Iowa Property & Casualty Insurance License Exam — All Questions

In the Personal Auto Policy, which coverage part pays for bodily injury and property damage the insured causes to others?

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

Part A (Liability Coverage) responds when the insured is legally responsible for bodily injury or property damage to others arising out of the use of a covered auto, paying damages and providing a 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, collision coverage pays for damage to the insured's vehicle caused by:

• a.Fire, theft, and falling objects
• b.Impact with another vehicle or object, or upset of the vehicle✓
• c.Injuries to pedestrians
• d.Damage the insured causes to another car

Collision coverage pays for damage to the insured's own auto from colliding with another vehicle or object or from overturning (upset), regardless of fault. Other-than-collision (comprehensive) coverage handles losses such as fire, theft, falling objects, glass breakage, and animal strikes. Damage the insured causes to someone else's car is a liability (Part A) matter, not Part D.

Other-than-collision coverage (comprehensive) under the Personal Auto Policy would pay for loss caused by:

• a.The insured rear-ending another car
• b.The insured striking a guardrail
• c.The insured's car rolling over in a ditch
• d.A tree falling on the parked insured vehicle✓

Other-than-collision (comprehensive) coverage handles losses not caused by collision or upset, such as fire, theft, vandalism, hail, flood, glass breakage, animal strikes, and falling objects like a tree limb. Rear-ending a car, hitting a guardrail, and rolling over are all collision or upset losses covered under collision coverage, not comprehensive.

Uninsured Motorists (UM) coverage under Part C is designed to protect the insured when:

• a.An at-fault driver who caused injury has no liability insurance✓
• b.The insured damages their own vehicle
• c.The insured injures a pedestrian
• d.The insured's car is stolen

Uninsured Motorists coverage steps in when the insured is injured by an at-fault driver who carries no liability insurance (and, with underinsured motorists coverage, when the at-fault driver's limits are too low). It essentially provides the liability protection the negligent driver failed to carry. Damage to the insured's own car is handled by Part D, and injuring others is a Part A liability matter.

An auto liability limit shown as split limits of 100/300/50 means the policy will pay up to:

• a.$100,000 total for all claims combined
• b.$100,000 per accident for property damage
• c.$100,000 per person and $300,000 per accident for bodily injury, and $50,000 for property damage✓
• d.$300,000 per person for bodily injury

Split limits are read as bodily injury per person / bodily injury per accident / property damage per accident. So 100/300/50 means up to $100,000 for one injured person, up to $300,000 total for all bodily injury in one accident, and up to $50,000 for property damage per accident. A single combined single limit, by contrast, provides one total amount for both bodily injury and property damage.

The difference between underinsured motorists (UIM) and uninsured motorists (UM) coverage is that UIM applies when the at-fault driver:

• a.Has no insurance at all
• b.Has insurance, but with limits too low to cover the full injury✓
• c.Cannot be identified
• d.Is the insured's own family member

Underinsured motorists coverage applies when the at-fault driver does carry liability insurance, but the limits are insufficient to fully pay the injured insured's damages; UIM makes up part of the shortfall. Uninsured motorists coverage applies when the at-fault driver has no liability insurance or cannot be identified (such as a hit-and-run). Both protect the innocent insured from another driver's inadequate coverage.