Personal Auto Policy Practice Test (Part 1 of 2)

Correct answer: D. Until the end of 90 days following her change of residency

A spouse who stops living in the household remains "you" only until the earliest of: 90 days after the change of residency, the effective date of another policy listing the spouse as a named insured, or the end of the policy period. Here, 90 days after April 1 comes well before December 31, so it is the cutoff. Residency, not marital status, controls.

Reference: ISO PP 00 01 09 18, Definitions A ("you" and "your")

Correct answer: A. A foster child who lives in the named insured's household

A "family member" is a person related to the named insured by blood, marriage or adoption who is a resident of the household, and the definition expressly includes a ward or foster child. The married son is related but not a resident. The roommate and the fiance live in the household but are not related by blood, marriage or adoption, so neither qualifies.

Reference: ISO PP 00 01 09 18, Definitions F ("family member")

Correct answer: C. It covers the loss, because she asked within 14 days and Collision Coverage applies to at least one declared auto

When the declarations show Collision on at least one auto, Collision on a newly acquired auto begins on the date of ownership, provided the insured asks for coverage within 14 days. The new car then gets the broadest collision coverage on any declared auto. The $500 deductible belongs to the four-day rule, which applies only when no declared auto carries Collision.

Reference: ISO PP 00 01 09 18, Definitions K.2.b (newly acquired auto, Collision)

Correct answer: B. Collision applies to the Tuesday loss, subject to a $500 deductible

If the declarations do not show Collision on any auto, a newly acquired auto still gets Collision from the date of ownership if the insured asks within four days. When a loss occurs before the request, a $500 Collision deductible applies. Tomas asked two days after buying the car, so the Tuesday loss is covered less $500. Asking later than four days would start coverage only on the day he asked.

Reference: ISO PP 00 01 09 18, Definitions K.2.b(2) and K.2.d

Correct answer: D. No, because she did not ask within 14 days, so coverage begins on the day she asks

The 2018 edition requires the insured to ask the insurer to cover any newly acquired auto, replacement or additional, within 14 days for coverages other than Part D. If the request comes later, coverage begins on the day of the request, which is after this accident. The tempting automatic-replacement answer reflects the older PP 00 01 01 05, which covered a replacement vehicle without a request.

Reference: ISO PP 00 01 09 18, Definitions K.2.a and K.2.d; compare PP 00 01 01 05, Definitions K.2.a

Correct answer: A. A farm wagon while it is being towed by the insured's pickup

A "trailer" is a vehicle designed to be pulled by a private passenger auto, pickup or van. The definition also includes a farm wagon or farm implement, but only while towed by one of those vehicles, so the parked implement does not qualify. A semitrailer is designed for a highway tractor, not a private passenger vehicle, and a motor home is self-propelled.

Reference: ISO PP 00 01 09 18, Definitions I ("trailer")

Correct answer: C. Yes, because "occupying" includes getting in, on, out or off the vehicle

Part B covers the named insured and family members, plus any other person while "occupying" the covered auto. The policy defines occupying as in, upon, or getting in, on, out or off a vehicle, so a person in the act of entering qualifies. Part B is not limited to the household, and it does not require that the injured person lack health insurance.

Reference: ISO PP 00 01 09 18, Definitions G ("occupying") and Part B Insuring Agreement B.2

Correct answer: B. They are paid in addition to the limit of liability

The Part A insuring agreement says the insurer will pay all defense costs it incurs in addition to its limit of liability. The duty to settle or defend ends, however, once the limit has been exhausted by payment of judgments or settlements, and there is no duty to defend a claim the policy does not cover.

Reference: ISO PP 00 01 09 18, Part A Insuring Agreement A

Correct answer: D. Yes, for its legal responsibility for Priya's acts, because it does not own or hire the car

For any auto other than "your covered auto," Part A insures any other person or organization, but only for legal responsibility for the acts or omissions of the named insured or a family member, and only if that person or organization does not own or hire the auto. The nonprofit qualifies for vicarious liability arising from Priya's driving, not for its own separate acts.

Reference: ISO PP 00 01 09 18, Part A Insuring Agreement B.4

Correct answer: C. $1,000

Supplementary Payments cover up to $250 for bail bonds required because of an accident with covered bodily injury or property damage, and, in the 2018 edition, up to $250 a day for lost earnings (not other income) when attending hearings or trials at the insurer's request. So $250 + (3 x $250) = $1,000, paid in addition to the limit. The older PP 00 01 01 05 paid $200 a day.

Reference: ISO PP 00 01 09 18, Part A Supplementary Payments 1 and 4; PP 00 01 01 05, Supplementary Payments 4

Correct answer: C. The light pole owned by the city

Part A pays for property damage to others' property for which the insured is legally responsible. It excludes property damage to property owned or being transported by that insured, so the laptop and the golf clubs being carried are excluded. Damage to Jun's own car is a first-party loss handled under Part D if he carries Collision. Only the city's light pole is a liability loss.

Reference: ISO PP 00 01 09 18, Part A Exclusions A.2

Correct answer: A. An insured's use of such a vehicle in a medical emergency

The exclusion for vehicles with fewer than four wheels or designed mainly for off-road use has three exceptions: use by an insured in a medical emergency, any "trailer," and any non-owned golf cart. Motorcycles, dirt bikes and all-terrain vehicles, whether owned or borrowed, stay excluded and need separate coverage, such as a motorcycle policy or the Miscellaneous Type Vehicle Endorsement.

Reference: ISO PP 00 01 09 18, Part A Exclusions B.1

Correct answer: D. No, because the livery exclusion applies whenever she is logged in as a driver, with or without a passenger

The 2018 edition's public or livery conveyance exclusion includes any period when an insured is logged into a "transportation network platform" as a driver, whether or not a passenger is occupying the vehicle. Coverage for that period must come from the platform's insurance or other coverage arranged for that use. The exclusion does not apply to a share-the-expense car pool or to use for volunteer or charitable purposes.

Reference: ISO PP 00 01 09 18, Definitions L and Part A Exclusions A.5

Correct answer: B. No, because the policy excludes anyone engaged in the vehicle repair business, including road testing

Exclusion A.6 removes coverage for any insured while employed or engaged in the business of selling, repairing, servicing, storing or parking vehicles designed for use mainly on public highways, including road testing and delivery. The shop's own commercial coverage should respond. The exception to this exclusion protects only the named insured, family members, and their partners, agents or employees, not the shop's mechanic.

Reference: ISO PP 00 01 09 18, Part A Exclusions A.6

Correct answer: B. $75,000

Apply the per-person limit first: $25,000 + $12,000 + $18,000 = $55,000. That exceeds the $50,000 each-accident bodily injury limit, so bodily injury payments stop at $50,000. Property damage is capped at $25,000. Total: $50,000 + $25,000 = $75,000, and Nora is personally exposed to the rest. $80,000 forgets the each-accident cap.

Reference: ISO PP 00 01 09 18, Part A Limit of Liability A

Correct answer: C. One limit applies per accident to bodily injury and property damage combined, with no per-person limit

A combined (single) limit is the most the insurer pays for all damages from one accident, bodily injury and property damage together, regardless of the number of insureds, claims or vehicles. Split limits, such as 100/300/100, cap each injured person, all bodily injury per accident, and property damage separately. A single limit is not an annual aggregate.

Reference: ISO PP 03 09 Single Liability Limit endorsement, as summarized by FC&S

Correct answer: D. The 30/60/25 limits required by the state where the accident occurred

If an accident happens in a state or province other than where the covered auto is principally garaged, and that state's financial responsibility or similar law specifies higher liability limits than the declarations show, the policy provides the higher limits. No one may collect duplicate payments for the same elements of loss. The policy neither voids coverage nor sets its own fixed minimum.

Reference: ISO PP 00 01 09 18, Part A Out of State Coverage A.1

Correct answer: B. The cousin's insurer pays $25,000, and Omar's insurer pays $45,000 as excess

A temporary substitute is a "your covered auto" for liability, but the Other Insurance clause makes coverage for any vehicle the insured does not own, including a temporary substitute, excess over other collectible insurance. The owner's policy, which covers Omar as a permissive user, pays first up to its $25,000 limit. Omar's policy pays the remaining $45,000. Pro rata sharing by limits does not apply to non-owned vehicles.

Reference: ISO PP 00 01 09 18, Definitions J.4 and Part A Other Insurance

Correct answer: D. Physical therapy received two years after an accident in his covered auto

Part B pays for necessary medical services rendered within three years of the accident, so therapy two years later qualifies. Part B excludes bodily injury sustained while occupying any motorized vehicle with fewer than four wheels, while occupying the covered auto when it is used as a public or livery conveyance, and during the course of employment when workers' compensation benefits are required or available.

Reference: ISO PP 00 01 09 18, Part B Insuring Agreement A and Exclusions 1, 2 and 4

Correct answer: B. $11,000

The Part B limit applies to each person injured in any one accident; there is no separate per-accident cap. Lucia's bills are limited to $5,000, while her son's $2,000 and the friend's $4,000 fall within the limit: $5,000 + $2,000 + $4,000 = $11,000. The friend qualifies as another person occupying the covered auto. $5,000 wrongly treats the limit as per accident.

Reference: ISO PP 00 01 09 18, Part B Limit of Liability A

Correct answer: C. No, because a hit-and-run vehicle must actually hit her, a vehicle she occupies or her covered auto

The PAP defines a hit-and-run uninsured motor vehicle as one whose owner or operator cannot be identified and which hits the insured or a family member, a vehicle they are occupying, or the covered auto. A "miss-and-run" with no contact does not meet that wording. Many states change this rule by statute or amendatory endorsement, often requiring corroborating evidence, so state amendments must be checked.

Reference: ISO PP 00 01 09 18, Part C Insuring Agreement C.3

Correct answer: A. A vehicle whose liability insurer becomes insolvent

An uninsured motor vehicle includes one with no bodily injury liability coverage, one with limits below the state financial responsibility minimum, an unidentified hit-and-run vehicle, and one whose insurer denies coverage or is or becomes insolvent. The definition specifically excludes vehicles owned by a governmental unit, vehicles furnished for the regular use of the named insured or family members, and vehicles operated on rails or crawler treads.

Reference: ISO PP 00 01 09 18, Part C Insuring Agreement C

Correct answer: D. No, because a vehicle with limits equal to the state minimum is not an "uninsured motor vehicle"

Under Part C, an insured vehicle counts as uninsured only if its bodily injury limit is less than the financial responsibility minimum of the state where the covered auto is principally garaged, or if its insurer denies coverage or is insolvent. A driver carrying exactly the minimum is not uninsured. Recovering the shortfall requires underinsured motorists coverage, such as ISO endorsement PP 03 11.

Reference: ISO PP 00 01 09 18, Part C Insuring Agreement C.2; ISO PP 03 11 Underinsured Motorists Coverage

Correct answer: B. Arbitration takes place only if both the insurer and the insured agree to it

Part C arbitration addresses whether the insured is legally entitled to recover from the uninsured motorist and the amount of damages, and both parties must agree to arbitrate. Coverage disputes may not be arbitrated. Each side selects an arbitrator, and those two select a third (or a judge does if they cannot agree within 30 days). Each side pays its own expenses and shares the third arbitrator's cost equally.

Reference: ISO PP 00 01 09 18, Part C Arbitration A and B

Correct answer: C. $150,000

Stacking adds UM limits together: $50,000 for each of three insured vehicles equals $150,000 available, still below her $200,000 of damages. The ISO policy tries to prevent stacking by stating that its limit is the most it will pay regardless of the number of vehicles or premiums shown. Where that language is enforced, only $50,000 would apply.

Reference: ISO PP 00 01 09 18, Part C Limit of Liability A; Triple-I, Background on Compulsory Auto/Uninsured Motorists (stacking)