1. Leroy’s customized pick-up truck is damaged when he collides with a telephone
ID: 3363945 • Letter: 1
Question
1. Leroy’s customized pick-up truck is damaged when he collides with a telephone pole. Leroy rents another pickup truck to provide transportation while his truck is being repaired. Leroy has a Personal Auto Policy (PAP) with collision coverage. The policy has no endorsements. Which of the following statements correctly describes Leroy’s coverage for the rental expenses?
A. His rental expense is excluded because of the custom equipment exclusion.
B. His rental expense is excluded because he was responsible for the accident.
C. His insurer will pay the rental expenses for a maximum of 24 hours.
D. His insurer will pay the rental expenses, subject to a dollar limit, while the truck is being repaired.
2. Which of the following statements concerning a personal umbrella policy is correct?
A. One of its major advantages is the absence of any limitations or exclusions.
B. Its use is only appropriate for very high-income individuals.
C. It eliminates the need to carry separate auto and homeowners policies.
D. Family members living in the insured’s household are usually included as insureds.
3. A client with a personal auto policy (PAP) will need to purchase an additional policy if the insured vehicle is driven in which of the following areas?
A. Canada
B. Hawaii
C. Mexico
D. Puerto Rico
Explanation / Answer
Ans:
1)Option C is correct.
His insurer will pay the rental expenses for a maximum of 24 hours.
Ref:
Additional expenses paid under the personal auto policy (PAP) and the commercial auto policies. For the PAP, transportation expenses, such as rental car charges, incurred in connection with a covered comprehensive or collision loss are payable, up to a specified amount. A time-related deductible applies—for example, 48 hours when the cause of loss is theft, and 24 hours for other physical damage perils. For the business auto form, temporary transportation expenses incurred by the insured due to the total theft of a covered private passenger auto are provided, subject to a 48-hour deductible.
2)Family members living in the insured’s household are usually included as insureds.
Option D is correct.
Ref:
Persons that are covered by the umbrella policy include:
A typical umbrella policy does not cover legal liability that arises from business or professional services, because that type of coverage should be purchased separately, nor does it cover liability that arises from a breach of contract.
3)Mexico
Option C is correct.
PAP coverage applies to occurrences that take place within the United States, its territories and possessions (including Puerto Rico,) and Canada. The PAP generally does not provide coverage for vehicles operated in Mexico (although some insurers offer coverage for vehicles operating a short distance within the Mexican border).
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