INSURING PERSONAL AUTO EXPOSURES CISR ACTUAL
EXAM 100 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |AGRADE
Active Retention - ANSWER: Planned acceptance of losses to be financed internally
through the use of deductibles on insurance policies, loss-sensitive insurance plans,
and deliberate non- insurance
Add-On No-Fault States - ANSWER: Typically tort states where Personal Injury
Protection benefits must be offered, but are optional
Amendment of Policy Provisions - ANSWER: State-specific modifications to the
Personal Auto Policy
Arbitration - ANSWER: A process meant for resolving conflict outside of the court
system; typically, an agreement to settle a dispute using one or more neutral parties
(arbitrators) to assess the facts and make a determination
Attachment - ANSWER: An action filed by a plaintiff to ensure they will be paid from
property assets of the defendant if the court rules in their favor
Bail - ANSWER: A cost imposed by the court as a guarantee that if the person is
released from jail, the person promises to appear for their court date
Bail Bond - ANSWER: Way for a defendant to pay the jail to get out of jail until their
court date; usually (10%) of the bail
Bailee - ANSWER: The party to whom personal property is delivered and entrusted
(without transfer of ownership) for a specific purpose
Beneficiary - ANSWER: The party that receives a trust's assets when the trustor dies
Betterment - ANSWER: Repairing or replacing damaged parts of the vehicle (or the
vehicle itself) with better quality materials or which have higher value than like kind
or quality; the PAP does not intend to provide betterment
Choice No Fault States - ANSWER: States which allow the consumer to opt-out, in
writing, of Personal Injury Protection coverage and retain their rights to sue for
injuries; the policyholder must carry certain minimum coverage limits, and they may
sue an at-fault party for injuries sustained, regardless of severity; opting-out means
the policyholder could be sued for injuries they are responsible for causing
Compensatory Damages - ANSWER: Payment intended to compensate the injured
party(ies) for damages incurred; two categories are: (1) special damages—actual
measurable costs and (2) general damages—intangible costs such as pain and
suffering
, Coverage Territory - ANSWER: The geographical area within which insurance
coverage applies
Declarations - ANSWER: The front page (or pages) of a policy that specifies the
named insured, address, policy period, location of premises, policy limits, and other
key information that varies from insured to insured; also known as the information
page; often informally referred to as the "Dec" or "Dec page"
Damages Offset - ANSWER: Policy language which indicates that damages will be
reduced by the amount paid by the at‐fault driver's insurance
Direct Loss - ANSWER: Loss incurred due to direct physical damage to property, as
opposed to time element or other indirect losses
Financial Responsibility Provision - ANSWER: States that the policy will comply with
requirements of financial responsibility laws
Forced Placed Coverage - ANSWER: Coverage purchased by the lienholder of the
vehicle to protect the lienholder's interests when a client fails to maintain coverage
for damage to their auto; the lienholder can require the client to pay for that
coverage as part of their loan repayment; this coverage is generally more expensive
than the coverage the client can purchase, and it only protects the interest of the
lender; it does not provide coverage to the client
Gap Insurance - ANSWER: Covers the difference between the ACV of the auto and
the loan/lease balance
Gig Economy - ANSWER: Economic activity that involves the used of temporary or
freelance workers to perform jobs, typically in the service sector (Merriam-Webster's
Dictionary)
GVWR (Gross Vehicle Weight Rating) - ANSWER: Refers to the maximum weight a
vehicle is designed to safely carry according to the vehicle manufacturer and
includes the total weight of the vehicle plus passengers, vehicle fluids, accessories,
and cargo
Grantor - ANSWER: The individual who establishes a trust; also referred to as the
trustor, settlor, or creator
Indirect Loss - ANSWER: Loss resulting from the inability to use damaged property
Intrapolicy Stacking - ANSWER: Adding together the limits of multiple vehicles
insured on the policy to increase the limit available for a loss; this is generally NOT
allowed, but be sure to review your state's Amendment of Policy Provisions as some
states/jurisdictions do allow for the stacking of limits
EXAM 100 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |AGRADE
Active Retention - ANSWER: Planned acceptance of losses to be financed internally
through the use of deductibles on insurance policies, loss-sensitive insurance plans,
and deliberate non- insurance
Add-On No-Fault States - ANSWER: Typically tort states where Personal Injury
Protection benefits must be offered, but are optional
Amendment of Policy Provisions - ANSWER: State-specific modifications to the
Personal Auto Policy
Arbitration - ANSWER: A process meant for resolving conflict outside of the court
system; typically, an agreement to settle a dispute using one or more neutral parties
(arbitrators) to assess the facts and make a determination
Attachment - ANSWER: An action filed by a plaintiff to ensure they will be paid from
property assets of the defendant if the court rules in their favor
Bail - ANSWER: A cost imposed by the court as a guarantee that if the person is
released from jail, the person promises to appear for their court date
Bail Bond - ANSWER: Way for a defendant to pay the jail to get out of jail until their
court date; usually (10%) of the bail
Bailee - ANSWER: The party to whom personal property is delivered and entrusted
(without transfer of ownership) for a specific purpose
Beneficiary - ANSWER: The party that receives a trust's assets when the trustor dies
Betterment - ANSWER: Repairing or replacing damaged parts of the vehicle (or the
vehicle itself) with better quality materials or which have higher value than like kind
or quality; the PAP does not intend to provide betterment
Choice No Fault States - ANSWER: States which allow the consumer to opt-out, in
writing, of Personal Injury Protection coverage and retain their rights to sue for
injuries; the policyholder must carry certain minimum coverage limits, and they may
sue an at-fault party for injuries sustained, regardless of severity; opting-out means
the policyholder could be sued for injuries they are responsible for causing
Compensatory Damages - ANSWER: Payment intended to compensate the injured
party(ies) for damages incurred; two categories are: (1) special damages—actual
measurable costs and (2) general damages—intangible costs such as pain and
suffering
, Coverage Territory - ANSWER: The geographical area within which insurance
coverage applies
Declarations - ANSWER: The front page (or pages) of a policy that specifies the
named insured, address, policy period, location of premises, policy limits, and other
key information that varies from insured to insured; also known as the information
page; often informally referred to as the "Dec" or "Dec page"
Damages Offset - ANSWER: Policy language which indicates that damages will be
reduced by the amount paid by the at‐fault driver's insurance
Direct Loss - ANSWER: Loss incurred due to direct physical damage to property, as
opposed to time element or other indirect losses
Financial Responsibility Provision - ANSWER: States that the policy will comply with
requirements of financial responsibility laws
Forced Placed Coverage - ANSWER: Coverage purchased by the lienholder of the
vehicle to protect the lienholder's interests when a client fails to maintain coverage
for damage to their auto; the lienholder can require the client to pay for that
coverage as part of their loan repayment; this coverage is generally more expensive
than the coverage the client can purchase, and it only protects the interest of the
lender; it does not provide coverage to the client
Gap Insurance - ANSWER: Covers the difference between the ACV of the auto and
the loan/lease balance
Gig Economy - ANSWER: Economic activity that involves the used of temporary or
freelance workers to perform jobs, typically in the service sector (Merriam-Webster's
Dictionary)
GVWR (Gross Vehicle Weight Rating) - ANSWER: Refers to the maximum weight a
vehicle is designed to safely carry according to the vehicle manufacturer and
includes the total weight of the vehicle plus passengers, vehicle fluids, accessories,
and cargo
Grantor - ANSWER: The individual who establishes a trust; also referred to as the
trustor, settlor, or creator
Indirect Loss - ANSWER: Loss resulting from the inability to use damaged property
Intrapolicy Stacking - ANSWER: Adding together the limits of multiple vehicles
insured on the policy to increase the limit available for a loss; this is generally NOT
allowed, but be sure to review your state's Amendment of Policy Provisions as some
states/jurisdictions do allow for the stacking of limits
