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RMIN 4000 Exam 3|98 Questions with Accurate Answers
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RMIN 4000 Exam 3|98 Questions with Accurate Answers
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RMIN 4000 Exam 3|98 Questions withAccurate Answers
Five general types of coverage - -1. Liability: your liability to a 3rd party for
property damage (PD) or bodily injury (BI)
2. Damage: damage to your vehicle
3. Uninsured motorist: 3rd party without insurance causes BI to you or your
passengers
4. Medical payments: BI to you or your passengers
5. Convenience coverage: towing, rental reimbursement, etc.
- Personal Auto Policy (PAP) - -3rd party coverages (payments to someone
else):
o Part A: Liability Coverage (required by state)
1st party coverages (payments to you):
o Part B: Medical Payments Coverage
o Part C: Uninsured Motorists Coverage
o Part D: Coverage for Damage to Your Auto
Other provisions:
o Part E: Duties after an Accident or Loss
o Part F: General Provisions
What vehicles are covered
o Any vehicle shown in the declarations
o A newly acquired vehicle (notify insurer ASAP, definitely within 14 days)
o A trailer owned by the named insured
o A temporary substitute vehicle, which is a nonowned auto or trailer used
temporarily because of mechanical breakdown, repair, servicing, loss, or
destruction of a covered vehicle
- Part A: Liability Coverages - -· Required by state law
· There is a duty to own, maintain and operate your vehicle in a manner that
does not injure others or damage their property.
· If you fail in that duty - even accidentally - you are responsible for injuries /
damages to others.
· Protects a covered person against a suit or claim arising out of the
ownership or operation of a covered vehicle
o Bodily injury to another person
Damage to someone else's property
- Part A: Who is covered? - -o The named insured and any resident family
member
o Any person using the named insured's covered auto with permission
o Any person or organization legally responsible for any insured's use of a
covered auto on behalf of that person or organization
,○ Ex: Employer is sued if you get in an accident while on a work trip
○ Does not apply if you're driving a company car
- Part A: Relevant Exclusions (from Coverage) - -o Intentional injury or
damage
o Property owned or transported by the insured
o Property rented, used, or in the insured's care (equipment rental)
o Use as a public or livery conveyance (Uber!)
o Using a vehicle without reasonable belief the person is entitled to do so
o Vehicle with fewer than four wheels
Vehicle furnished for the named insured's regular use
- Part A: Limits - -o Split limits: limits for BI per person, BI per accident, and
PD are stated separately (BI pp/BI pa/PD)
o *****Minimum limits in GA: 25/50/25 (Know these for Exam!)*****
○ $25,000 BI per person
○ $50,000 BI per accident
○ $25,000 PD per accident
o Is this enough? If you have insufficient liability limits...
○ Seize assets
○ Garnish up to 25% of wages
Example
o Joe only has liability coverage on his auto policy, with limits of 10/30/25.
o Joe is responsible for the following car accident:
o Other Car:
○ Driver injuries: $7,000 -> pays $7,000
○ Passenger 1: $20,000 -> pays $10,000 (capped at BI pp)
○ Passenger 2: $11,000 -> pays $10,000 (caped at BI pp)
○ Damage to Car: $22,000 -> pays $22,000
o Joe's Car:
○ Injuries to Joe: $4,000 -> NOT COVERED BECAUSE JOE IS AN INSURED
○ Injuries to Joe's Passenger: $5,000 $5,000 -< assuming not a family
member, would pay $,000. BUT ins already paid $27,000 in BI limits and max
is $30,000. So only pays $3,000
○ Damages to Joe's Car: $10,000 -> NOT COVERED BC JOE IS AN INSURED
- Defense Costs - -o Defense costs can be huge. Good thing the Liability
Section covers loss IN ADDITION to the policy limits.
o This means that the costs of defense will not erode the coverage limits
available for payment of claims.
But, the duty to defend ENDS when limits have been exhausted through
actually payment of claims.
- Part A: Out-of-State Coverage - -· If you have minimum limits in your state
and you get in an accident in another state with higher minimum limits the
PAP automatically provides higher limits.
, - Part B: Medical Payments - -· Covers all reasonable medical and funeral
expenses incurred by an insured in an accident
· The named insured and family members are covered:
o While occupying any motor vehicle, or
o As pedestrians when struck by a motor vehicle
· Other persons occupying a covered auto are covered, but only in an owned
vehicle
· Usually low limits (~$5,000)
Part B: What's the Point?
o This pays regardless of fault.
o Pays some medical costs of driver, even if it is driver's negligence.
o It may be difficult to determine fault at time of accident, this will provide
initial treatment.
o Once fault is determined, amounts usually paid out of the negligent
party's Part A.
- Difference between Part A and Part B - -o Do not mistake Part B Med Pay
with paying Medical Expenses for Bodily Injury in Part A.
o Part A will pay for Medical Expenses (and Loss of Income, etc.) to OTHERS
IF YOU ARE LIABLE because of negligence.
Part B will pay for Medical Expenses REGARDLESS OF FAULT but only for
NAMED INSURED & Family Members, as well as, anyone occupying the
Covered Vehicle.
- Part C: Uninsured Motorists Coverage - -· Uninsured motorists coverage
pays for the bodily injury caused by an uninsured motorist
o The uninsured motorist must be legally liable
o Limit for any single accident is the amount shown in the declarations
· Underinsured motorists coverage can be added to the PAP to provide more
complete protection
In general, the maximum amount paid is the underinsured motorist's
coverage limit stated in the policy less the amount paid by the negligent
driver's insurer
- Part C: Why do we need this? - -o A compulsory insurance law requires
motorists to carry at least a minimum amount of liability insurance before
the vehicle can be licensed or registered.
o The purpose of the law is to provide greater protection against uninsured
drivers because motorists must provide evidence of financial responsibility
before an accident occurs.
- Part C: Who is an "uninsured motorist?" - -· A motor vehicle or trailer for
which no bodily injury liability insurance policy applies at the time of the
accident
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