Commercial Auto, Garage and Aviation Practice Test (Part 1 of 2)

Correct answer: C. Symbol 1, Any auto

Symbol 1 (Any auto) is the broadest designation: every auto qualifies, whether owned, hired, borrowed or non-owned, including autos acquired during the policy period. Symbol 2 reaches only owned autos, Symbol 7 only autos described in the declarations with a premium charge, and Symbol 9 only autos the insured does not own, hire or borrow. Symbols 2, 8 and 9 together come close, but no other single symbol does it alone.

Reference: ISO CA 00 01 10 13, Section I.A, Description Of Covered Auto Designation Symbols

Correct answer: A. It does not apply, because the van was an addition and not all owned vans had collision

With Symbol 7, a newly acquired auto is covered for a coverage only if the insurer already covers all owned autos for that coverage, or the new auto replaces one that had it, and the insured asks within 30 days of acquisition. Timely notice alone is not enough. Only 3 of 5 vans had collision and this van was an addition, so collision applies only once the insurer adds it. A symbol such as 1, 2 or 4 would have picked it up automatically.

Reference: ISO CA 00 01 10 13, Section I.B, Owned Autos You Acquire After The Policy Begins

Correct answer: D. Land vehicles that would be mobile equipment but for a compulsory or financial responsibility law

Symbol 19 (Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only) covers land vehicles that would meet the mobile equipment definition if they were not subject to such a law where licensed or principally garaged. Because the law applies, the form treats them as autos. Owned autos subject to no-fault are Symbol 5, and owned autos subject to a compulsory uninsured motorists law are Symbol 6.

Reference: ISO CA 00 01 10 13, Section I.A (Symbols 5, 6 and 19) and Section V, Definition of Mobile Equipment

Correct answer: B. A trailer with a registered gross vehicle weight rating of 3,000 pounds or less, built for public roads

If the policy provides Covered Autos Liability Coverage, CA 00 01 11 20 automatically treats trailers with a registered gross vehicle weight rating of 3,000 pounds or less, designed primarily for travel on public roads, as covered autos for liability. The 10 13 edition used a different test: a load capacity of 2,000 pounds or less. Larger trailers need a symbol such as 1, 2 or 4, or scheduling under Symbol 7.

Reference: ISO CA 00 01 11 20, Section I.C.1; Big I summary of 2020 BAP changes

Correct answer: C. Yes, as a temporary substitute for its covered van that is out for repair

When the form provides Covered Autos Liability Coverage, an auto the insured does not own, used with its owner's permission as a temporary substitute for an owned covered auto out of service because of breakdown, repair, servicing, loss or destruction, is also a covered auto for liability regardless of the symbol. Symbol 7 limits the scheduled autos, not this extension. Because Ortega does not own the van, the coverage is excess over other collectible insurance.

Reference: ISO CA 00 01 10 13, Section I.C.3 (Temporary Substitute Autos) and Section IV.B.5, Other Insurance

Correct answer: A. A dump truck the company rents from a rental firm for a two-week job

Symbol 8 covers autos the named insured leases, hires, rents or borrows, but it expressly excludes autos leased, hired, rented or borrowed from the insured's employees, partners, LLC members or members of their households. A rented dump truck fits. The employee's pickup is carved out, the newly bought trailer is owned (Symbols 1, 2 or 4), and a crew member's own car used on business falls under Symbol 9, non-owned autos.

Reference: ISO CA 00 01 10 13, Section I.A, Symbols 8 and 9

Correct answer: B. Harbor Design only; Mei must rely on her own auto policy

Symbol 9 makes employees' cars used in the business covered autos, so Harbor is an insured for its vicarious liability, since the named insured is an insured for any covered auto. But Who Is An Insured excludes an employee when the covered auto is owned by that employee or a member of the employee's household. Mei is not an insured under Harbor's policy, so her personal auto policy must defend her.

Reference: ISO CA 00 01 10 13, Section II.A.1, Who Is An Insured, exception (2)

Correct answer: D. No, because he was working in someone else's auto repair business

Permissive users of owned covered autos are generally insureds, but the form excepts anyone using a covered auto while working in a business of selling, servicing, repairing, parking or storing autos, unless that business is the named insured's. The repair shop's own coverage is expected to respond. Insured status for permissive users of owned autos is not limited to employees, so the employees-only reasoning is wrong.

Reference: ISO CA 00 01 10 13, Section II.A.1.b, Who Is An Insured, exception (3)

Correct answer: A. $3,000

Supplementary Payments cover up to $2,000 for the cost of bail bonds required because of a covered accident, including bonds for related traffic violations, plus reasonable expenses the insured incurs at the insurer's request, including lost earnings up to $250 a day. The bond is capped at $2,000 and wages at $250 times 4 days, or $1,000, for $3,000. These payments do not reduce the liability limit.

Reference: ISO CA 00 01 10 13, Section II.A.2.a, Supplementary Payments (2) and (4)

Correct answer: C. It rises to the compulsory minimum where the sedan is being used

While a covered auto is away from the state where it is licensed, the form raises the Covered Autos Liability limit to meet the compulsory or financial responsibility law of the jurisdiction where it is being used, and provides the minimum coverages, such as no-fault, that jurisdiction requires of out-of-state vehicles. The extension does not apply to limits required by laws governing motor carriers, and no one is paid twice for the same loss.

Reference: ISO CA 00 01 10 13, Section II.A.2.b, Out-of-state Coverage Extensions

Correct answer: D. It excludes the claim under the fellow employee exclusion

The fellow employee exclusion removes coverage for bodily injury to any fellow employee of the insured arising out of and in the course of the fellow employee's employment. Tomas is an insured, but Ade was hurt while working, so the claim against Tomas is excluded. A separate exclusion bars the employer's liability for injury to its own employees, leaving workers compensation as Ade's remedy.

Reference: ISO CA 00 01 10 13, Section II.B.4 and B.5, Employee Indemnification and Fellow Employee exclusions

Correct answer: B. The customer's sofa being delivered in the truck

The care, custody or control exclusion bars property damage to property owned or transported by the insured or in the insured's care, custody or control. The sofa was being transported by the store, so liability coverage does not apply to it; that exposure calls for inland marine transit coverage. Damage to the pole, the parked car and the storefront belongs to third parties and is covered.

Reference: ISO CA 00 01 10 13, Section II.B.6, Care, Custody Or Control

Correct answer: A. Injury caused by an unattached forklift used to unload pallets

The form excludes bodily injury or property damage resulting from the movement of property by a mechanical device, other than a hand truck, unless the device is attached to the covered auto. A free-standing forklift is excluded and is normally a general liability exposure. An attached liftgate and a hand truck fall outside the exclusion, and manual unloading is part of the auto's use, so those injuries remain covered.

Reference: ISO CA 00 01 10 13, Section II.B.8, Movement Of Property By Mechanical Device

Correct answer: C. Damage from diesel leaking out of the truck's own ruptured fuel tank

The pollution exclusion applies to pollutants being transported, towed or handled by the covered auto, so every claim arising from the gasoline cargo is excluded. An exception covers fuels, lubricants and fluids needed for the auto's normal functioning when they escape directly from a part the manufacturer designed to hold them, such as the fuel tank. Diesel from the ruptured tank therefore falls back into coverage. Haulers of pollutants need a pollution endorsement for cargo exposures.

Reference: ISO CA 00 01 10 13, Section II.B.11, Pollution, and Section V.D, Covered Pollution Cost Or Expense

Correct answer: D. Striking a deer on a rural highway

Specified Causes Of Loss Coverage is named-peril: fire, lightning or explosion; theft; windstorm, hail or earthquake; flood; mischief or vandalism; and the sinking, burning, collision or derailment of a conveyance transporting the auto. Loss caused by hitting a bird or animal is paid under Comprehensive Coverage when the insured carries it, so it is not a specified cause. Comprehensive is the broader option, covering any cause except collision and overturn.

Reference: ISO CA 00 01 10 13, Section III.A.1 and A.3, Physical Damage Coverage

Correct answer: B. $360

The extension pays temporary transportation expenses after the total theft of a covered private passenger auto that carries Comprehensive or Specified Causes Of Loss Coverage. The 11 20 edition pays up to $30 a day, to a $900 maximum, starting 48 hours after the theft and ending when the auto is returned to use or the loss is paid. Covered days are 14 minus 2, or 12, and 12 times $30 equals $360. The 10 13 edition paid $20 a day up to $600.

Reference: ISO CA 00 01 11 20, Section III.A.4.a, Transportation Expenses (compare CA 00 01 10 13)

Correct answer: A. $42,000

Physical damage pays the lesser of actual cash value or the cost of repair, reduced by the deductible. In the 10 13 edition, however, any Comprehensive deductible shown in the declarations does not apply to loss caused by fire or lightning. The truck is a total loss at its $42,000 actual cash value, and no deductible is taken, so the insurer pays $42,000. A theft or hail loss would have been reduced by the $1,000 deductible.

Reference: ISO CA 00 01 10 13, Section III.C, Limits Of Insurance, and III.D, Deductible

Correct answer: D. $19,500

Deductibles normally apply per covered auto, which would subtract $7,000 here. The 11 20 edition adds a cap: for all loss in any one event caused by theft or mischief or vandalism, or by all perils, the total deductible is limited to five times the highest Comprehensive or Specified Causes Of Loss deductible on any one covered auto. Five times $1,000 is $5,000, so the insurer pays $24,500 minus $5,000, or $19,500.

Reference: ISO CA 00 01 11 20, Section III.D, Deductible; Big I summary of 2020 BAP changes

Correct answer: C. $1,000

The form excludes electronic equipment that reproduces, receives or transmits audio, visual or data signals, but that exclusion does not apply to equipment powered solely by the auto's electrical system and permanently installed. When such equipment sits in a housing or location the manufacturer does not normally use for it, the most paid for all of it in any one loss is $1,000. Equipment in the factory location is not subject to that $1,000 cap.

Reference: ISO CA 00 01 10 13, Section III.B.4 and B.5 (exclusions) and III.C.1.b (limit)

Correct answer: B. A stolen van is recovered with an engine the thief ran without oil

Physical damage coverage excludes loss due and confined to wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires. The exclusion does not apply when such loss results from the total theft of a covered auto, so engine damage done while a stolen van was missing is covered under Comprehensive. A failed oil pump, normal wear and freeze damage confined to the engine stay excluded; mechanical breakdown coverage exists for failures like the oil pump.

Reference: ISO CA 00 01 10 13, Section III.B.3, Physical Damage Exclusions

Correct answer: A. $200,000

When this coverage form and other insurance cover on the same basis, both primary or both excess, the insurer pays only its share: the proportion its limit bears to the total of all applicable limits. $500,000 divided by $1,500,000 is one third, and one third of $600,000 is $200,000, leaving $400,000 for the other insurer. Splitting the loss equally, which gives $300,000, is a different method that this form does not use.

Reference: ISO CA 00 01 10 13, Section IV.B.5.d, Other Insurance

Correct answer: C. The Auto Dealers Coverage Form (CA 00 25)

ISO replaced the Garage Coverage Form with the Auto Dealers Coverage Form (CA 00 25) in the 10 13 revision. The dealers form packages covered autos liability, general liability for auto dealer operations, garagekeepers coverage, physical damage on dealer autos, and acts, errors or omissions coverage. Non-dealer service businesses such as repair shops are commonly insured with a commercial general liability form plus a business auto form instead.

Reference: Rough Notes Policy Form Manual, Auto Dealers Coverage Form CA 00 25 (replaced CA 00 05 in the 10 13 revision)

Correct answer: D. A dealer selling utility and cargo trailers

The Auto Dealers Coverage Form is designed for dealers: franchised and non-franchised auto dealers, trailer dealers, and equipment and implement dealers. Its dealer symbols, inventory physical damage and acts, errors or omissions coverage fit businesses that sell vehicles. Repair shops and parking garages are not dealers, and a trucking company's auto exposure fits the Motor Carrier Coverage Form.

Reference: Rough Notes Policy Form Manual, Auto Dealers Coverage Form CA 00 25, eligibility

Correct answer: B. Nothing, since the dealer is not legally liable for the hail damage

Garagekeepers Coverage pays sums the insured legally must pay as damages for loss to customers' autos left in its care. On the legal liability basis a covered peril is not enough; the dealer must be liable. Hail without negligence creates no liability, so nothing is paid and customers turn to their own comprehensive coverage. The direct primary option pays regardless of liability, and the direct excess option pays regardless of liability over other insurance.

Reference: ISO CA 00 25 10 13, Section I.E.1, Garagekeepers Coverage; CA DS 26 10 13, Item Five, Direct Coverage Options

Correct answer: A. It pays regardless of liability, but only over the customer's other collectible insurance

With the Excess Insurance option, Garagekeepers Coverage still applies on a legal liability basis, but it also pays for loss to a customer's auto without regard to the insured's liability, on an excess basis over any other collectible insurance, including the owner's own auto coverage. The Primary Insurance option instead pays regardless of liability as primary insurance. Without either option, the dealer must be legally liable.

Reference: ISO CA DS 26 10 13 (Auto Dealers Declarations), Item Five, Direct Coverage Options