Tom Baxter has an automobile insured by a personal auto policy. He - ProProfs Discuss
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Tom Baxter has an automobile insured by a personal auto policy. He trades in his car and purchases a new private passenger auto as a replacement vehicle. If he does not notify the insurance company, the liability coverage for his replacement vehicle will apply automatically for how long?



A. 10 days
B. 30 days
C. 60 days
D. Until the end of the policy period

This question is part of Practise Exam 1
Asked by Wyatt Williams, Last updated: Jan 08, 2020

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2 Answers

ivanchanhr

Question is unclear and the explanation of answer is wrong.
If your policy is with full coverage, you will have 14 days to find an insurance.
If your policy is with liability-only coverage, you will have 4 days to find an insurance.
You may try to get a replacement vehicle and not notifying insurance company,
once you got pull over, you will know what will happen
This is a very serious issue.
Please do not misleading people.
 1

Kelly Willy

Kelly Willy

Replied on Jul 28, 2019

There's a difference between answers for the exam and the way the real world operates. For the purposes of the exam, answer D is correct. If all coverages will remain the same (the unstated assumption in the question), then under the policy provisions of what constitutes a covered vehicle, your new vehicle is covered. For purposes of the exam, you always choose the best of the choices given - if the "real world" response isn't there, then it's not asking you a real world scenario, just a pure insurance question. You are covered when you drive replacement autos under your PAP. In real life, I'm not independently wealthy, I finance my vehicles, so my lender wants to know my binder is in place before I can sign the paperwork on that "replacement vehicle." My insurance agent knows when I'm even thinking about buying a new car. But that's not what this question is asking, it's asking about policy provisions and if one knows what constitutes a covered auto and how coverage extends when an auto is replaced, keeping all things the same except the car itself.

John Smith

John Smith

Answered Sep 20, 2016

Until the end of the policy period

Under a personal auto policy, if a newly acquired auto replaces another auto, the new vehicle automatically has the broadest coverage for liability, medical payments, and uninsured motorists coverage for any auto shown in the declarations until the end of the policy period.
 

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