9.5 Automobile Insurance

The primary reason you should purchase PAP coverage is to:

• pay for damage to your vehicle if you are involved in an accident

• pay for the liability you may cause to others if you are involved in an accident in which you are at fault

• pay for your medical expenses if you are involved in an accident

• pay for damages to your vehicle, medical expenses for yourself, or damages and medical bills you cause for others

PAP coverage follows the ____ not the ____.

• car; driver

• driver; car

• insured; car

• driver; passenger

Bonnie regularly lets her boyfriend drive her car whenever they go on a date. Yesterday, he caused an accident driving Bonnie's car. Will Bonnie's insurance company cover the accident?

• yes, because PAP coverage follows the car

• no, because her insurance company will claim that the boyfriend should have been listed as a regular driver of the car

• no, because insurance is always waived when a car is used by an unlisted driver

• yes, because Bonnie was present when the accident happened

The 50 in a 50/100/25 split limit policy refers to the maximum amount the policy will pay in:

• property damage

• medical coverage for those in your car

• medical coverage for everyone in the other car

• medical coverage coverage for one person in the other car

George was in an automobile accident. According to the police report, he was responsible for causing the wreck. The accident was large enough to close down the interstate for an hour. The three people in the other car were rushed to the hospital. The costs associated with the rescue and medical care were $18,000 for each person.

If George's PAP split limit coverage was 25/50/25, how much will the insurance company pay, in total, for the medical treatment for those in the other car?

• $18,000

• $25,000

• $50,000

• $54,000

George was in an automobile accident. According to the police report, he was responsible for causing the wreck. The accident was large enough to close down the interstate for an hour. The three people in the other car were rushed to the hospital. The costs associated with the rescue and medical care were $18,000 for each person.

How much will George's insurance company pay if George caused $75,000 in damage to the other driver's property?

• $0

• $25,000

• $50,000

• $75,000

George was in an automobile accident. According to the police report, he was responsible for causing the wreck. The accident was large enough to close down the interstate for an hour. The three people in the other car were rushed to the hospital. The costs associated with the rescue and medical care were $18,000 for each person.

George is considered to be a(n):

• uninsured motorist

• underinsured motorist

• victim of a hit and run

• felon

George was in an automobile accident. According to the police report, he was responsible for causing the wreck. The accident was large enough to close down the interstate for an hour. The three people in the other car were rushed to the hospital. The costs associated with the rescue and medical care were $18,000 for each person.

Based on the facts of the case, which of the following statements is TRUE?

I. George can expect his PAP premiums to increase in the future

II. George will be personally liable for any excess damages not covered by insurance

III. George's future liability will be exempt if he can prove that he was covered at the state insurance minimum level

• I only

• III only

• I and II only

• I and III only

Melba was involved in an automobile accident. She was found liable for $20,000 in property damages. Fortunately, she had PAP coverage with a split limit of 25/50/20, a deductible of $500, and a comprehensive deductible of $100. How much will her out-of-pocket expense be for the accident?

• $0

• $100

• $500

• $600

Which of the following is an optional coverage within a typical PAP?

• comprehensive coverage

• underinsured coverage

• liability coverage

• both comprehensive and underinsured coverage