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 […]
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 […]
Money-market transactions include which of the following? A) 30-year U.S. Treasury bonds B) securities that have a maturity of less than one year C) all securities paid for with the proceeds of a money-market account D) any security that is paid for with cash ANSWER B
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’s auto A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Lower asset turnover ratios are generally indicative of more efficient asset management. Indicate whether the statement is true or false ANSWER FALSE
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 stemming from an auto accident. B) the cost of a bail bond for a traffic violation when no accident is involved. C) interest which accrues on a liability […]
In which of the following cases will the agency problem between shareholders and managers be the greatest? A) The Johnson family owns 50% of the common stock of the company. The other 50% is owned by 5 mutual funds. B) 100% of the common stock is owned by the founder of the company who decided […]
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’s new motorcycle. B) The insured backs into and damages the garage door of his rented house. C) The insured intentionally runs into another […]
In which of the following situations would medical payments be paid under an unendorsed PAP? A) injuries incurred while riding a motorcycle B) injuries incurred while an auto is being used without the presumption that permission would have been granted to use the auto C) injuries incurred in an auto while it is used in […]
