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FIRST PUBLISH OCTOBER 2024
FIN 470 Klee Exam 2 Application
questions chapters 20, 22, 23 Questions
and Answers
Fred has a PAP with the following coverages:
Liability coverages: $100,000/$300,000/$50,000
Medical payments coverage: $5,000 each person
Uninsured motorists coverage: $25,000 each person
Collision loss: $250 deductible
Other-than-collision loss: $100 deductible
With respect to the following situation, indicate whether the loss is covered and the amount payable, if
any.
Fred's son, age 16, is driving a family car, runs a red light, and kills a pedestrian. The family of the dead
pedestrian sues and damages are awarded in the amount of $500,000 - ANSWER✔✔Covered, Fred is
covered as a member of the family. The maximum amount paid would be $100,000
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, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
Fred has a PAP with the following coverages:
Liability coverages: $100,000/$300,000/$50,000
Medical payments coverage: $5,000 each person
Uninsured motorists coverage: $25,000 each person
Collision loss: $250 deductible
Other-than-collision loss: $100 deductible
With respect to the following situation, indicate whether the loss is covered and the amount payable, if
any.
Fred borrows a friend's car to go to the supermarket. He fails to stop at a red light and negligently
smashes into another motorist. The other driver's car, valued at $15,000 is totally destroyed. In addition,
repairs to friends car are $5,000 - ANSWER✔✔Covered, damage to the other car is covered under
property damage liability for $15,000. Collision coverage, if any, on the friend's car would be primary,
and Fred's policy would be excess. If there is no collision coverage on the friend's car, Fred's policy would
be primary and would pay $4,750
Fred has a PAP with the following coverages:
Liability coverages: $100,000/$300,000/$50,000
Medical payments coverage: $5,000 each person
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, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
Uninsured motorists coverage: $25,000 each person
Collision loss: $250 deductible
Other-than-collision loss: $100 deductible
With respect to the following situation, indicate whether the loss is covered and the amount payable, if
any.
Fred's daughter, Heather, attends college in another state and drives a family auto. Heather lets her
boyfriend drive the car, and he negligently injures another motorist. The boyfriend is sued for $50,000 -
ANSWER✔✔If the boyfriend can establish a reasonable belief that permission would have been granted,
he would have coverage under Fred's policy, and $50,000 would be paid if he were legally liable
Fred has a PAP with the following coverages:
Liability coverages: $100,000/$300,000/$50,000
Medical payments coverage: $5,000 each person
Uninsured motorists coverage: $25,000 each person
Collision loss: $250 deductible
Other-than-collision loss: $100 deductible
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