All of the following statements about Part D (coverage for damage to your auto) of the PAP are true EXCEPT A) Coverage may be purchased with or without collision insurance. B) Losses are paid regardless of fault. C) Coverage applies to a nonowned auto occasionally driven by an insured. D) No coverage is provided for […]
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 […]
If a company’s cash balance increases during the year, and the company also reports positive net income, then the company’s retained earnings balance must increase. Indicate whether the statement is true or false ANSWER FALSE
Larry has $25,000 of bodily injury liability coverage under his PAP. This limit is the minimum amount required by his state to be considered financially responsible. While on a vacation, Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury. Which of the following statements describes the situation […]
John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie’s car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. […]
Another name for an asset’s expected rate of return is holding-period return. Indicate whether the statement is true or false ANSWER FALSE
Tim invested $1,000 in a mutual fund paying 8% per year. John invested $500 in the same fund. If both Tim and John keep their money invested for the same period of time, Tim will end up with twice as much money as John. Indicate whether the statement is true or false ANSWER […]
Fixed assets are assets whose balances will remain the same throughout the year. Indicate whether the statement is true or false ANSWER FALSE
What is the purpose of the extended nonowned liability coverage endorsement to the PAP? A) to provide liability coverage for an insured’s employer when an insured uses his or her auto for business purposes B) to provide liability coverage for an insured who occasionally operates a nonowned auto C) to provide liability coverage for anyone […]
Which of the following situations would be covered under the liability section of the PAP? I. A mechanic is sued by a pedestrian who is injured when the mechanic has an accident while road testing the insured’s auto. II. The daughter of the named insured is sued after she has an accident when a new […]
