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1. What are California's compulsory minimum personal auto liability split limits?

Vehicle Code §16056 sets California's compulsory minimum personal auto liability split limits at $15,000 per person bodily injury, $30,000 per accident bodily injury, and $5,000 per accident property damage. These are floor amounts only; carriers and producers may write higher limits and typically recommend doing so.

2. Under the Personal Auto Policy, which Part provides Uninsured and Underinsured Motorist coverage?

Part C of the Personal Auto Policy is Uninsured Motorist and Underinsured Motorist coverage. Part A is third-party liability, Part B is first-party Medical Payments, and Part D is Damage to Your Auto (collision and comprehensive).

3. An insured strikes a deer on a rural California highway, damaging the front of the vehicle. Under the Personal Auto Policy, this loss is paid under:

Although hitting an animal feels like a collision, the Personal Auto Policy classifies impact with a bird or animal as an Other Than Collision (Comprehensive) loss under Part D. This usually means the lower comprehensive deductible applies rather than the collision deductible.

4. Under California Insurance Code §11580.2, how must an insured reject Uninsured Motorist coverage that the insurer is required to offer?

California Insurance Code §11580.2 requires every personal auto insurer to offer UM coverage at limits equal to the liability limits. The insured may reject UM or select lower limits only by signing a written waiver. Without such a signed writing, UM is in force at the liability limits by operation of law.

5. Under Proposition 103, California personal auto insurers must give greatest weight, in order, to which three primary rating factors?

Insurance Code §1861.02(a), enacted by Proposition 103 in 1988, requires personal auto rates to give greatest weight, in this order, to the insured's driving safety record, annual miles driven, and years of driving experience. Optional factors (vehicle type, garaging location, marital status, persistency, academic record) may be used only after these three primary factors.

6. Proposition 103 makes California a 'prior approval' state for auto insurance rates. What does this mean?

Insurance Code §1861.05, the rate provision of Proposition 103, makes California a prior approval state. Any rate change must be filed with the California Department of Insurance and receive approval BEFORE it can be implemented. This is distinct from 'file and use' or 'use and file' states.

7. California Vehicle Code §16028 requires a driver to do which of the following with proof of financial responsibility?

Vehicle Code §16028 requires every driver to carry evidence of financial responsibility in the vehicle and to produce it on demand of a peace officer or following an accident. Driving without proof on hand is itself an offense even if a policy is technically in force. The insurance ID card issued by the carrier is the standard form of proof.

8. An insured uses her personal vehicle on weekends to deliver pizza for a third-party app, with no endorsement on her Personal Auto Policy. While carrying a paid delivery she rear-ends another car. The PAP carrier most likely:

The Personal Auto Policy Part A excludes liability arising from use of the vehicle while carrying persons or property for a fee, which includes app-based food and parcel delivery work. Without a delivery or rideshare endorsement, the PAP carrier will deny the claim, leaving the app's commercial coverage (if any) as the only potential source.

9. Under California's Transportation Network Company (TNC) framework, which best describes 'Period 1'?

California TNC law breaks the driver's exposure into three periods. Period 1 is when the app is on and the driver is waiting for a request. Period 2 is from accepting a request until pickup. Period 3 is from passenger pickup until passenger drop-off. The PAP usually excludes Periods 2 and 3 and often Period 1 too without a TNC endorsement.

10. Which statement about the California Low Cost Automobile Insurance Program (CLCA) is TRUE?

CLCA, created under Insurance Code §11629.7 et seq., is an income-eligible, good-driver, liability-only program administered through the California Automobile Assigned Risk Plan (CAARP). Its dollar limits are lower than the standard 15/30/5 but it is statutorily deemed to satisfy the financial responsibility requirement. Drivers must be at least 19. CLCA does not cover collision or comprehensive losses.

11. An insured carrying $100,000/$300,000 UIM limits is injured by an at-fault driver carrying only $30,000/$60,000 in liability. The insured's own medical and wage loss exceeds $80,000. Under California UIM, what must occur before the insured can collect from her own UIM?

California UIM under Insurance Code §11580.2(p) is a 'difference in limits' coverage. The injured insured must first exhaust the at-fault driver's liability limits; UIM then pays the gap between the at-fault limits and the insured's own UIM limits, up to the actual loss. California is NOT an 'excess over' UIM state.

12. Which coverage in the Personal Auto Policy is a first-party, no-fault coverage that pays reasonable medical expenses for the insured and occupants regardless of who caused the accident?

Part B Medical Payments is a small first-party, no-fault coverage in the PAP that pays reasonable medical expenses incurred by the named insured, family members, and other occupants of the covered auto, regardless of fault. Part A is third-party liability, Part C requires an uninsured at-fault driver, and Part D pays for physical damage to the insured's vehicle.

13. Who is automatically included as a named insured on a Personal Auto Policy by definition, even if not separately listed on the declarations page?

The ISO PAP definitions extend named insured status automatically to the spouse of the named insured who resides in the same household. Resident family members and permissive users are covered, but they are not 'named insureds' — they are insureds under the policy. Non-resident family members and business partners are not automatically covered.

14. An insured's parked vehicle is broken into overnight; a window is smashed and a laptop is stolen from the back seat. Under the Personal Auto Policy, the broken glass is paid under which coverage?

Glass breakage and theft of the vehicle (or vandalism damage to the vehicle) are classic Other Than Collision (Comprehensive) losses under Part D. Note that the laptop is personal property, not part of the vehicle, and would not be covered by the auto policy at all — it would fall to a homeowners or renters policy.

15. Stacking of Uninsured Motorist limits in California is best described as:

Under California's UM framework, 'stacking' (adding UM limits across multiple vehicles or multiple policies) is generally prohibited. The insured cannot multiply UM coverage by simply adding extra vehicles on the same policy or by holding multiple policies. Limits apply per accident at the level shown on the declarations.

16. An insured backs out of her driveway and strikes her neighbor's parked car. Under the Personal Auto Policy, the damage to the INSURED'S OWN vehicle is paid under:

Damage to the insured's own vehicle from impact with another vehicle or object is paid under Collision coverage in Part D, subject to the collision deductible. The damage to the NEIGHBOR'S vehicle (third-party property) is paid by the insured's Part A liability coverage.

17. A 'newly acquired auto' under the Personal Auto Policy:

The PAP extends automatic coverage to a newly acquired auto, but the insured must report the acquisition to the insurer within the policy's stated time period — typically 14 days for some coverages and up to 30 days for others, depending on the form. Failing to notify the insurer in time can leave physical damage coverage in particular unenforceable on the new vehicle.

18. Which Part of the Personal Auto Policy contains the general provisions such as territory, transfer of interest, cancellation, and termination?

Part F is the General Provisions of the PAP. It includes policy territory (United States, its territories or possessions, Puerto Rico, and Canada), the prohibition on transfer of interest without insurer consent, two-vehicle and multi-vehicle clauses, cancellation procedures, and termination.

19. Which of the following is a duty owed by the insured to the insurer AFTER an accident or loss, as required by Part E of the Personal Auto Policy?

Part E – Duties After an Accident or Loss – requires the insured to (1) promptly notify the insurer of how, when, and where the accident or loss happened, (2) cooperate in the investigation, settlement, and defense of any claim, (3) submit to examination under oath when required, and (4) authorize the insurer to obtain medical and other records. Failure to perform these duties can void or limit coverage.

20. Which of the following losses would be EXCLUDED under the Personal Auto Policy Part A (Liability)?

Part A of the PAP excludes intentional acts. Liability insurance exists to fund unintended, accidental losses; intentional damage caused out of road rage is not covered, even if the loss is to a third party. Negligent acts, permissive use, and lawful lane changes that lead to accidents are exactly the kinds of unintended losses Part A is designed for.

21. An insured chooses California's minimum liability limits of 15/30/5 and does not sign a written waiver of Uninsured Motorist coverage. At what UM limits does the policy take effect by operation of law?

Insurance Code §11580.2 requires UM coverage to be offered at limits equal to the liability limits. The insured may select lower UM limits or reject UM entirely, but only by signing a written waiver. With no waiver in the file, UM defaults to the same limits as the liability coverage — here, the chosen $15,000/$30,000.

22. A friend borrows the named insured's covered auto with permission and causes an at-fault accident, injuring a third party. Under the Personal Auto Policy:

Under Part A of the PAP, an 'insured' includes any person using the covered auto with the named insured's permission. A friend who borrows the vehicle with permission is therefore an insured for liability, and the policy will respond to the third party's claim subject to policy limits. The friend's own auto policy may also respond as excess.

23. California law generally treats 'diminished value' (the loss in a vehicle's market value after a high-quality repair) under a first-party physical damage claim as:

Under California first-party property/auto principles, the insured's collision claim against her own insurer pays the cost of repair or actual cash value, and diminished value (the residual loss in resale value after repair) is generally not recoverable in that first-party claim. Diminished value may, in some circumstances, be pursued against the at-fault third party in tort, but not from the insured's own collision coverage.

24. An insured's vehicle is damaged in a covered collision. The cost to repair plus the salvage value of the wreck exceeds the vehicle's actual cash value. Under the Personal Auto Policy, the loss is most appropriately handled as:

When the cost to repair plus the salvage value of the damaged vehicle exceeds its actual cash value (ACV), the vehicle is treated as a constructive total loss under Part D. The insurer pays the ACV (less the applicable deductible) and takes ownership of the salvage. This avoids wasting money on uneconomic repairs.

25. An insured's vehicle is in the shop for two weeks after a covered collision. Which optional Personal Auto Policy coverage would pay for a rental car during the repair period?

Transportation Expense (rental reimbursement, sometimes labeled 'loss of use') is an optional Part D add-on that pays a daily amount toward a rental vehicle while the insured's covered auto is out of service due to a covered loss. Towing and labor coverage pays only for the tow itself, not the rental. Medical Payments and Comprehensive do not pay for rental cars.

26. Which of the following is the BEST example of a use that is excluded by the Personal Auto Policy and would NOT be covered without a special endorsement?

Part A excludes use of the vehicle in any organized racing or speed contest. Daily commuting to a regular job, vacation driving, and ordinary household errands are exactly the personal uses the PAP is priced and designed to cover. A track-day endorsement or specialty motorsport policy would be needed for racing.

27. A California driver is hit by a driver who has fled the scene and was never identified, and the victim suffers bodily injury. Which Personal Auto Policy coverage is most likely to respond to the victim's bodily injury claim?

Under California Insurance Code §11580.2, a hit-and-run driver who cannot be identified is treated as an 'uninsured motorist,' and the victim's own UM Bodily Injury coverage in Part C is designed to respond to the bodily injury claim, subject to physical contact and corroboration requirements set out in the statute.

28. Which of the following is a permissible OPTIONAL rating factor for personal auto in California, used only AFTER the three mandatory primary factors?

Under Insurance Code §1861.02 and 10 CCR §2632.5, the three MANDATORY primary rating factors, in order, are driving safety record, annual miles driven, and years of driving experience. Vehicle type/make/model is one of the permitted optional secondary factors that may be used only after the three primaries are given greatest weight. Prohibited factors include credit history and ZIP code as a standalone primary.