Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's personal auto policy (PAP) includes Uninsured Motorist Property Damage (UMPD) with a limit of $10,000 and a $250 deductible. The client's car is hit by an uninsured driver, resulting in $8,000 in damage to their vehicle. How much would the UMPD coverage pay for this loss?
- A$10,000
- B$0, as UMPD only covers bodily injury.
- C$7,750
- D$8,000
Show answer & explanationAnswer & explanation
Correct answer: C. $7,750
UMPD covers property damage caused by an uninsured driver. The policy would pay the amount of the loss ($8,000) minus the deductible ($250), as long as it's within the policy limit ($10,000). So, $8,000 - $250 = $7,750.
Why the other options are wrong
- A. This is the policy limit, but the actual damage was less than the limit, and the deductible applies.
- B. UMPD specifically covers property damage; Uninsured Motorist Bodily Injury (UMBI) covers bodily injury.
- D. This is the total damage, but the deductible must be applied.
Uninsured Motorist Property Damage (UMPD)
An optional auto insurance coverage that pays for damage to the insured's vehicle or other property caused by an uninsured driver.
- Covers damage to the insured's property, not bodily injury.
- Applies when the at-fault driver has no insurance.
- Typically includes a deductible.
- Separate from Collision coverage but addresses a similar loss cause.
Memory trick: UMPD: Uninsured Mess, Pay Deductible, Get Paid.