NMPCIP New Mexico Property and Casualty Insurance Producer - Set 3 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: After a serious driving violation, a court orders a driver to prove ongoing financial responsibility by having the driver's insurer file a certificate confirming that liability coverage remains in force for a specified period, with the insurer required to notify the state if coverage lapses. Which filing does this describe?

a gap coverage endorsement

a rental reimbursement endorsement

an SR-twenty-two filing

a trailer interchange agreement

Question 42: A covered auto is broken into, and a portable radar detection device left on the dashboard is stolen along with some loose cash from the console. Which of the following best explains why coverage for damage to the auto is unlikely to pay for the radar detection device?

theft losses are never covered here

the device was not permanently installed

cash losses always bar the entire claim

radar detection equipment is specifically excluded

Question 43: An employee borrows a company pickup with the owner's clear permission to run a personal errand after hours, and the truck is struck by another vehicle at an intersection, injuring a pedestrian. Under the business auto policy, what status does that employee generally hold for liability coverage on this loss?

an insured while using it with permission

excluded because the errand was personal

an insured only if listed by name

not an insured under any circumstance

Question 44: An insurer determines that repairing a damaged covered auto would cost more than the vehicle is actually worth, and it decides to declare the vehicle a total loss rather than authorize the repair. Which of the following best describes the insurer's basic obligation once that determination is made?

pay the original sticker price only

pay actual cash value up to limit

pay for repairs if the insured insists

pay the outstanding loan balance instead

Question 45: The insuring agreement under the liability portion of a personal auto policy promises to pay damages an insured becomes legally obligated to pay because of an accident involving a covered auto. Which of the following correctly names the two categories of damages that trigger this promise?

medical expenses and lost income

pain and suffering only

bodily injury and property damage

physical damage to the covered auto

Question 46: A covered auto is severely damaged in a collision, and the insurer determines the vehicle's actual cash value rather than simply paying the full cost of new replacement parts and labor. Which of the following best explains the standard the insurer applies in reaching that value?

the original purchase price the insured paid

the highest value in any price guide

the cost of a new equivalent vehicle

replacement cost reduced for depreciation and condition

Question 47: A sole proprietor buys a business auto policy for her catering company, and a claim arises when a covered van she owns is in a collision while making a delivery. Under the who-is-an-insured provision, in what capacity is she automatically treated as an insured for that covered auto?

as the named insured herself

only as a permissive user

only as an additional insured by endorsement

only if listed as a driver

Question 48: An interstate motor carrier's liability policy contains limitations that fall below what federal law requires for public protection, so the insurer attaches an endorsement obligating it to pay a public liability judgment despite those limitations, while reserving a right to seek reimbursement from the carrier. Which endorsement performs this function?

the trailer interchange endorsement

the MCS-ninety endorsement

the garagekeepers endorsement

the named driver exclusion endorsement

Question 49: An applicant owns a four-wheel passenger car used for household transportation and wants to insure it under a standard personal auto policy rather than a commercial or specialty form built for unusual vehicles. Which of the following best describes the type of vehicle this standard policy is designed to insure?

a large commercial delivery truck

a motor carrier's tractor-trailer

a privately owned passenger-type vehicle

a garage operation's customer fleet

Question 50: An insured takes time off from an hourly job to attend a hearing at the insurer's request in connection with a covered liability claim, resulting in lost wages for that day. Which of the following correctly describes how supplementary payments address this lost income?

reimbursement is never paid for lost wages

reimbursement equal to the full daily salary

reimbursement limited to salaried employees only

reimbursement up to a set daily amount

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