Question

1. regina rents a car while her car is undergoing repairs. unless an endorsement changes the limits, reginas personal auto policy (pap) will cover her auto rental expenses up to:

○ a. $20 per day with a $500 maximum
○ b. $20 per day with a $600 maximum
○ c. $50 per day with a $500 maximum
○ d. $75 per day with a $600 maximum

1. what is the purpose of the maintenance of underlying insurance condition in a personal umbrella policy?

○ a. to ensure that a sufficient premium is paid for the coverage provided
○ b. to maintain the broadest scope of coverage possible
○ c. to prevent the insured from canceling the underlying policy to rely solely upon the umbrella policy for basic coverage.
○ d. to reduce the premiums of the umbrella policy

Explanation:

1. In a standard Personal Auto Policy (PAP) without an endorsement changing the limits, the typical rental car expense coverage is $20 per day with a $500 maximum. This is a common provision in such policies.
2. The maintenance of underlying insurance condition in a personal umbrella policy is designed to stop the insured from dropping the underlying policy (like auto or homeowners) and only using the umbrella for basic coverage. The umbrella is meant to be excess over the underlying policies, not a replacement for them.

Answer:

1. a. $20 per day with a $500 maximum
2. c. To prevent the insured from canceling the underlying policy to rely solely upon the umbrella policy for basic coverage.