Chapter 16: Commercial Auto Insurance
Only used by FSS Team for preparing INS Exam.
- 1.
Which of the following coverages are provided by Business Auto Physical Damage coverage?
- A.
Collision
- B.
Transportation Expenses
- C.
Comprehensive
- D.
Garagekeepers Insurance
Correct Answer(s)
A. Collision
B. Transportation Expenses
C. ComprehensiveExplanation
A, B, and C are correct. The Physical Damage portion of the Business Auto coverage form contains three principal coverages: Comprehensive, Specified Causes of Loss (a more limited type of Comprehensive coverage), and Collision. Transportation expenses are covered as part of Physical Damage coverage. Garagekeepers insurance is not included in the Business Auto coverage form.Rate this question:
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- 2.
Which portion of the Garage coverage form covers liability for damage to property of others in the insured's care, custody, or control?
- A.
Liability
- B.
Garagekeepers
- C.
Physical Damage
- D.
Both A and B
Correct Answer
B. GaragekeepersExplanation
B is correct. The Liability section of the Garage coverage form excludes liability for damage to customers' autos in the insured's custody. Coverage for this exposure is provided under the Garagekeepers section of the Garage form.Rate this question:
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- 3.
The Garage coverage form covers liability arising out of which of the following?
- A.
Ownership, maintenance, or use of covered autos
- B.
Garage operations
- C.
A trailer interchange agreement
- D.
Advertising injury
Correct Answer(s)
A. Ownership, maintenance, or use of covered autos
B. Garage operationsExplanation
A and B are correct. Trailer Interchange coverage and advertising injury are not included in the Garage coverage form.Rate this question:
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- 4.
Which of the following perils are included in the Business Auto coverage form's Specified Causes of Loss coverage?
- A.
Collision
- B.
Earthquake
- C.
Flood
- D.
Theft
Correct Answer(s)
B. Earthquake
C. Flood
D. TheftExplanation
B, C, and D are correct. Specified Causes of Loss coverage is a limited type of Comprehensive coverage. It covers fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, vandalism, or mischief, as well as sinking, burning, collision, or derailment of a conveyance transporting the covered auto.Rate this question:
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- 5.
Which of the following statements concerning Business Auto Liability coverage are correct?
- A.
It covers BI or PD caused by an accident.
- B.
It does not cover pollution losses.
- C.
It only covers sums for which the insured is legally liable.
- D.
The BI or PD must result from the ownership, maintenance, or use of a covered auto.
Correct Answer(s)
A. It covers BI or PD caused by an accident.
C. It only covers sums for which the insured is legally liable.
D. The BI or PD must result from the ownership, maintenance, or use of a covered auto.Explanation
A, C, and D are correct. This coverage pays all sums an insured legally must pay as a covered pollution cost or expense to which the policy applies as long as certain conditions are met.Rate this question:
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- 6.
Who of the following would be considered an insured under Business Auto Liability coverage?
- A.
The named insured
- B.
Others while using a covered auto with permission
- C.
The owner of a borrowed auto
- D.
Others who become liable for the conduct of an insured
Correct Answer(s)
A. The named insured
B. Others while using a covered auto with permission
D. Others who become liable for the conduct of an insuredExplanation
A, B, and D are correct. The owner of a hired or borrowed auto is not an insured for Liability coverage while using the covered auto.Rate this question:
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- 7.
Which of the following are excluded under Business Auto Liability coverage?
- A.
Liability assumed under a contract that is considered an insured contract
- B.
Damage to the insured's own auto
- C.
Injury to employees covered by workers compensation laws
- D.
Liability for property in the insured's custody
Correct Answer(s)
B. Damage to the insured's own auto
C. Injury to employees covered by workers compensation laws
D. Liability for property in the insured's custodyExplanation
B, C, and D are correct. The exclusion for liability assumed under contract or agreement does not apply to contracts that meet the policy's definition of an insured contract.Rate this question:
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- 8.
Which of the following losses would be paid under the Business Auto coverage form's Comprehensive coverage?
- A.
Gradual corrosion of the grillwork on a covered auto because of continuous exposure to salt air
- B.
Overturn of a covered auto
- C.
Collision damage to a covered auto
- D.
Theft of a covered auto
Correct Answer
D. Theft of a covered autoExplanation
D is correct. Losses from wear and tear are excluded. The other two losses are considered collision losses.Rate this question:
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- 9.
Which of the following businesses might be covered under a Garage coverage form?
- A.
Used car dealer
- B.
Catering company
- C.
Auto body shop
- D.
Service station
Correct Answer(s)
A. Used car dealer
C. Auto body shop
D. Service stationExplanation
A, C, and D are correct. The Garage coverage form is designed to cover automobile-type businesses, such as car dealerships, gas stations, and parking garages. These types of businesses cannot be covered under the Business Auto coverage form.Rate this question:
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- 10.
Which of the following coverages are included in an unendorsed Garage coverage form?
- A.
Garagekeepers
- B.
Uninsured Motorists
- C.
Liability
- D.
Physical Damage
Correct Answer(s)
A. Garagekeepers
C. Liability
D. Physical DamageExplanation
A, C, and D are correct. The Garage coverage form includes Liability, Garagekeepers, and Physical Damage coverage. Medical Payments, Uninsured Motorist, and Underinsured Motorists coverage may be added by endorsement.Rate this question:
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- 11.
Which of the following can be considered covered autos only under the Garage coverage form?
- A.
Customers' autos left with the insured for service
- B.
Autos the insured has leased to use in the business
- C.
Autos held for sale by a dealer
- D.
Autos owned by the insured and used in the insured's business
Correct Answer(s)
A. Customers' autos left with the insured for service
C. Autos held for sale by a dealerExplanation
A and C are correct. There are two covered auto symbols that are unique to the Garage coverage form. Symbol 30 is used for customers' autos left with the insured for service, repair, storage, or safekeeping. Symbol 31 is used for Physical Damage coverage only for the dealers' autos and autos held for sale by dealers, nondealers, or trailer dealers.Rate this question:
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- 12.
Which of the following Commercial Auto coverage forms does not offer liability coverage?
- A.
Business Auto
- B.
Business Auto Physical Damage
- C.
Garage
- D.
Trucker's
Correct Answer
B. Business Auto Physical DamageExplanation
B is correct. Business Auto Physical Damage covers losses to the insured's own vehicles, not losses to other's vehicles the insured might become liable for.Rate this question:
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- 13.
Which of the following would be included in an unendorsed Business Auto coverage policy? Select all that apply.
- A.
Liability coverage
- B.
Physical Damage coverage
- C.
Uninsured Motorists coverage
- D.
Medical Payments coverage
Correct Answer(s)
A. Liability coverage
B. Physical Damage coverageExplanation
A and B are correct. Uninsured Motorists and Medical Payments coverage are available only by endorsement.Rate this question:
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