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AINS 103: CHAPTER #4 PRACTICE EXAM QUESTIONS AND ANSWERS
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AINS 103: CHAPTER #4 PRACTICE EXAM QUESTIONS AND ANSWERS
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AINS 103: CHAPTER #4 PRACTICEEXAM QUESTIONS AND ANSWERS
What format do most insurers use for commercial auto coverage? - Answer-Due to auto
insurance needs and legal requirements, coverage needs can vary, which is why most
insurers use a flexible, modular format.
Business Auto Coverage Form (BACF): - Answer-Provides auto liability insurance and
includes optional coverage for physical damage to autos.
BACF Liability Coverage: - Answer-The insurer agrees to pay damages for bodily injury
or property damage the insured is liable for that is caused by an accident involving a
covered auto. Exclusions, policy limits and other conditions may apply.
BACF Physical Damage Coverage: - Answer-Coverage is optional, but is often required
if a business is financing or leasing its autos.
The BACF allows a business to select from three basic physical damage coverages: -
Answer--Collision
-Comprehensive
-Specified Causes of Loss
Collision Coverage: - Answer-Insures direct and accidental loss of or damage to a
covered auto caused by its collision with another object or is overturned.
Comprehensive Coverage: - Answer-Open perils coverage, which insures direct and
accidental loss of or damage to a covered auto by any peril EXCEPT collision, overturn,
or one specifically excluded. Overlaps with Specified Causes of Loss Coverage.
Specified Causes of Loss Coverage: - Answer-Covers direct and accidental loss caused
by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief,
vandalism, or loss resulting from the sinking, burning, collision, or derailment of a
conveyance transporting the covered auto. Overlaps with Comprehensive Coverage.
Important Endorsements: - Answer-Coverages for medical payments, personal injury
protection (PIP), uninsured motorists (UM), and underinsured motorists (UIM) are
commonly added by endorsements to commercial auto coverage forms.
Auto Medical Payments Coverage: - Answer-Pays small bodily injury claims resulting
from an auto accident, regardless of fault.
(Personal Injury Protection (PIP) Coverage: - Answer-May be legally required by state
law. It pays benefits, regardless of fault, for medical expense, income loss, and other
expenses resulting from an accident.
, Uninsured/Underinsured Motorist (UM/UIM) Coverage: - Answer-Pays for injuries
caused by another motorist who is uninsured/underinsured and unable to pay as a
result.
Jane is an Electrician who drives her employer covered auto, a van, to a customer's
house. While parked, the van leaked coolant on the customers driveway. Does the
BACF provide coverage for the pollution cleanup? - Answer-Yes.
What three basic physical damage coverages does the BACF offer to businesses? -
Answer--Collision
-Comprehensive
-Specified Causes of Loss
Which example would qualify as an uninsured motorist pursuant to an uninsured
motorist UM endorsement on a business auto policy? - Answer-A hit-and-run driver.
The Morlyn Corporation has a Business Auto Coverage Form (BACF) that provides
liability coverage for any auto. In addition to the named insured, who/what would also be
an insured under Morlyn's BACF when driving a covered auto? - Answer-An employee
driving a vehicle leased by Morlyn for business purposes.
Coverage will apply under the liability insuring agreement of the Business Auto
Coverage Form (BACF) for bodily injury or property damage due to: - Answer-Caused
by an accident.
Which is an example of a loss covered by Employers Liability Insurance? - Answer-An
injured employee sues a third party who, in turn, sues the injured person's employer for
negligence that resulted in the injury.
Umbrella liability insurance MAY cover: - Answer-Some claims that are not covered by
underlying liability insurance.
In equipment breakdown insurance, an example of a piece of mechanical equipment is
a: - Answer-Turbine.
Policies for the crime loss exposure for financial institutions are called "bonds" because:
- Answer-Employee dishonesty, a key coverage, was traditionally called a "fidelity
bond."
Large Manufacturer, Inc. needs to move its expensive three ton piece of equipment that
it manufactured from its manufacturing plant to the buyer's premises some 50 miles
away. Which one of the following is the best way to insure this equipment for the move?
- Answer-Purchase trip transit insurance.
Employers Liability Insurance claims cover: - Answer--A third party claim.
-A claim for care and loss services, sometimes referred to as loss of consortium.
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