Personal Finance Final Exam Questions>Verified And Reviewed Answers With Rationales | Already Passed!!
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Personal Finance
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Personal Finance
Personal Finance Final Exam
Questions>Verified And Reviewed
Answers With Rationales
| Already Passed!!
1) On a PAP, all of the following are covered by the Medical Payments section
EXCEPT:
A. The named insured or family members while occupying a motor vehicle
B. The named insured ...
Personal Finance Final Exam
Questions>Verified And Reviewed
Answers With Rationales
| Already Passed!!
1) On a PAP, all of the following are covered by the Medical Payments section
EXCEPT:
A. The named insured or family members while occupying a motor vehicle
B. The named insured or family members when struck as a pedestrian
C. Passengers riding in the insured's covered auto
D. Persons riding in an auto with which the insured has collided - ANSWER D.
Persons riding in an auto with which the insured has collided
Auto Medical covers the named insured and family members, even as
pedestrians. Passengers riding in the covered auto are also covered. However,
injuries to persons riding in another car with which the insured collides with
would be covered by the insured's Bodily Injury liability, if it was the insured's
fault.
2) All of the following are true about transportation expense on a PAP EXCEPT:
A. It applies after total theft of a covered auto
B. Coverage is limited to a daily maximum
,C. There is a waiting period before coverage starts
D. Coverage applies when the covered auto suffers mechanical breakdown -
ANSWER D. Coverage applies when the covered auto suffers mechanical
breakdown
If the insured carries Physical Damage coverage on his PAP, Transportation
Expenses are covered after a short waiting period up to a certain $$ amount for a
certain number of days due to the total theft of a covered auto. Coverage also
applies if the covered auto is out of service due to a covered loss. There is no
deductible.
3) On a PAP, all of the following are true about Uninsured Motorist (UM) coverage
EXCEPT:
A. It cannot be written for more than the insured's limits for Bodily Injury liability
B. It covers injuries sustained by an insured when a hit and run driver is involved
C. A UM claim is turned into the insured's own insurance company
D. It pays regardless of fault - ANSWER D. It pays regardless of fault
UM coverage applies when an insured is injured by an at-fault driver who has no
auto liability insurance. Although UM limits may be high, they cannot be higher
than an insured carries for BI liability to others. You carry UM on your own PAP,
but it actually covers the uninsured driver. In order to collect, you have to turn
the claim into your own insurer and prove that the uninsured driver was
negligent. If he was not at-fault, you could not collect from him even if he had
insurance. Hit and run drivers are also considered to be uninsured motorists.
4) Actual cash value is defined as:
A. Market value minus depreciation
B. Replacement cost minus depreciation
C. Appraised value minus depreciation
,D. Original cost plus appreciation - ANSWER B. Replacement cost minus
depreciation
To find the ACV at the time of the loss, first find the replacement cost of the
dwelling (not counting the land). Then, subtract the depreciation, which is based
upon the age of the dwelling. On a new home, the ACV and the RC are the same.
4) The purpose of coinsurance on fire insurance is to:
A. Require the client to pay part of every claim
B. Require the client to carry proper coverage
C. Eliminate coverage for small claims
D. To reinforce the Principle of Indemnity - ANSWER B. Require the client to
carry proper coverage
The 80% co-insurance clause, which is contained in all personal lines property
policies that have replacement cost coverage, is designed to make sure that
insureds carry adequate insurance to value. If they don't, they are subject to a co-
insurance penalty.
5) An insured person on a PAP includes all of the following EXCEPT:
A. Anyone using the covered auto with permission of the named insured
B. Any family member residing in your household
C. The spouse of the named insured
D. A parking lot attendant while parking a covered auto - ANSWER D. A
parking lot attendant while parking a covered auto
Liability coverage would not apply to a parking lot attendant while parking a
covered auto due to the exclusion relating to the auto business.
, On a PAP, an insured person includes the named insured, family members and
any other person the named insured loans his covered auto to. All coverages
would apply to an insured person.
6) All are true about Towing & Labor coverage on a PAP EXCEPT:
A. It pays on an occurrence basis up to a specified limit
B. It is an optional coverage
C. To be covered, labor must be performed at the place of breakdown
D. It is also known as Transportation Expense - ANSWER D. It is also known as
Transportation Expense
Transportation Expense coverage is provided free of charge if the insured has
Physical Damage (Collision and Other than Collision) coverage. Towing and Labor
is an optional endorsement that provides coverage up to a specified limit per
occurrence. Both towing and labor are covered, but labor must be performed at
the place of breakdown.
7) The Named Non Owner endorsement may be added to a PAP to provide
coverage for:
A. Relatives of the named insured who do not live in the same household
B. Someone who does not own an automobile, but drives borrowed or rented
autos
C. Young drivers in the household who do not own their own car
D. Non family members who use the insured's auto with permission - ANSWER
B. Someone who does not own an automobile, but drives borrowed or rented
autos
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