Alabama Personal Lines Insurance License Exam — All Questions

In the Personal Auto Policy, coverage for bodily injury and property damage the insured causes to others is provided under:

• a.Part B – Medical Payments
• b.Part C – Uninsured Motorists
• c.Part A – Liability Coverage✓
• d.Part D – Coverage for Damage to Your Auto

Part A (Liability Coverage) responds when the insured is legally responsible for bodily injury or property damage to others from the use of a covered auto, paying damages and providing a legal defense. Part B pays medical expenses for the insured and passengers, Part C covers injuries caused by uninsured or underinsured drivers, and Part D covers physical damage to the insured's own vehicle.

Under Part D of the Personal Auto Policy, damage to the insured's own vehicle from striking a tree is covered by:

• a.Collision coverage✓
• b.Liability coverage
• c.Medical payments coverage
• d.Uninsured motorists coverage

Collision coverage pays for damage to the insured's own auto from colliding with another vehicle or object, such as a tree, or from upset (overturning), regardless of fault. Liability coverage pays for damage the insured causes to others, medical payments covers injuries to the insured and passengers, and uninsured motorists covers injuries caused by an uninsured at-fault driver, none of which apply to the insured's own vehicle damage.

Which loss to the insured's own vehicle would be covered under other-than-collision (comprehensive) coverage?

• a.Rear-ending another vehicle
• b.Rolling the car over in a ditch
• c.Sideswiping a guardrail
• d.The vehicle being stolen from a parking lot✓

Other-than-collision (comprehensive) coverage pays for losses not caused by collision or upset, including theft, fire, vandalism, hail, flood, glass breakage, and animal strikes. Rear-ending a vehicle, rolling over, and sideswiping a guardrail are all collision or upset losses covered under collision coverage. Theft of the vehicle is a classic comprehensive loss.

Auto liability limits shown as 50/100/25 mean the policy pays up to:

• a.$50,000 total for the entire policy
• b.$50,000 per person and $100,000 per accident for bodily injury, and $25,000 for property damage✓
• c.$100,000 per person for bodily injury
• d.$25,000 per person for bodily injury

Split limits are read as bodily injury per person / bodily injury per accident / property damage per accident. So 50/100/25 means up to $50,000 for one injured person, up to $100,000 total for all bodily injury in one accident, and up to $25,000 for property damage per accident. State law sets the minimum required limits, but the way split limits are read is national.

Uninsured motorists coverage protects the insured when:

• a.An at-fault driver with no liability insurance causes the insured injury✓
• b.The insured damages their own vehicle by hitting a wall
• c.The insured injures a pedestrian
• d.The insured's vehicle is stolen

Uninsured motorists coverage protects an insured who is injured by an at-fault driver carrying no liability insurance, or who cannot be identified such as in a hit-and-run. It supplies the liability protection the negligent driver failed to carry. Damage to the insured's own vehicle is covered under Part D, and injuring others is a Part A liability matter, not uninsured motorists coverage.

Under a Personal Auto Policy, coverage generally extends to a newly acquired vehicle and to a temporary substitute auto when the insured's car is being repaired. This reflects that the policy:

• a.Covers only the one vehicle listed on the declarations, with no exceptions
• b.Covers any vehicle in the world with no conditions
• c.Provides some automatic coverage for newly acquired and temporary substitute autos✓
• d.Excludes all borrowed vehicles entirely

The Personal Auto Policy defines covered autos to include the vehicles listed on the declarations plus, within policy rules, newly acquired autos (for a limited time, sometimes requiring notice) and a temporary substitute auto used while a covered vehicle is out of service. This prevents a coverage gap when the insured changes cars or uses a loaner during repairs, though specific conditions and time limits apply.