) information about […]
