Auto Insurance Policy Flashcard

Front

Who is included in the definition of the insured in an auto insurance policy?

Back

Named insured and family members using any auto

Answer explanation

The correct choice is 'Named insured and family members using any auto' because auto insurance policies typically cover the named insured and their family members when they use any vehicle.

Front

Hannah, a 14-year-old, takes her family's car and drives it without anyone's permission. What is the coverage for Hannah in this situation?

Back

Covered as a family member

Answer explanation

Hannah is covered as a family member under the family's auto insurance policy, even though she drove without permission. Family members are typically included in coverage regardless of age or permission.

Front

What does Part A - Liability in an auto insurance policy cover?

Back

Supplementary payments at no additional cost

Answer explanation

Part A - Liability includes supplementary payments at no additional cost, which cover expenses like legal fees and bail bonds. This is the correct choice, as it does not cover intentional damage or limit to only property or bodily injury.

Front

What situation is not covered under Part A - Liability in an auto insurance policy?

Back

Intentional bodily injury by the insured

Answer explanation

Intentional bodily injury by the insured is excluded from Part A - Liability coverage, as insurance does not cover deliberate harm caused by the policyholder.

Front

Mason's auto insurance policy lists liability limits as 25/50/25. If he causes an accident and one person is injured, what is the maximum amount his insurance will pay for bodily injury to that person?

Back

$25,000

Answer explanation

Mason's policy has liability limits of 25/50/25, meaning it will pay up to $25,000 for bodily injury per person. Therefore, the maximum amount his insurance will pay for one injured person is $25,000.

Front

What does the Part A Financial Responsibility provision in an auto insurance policy address?

Back

Financial responsibility laws

Answer explanation

The Part A Financial Responsibility provision addresses financial responsibility laws, which require drivers to have a minimum level of insurance coverage to operate a vehicle legally.

Front

What happens to Kai's auto insurance coverage when driving his covered auto into a neighboring state?

Back

The policy conforms to that state's laws

Answer explanation

While driving in another state, Kai's auto insurance policy conforms to that state's laws, ensuring he has the necessary coverage as required by local regulations.

Front

Olivia owns a business and has purchased two insurance policies to cover potential losses. If a claim arises and both policies are valid, how is liability shared between the insurers?

Back

Each insurer pays their share proportionally

Answer explanation

When both insurance policies are valid, liability is shared proportionally between the insurers. This means each insurer pays a portion of the claim based on their coverage limits, ensuring fair distribution of the financial responsibility.

Front

James borrows his friend's car and gets into an accident. What is the role of James's own auto insurance policy in this non-owned vehicle accident?

Back

Excess insurer

Answer explanation

James's auto insurance acts as an excess insurer in this situation. It provides coverage only after the friend's insurance is exhausted, meaning it kicks in to cover any remaining costs after the primary coverage is used.

Front

Which part of auto insurance covers medical expenses for injuries regardless of fault?

Back

Injuries regardless of fault

Answer explanation

The correct choice is 'Injuries regardless of fault' because this part of auto insurance, often called personal injury protection (PIP), covers medical expenses for injuries sustained by the insured, regardless of who caused the accident.