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Hong KongTexas Personal Lines Insured Auto Practice Questions
These original scenarios test who is insured and which vehicle qualifies under a personal auto policy.
- Do not treat ‘your covered auto,’ a temporary substitute, a newly acquired auto, a non-owned auto, and a repair-shop temporary vehicle as synonyms.
- Apply the policy definition and notice conditions stated in the question, plus Texas’s specific statutory rule for qualifying repair-facility temporary vehicles.
On this page7 sections
- Question 1: Listed car, resident relative, and permission
- Question 2: Temporary substitute during repairs
- Question 3: Repair-facility loaner in Texas
- Question 4: Newly purchased second car
- Question 5: A borrowed car used every week
- Question 6: A replacement auto and a newly acquired auto
- Read the vehicle and person definitions independently
A personal auto question may hide the issue in one word: who owns the car, who is driving, why the regular car is unavailable, and whether the insurer received notice. These newly written scenarios are not recalled Pearson questions. They use common policy structures, but a real policy’s definitions and conditions control. Where Texas law creates a specific rule for a temporary vehicle loaned by a repair facility, the question says so.
- Covered auto
- A defined policy category that often includes listed autos and specified newly acquired or temporary substitute vehicles
- Insured person
- A person who fits the policy’s definition for the coverage part at issue
- Newly acquired auto
- May receive automatic coverage subject to policy definitions, notice, and time conditions
- Temporary substitute
- A non-owned auto temporarily used because a covered auto is out of normal use for a stated reason
- Texas temporary vehicle
- Repair-facility loaner meeting Insurance Code §1952.060 has specific mandatory protections
- Non-owned auto
- Can receive liability protection in certain circumstances without being a ‘your covered auto’
| Vehicle category | Typical question clue | What to verify |
|---|---|---|
| Listed auto | Named/scheduled on declarations | Policy period, coverage part, limits, and use |
| Newly acquired auto | Recently purchased or leased by insured | Definition, number of vehicles already insured, notice deadline, additional vs. replacement status |
| Temporary substitute | Regular car is disabled or unavailable | Reason and duration of substitution; policy wording |
| Repair-shop temporary vehicle | Repair facility loans car while insured auto is serviced or repaired | Statutory definition, lawful possession, user, and primary liability rule |
| Non-owned auto | Borrowed or rented vehicle not owned by household | Insured definition, permission, regular use, exclusions, other insurance |
Question 1: Listed car, resident relative, and permission
A resident relative of the named insured borrows a car listed on the declarations with permission and negligently injures another driver. The policy defines a resident relative as an insured for liability while using a covered auto with permission, and no exclusion applies. Which answer is best?
| Choice | Reasoning |
|---|---|
| A. The relative may qualify as an insured under the stated definition; liability limits and conditions still apply. | Correct. Both necessary facts—resident-relative status and permission to use the covered auto—are supplied. |
| B. Only the person named first on the declarations can ever be insured. | Incorrect. The policy definition expressly extends insured status to a resident relative in this scenario. |
| C. The relative is insured only if they own the car. | Incorrect. The car is already listed as a covered auto. The stated insured definition does not require the relative to own it. |
| D. Permission creates unlimited liability coverage. | Incorrect. Permission can establish insured status, but it does not remove policy limits or conditions. |
The item asks who is an insured, not who owns the auto or whether the relative has a separate policy. Real forms can treat named insureds, relatives, permissive users, and persons using a vehicle without permission differently. Read the definition under the coverage part at issue; a person may qualify for liability but not for every first-party benefit in the same manner.
Question 2: Temporary substitute during repairs
The named insured’s scheduled sedan is disabled after a mechanical breakdown and is at a repair shop. The insured borrows a neighbor’s similar car for two days while the sedan is unavailable. The policy defines a temporary substitute as a non-owned auto used temporarily while a covered auto is out of normal use because of breakdown or repair. What is the best analysis?
| Choice | Reasoning |
|---|---|
| A. The borrowed car may fit the temporary-substitute definition for the coverage provided by the policy. | Correct. The vehicle is non-owned, temporary, similar in use, and used because the covered sedan is out of normal use for a listed reason. |
| B. It can never be covered because only autos shown on the declarations qualify. | Incorrect. The policy definition expressly extends the relevant category to a qualifying substitute vehicle. |
| C. It is automatically a newly acquired auto because the insured began driving it. | Incorrect. Borrowing a neighbor’s car is not purchasing or leasing an auto. Temporary substitute and newly acquired concepts are distinct. |
| D. It qualifies even after the insured’s sedan returns to normal use, for unlimited future use. | Incorrect. The stated temporary reason and duration matter. Long-term or regular use can fall outside the definition and may require separate insurance. |
A substitute rule protects continuity while an insured auto is temporarily unavailable; it does not convert a neighbor’s car into a permanently covered household vehicle. The policy may require that the substitute be used with permission and that it replace a listed vehicle. Check which coverage parts extend and how other insurance applies. A mechanical breakdown itself is not necessarily a covered physical-damage loss.
Question 3: Repair-facility loaner in Texas
An insured’s personal auto is at a repair facility for an estimate. The facility loans the insured a vehicle that meets the statutory definition in Texas Insurance Code §1952.060, and the insured has lawful possession. The insured negligently causes bodily injury while driving it. What rule should the candidate apply?
| Choice | Reasoning |
|---|---|
| A. Texas law requires the personal auto policy to provide primary liability coverage for a qualifying temporary vehicle, subject to statutory and policy terms. | Correct. Section 1952.060 requires coverage for specified legal liability and requires it to be primary, not excess, for qualifying temporary vehicles. |
| B. The repair shop’s insurance must always be primary and the insured’s policy can never respond. | Incorrect. The Texas statute specifically requires the insured’s personal auto policy to provide primary liability coverage for a qualifying temporary vehicle. |
| C. The law applies to every car rented anywhere for any reason. | Incorrect. The statutory temporary vehicle is narrowly defined as a qualifying vehicle loaned or provided by an auto repair facility while the insured’s auto is there for service, repair, maintenance, damage, or estimate. |
| D. Only collision coverage is required; liability is excluded by law. | Incorrect. Section 1952.060 expressly addresses primary liability coverage for bodily injury and property damage liability, as well as specified damage to the temporary vehicle. |
This is a Texas-specific rule that overrides a common assumption that non-owned-auto liability is always excess. Check every statutory element: repair facility, the insured auto at the facility for a listed reason, lawful possession, eligible vehicle type, and use by an insured or resident relative as the statute defines. TDI explains that personal auto insurers must adapt their forms to §1952.060. Do not extend this rule to every rental car or borrowed auto.
Question 4: Newly purchased second car
The named insured buys an additional private passenger auto while already insuring one car. The policy provides automatic coverage for a newly acquired additional auto only if the insured reports it within the stated period and grants it the coverage applicable to the most broadly insured auto on the policy. The insured reports it within that period. Which answer is best?
| Choice | Reasoning |
|---|---|
| A. Apply the stated newly acquired auto clause; the additional car receives the described temporary automatic protection, subject to its conditions. | Correct. The stem gives the notice period and scope, so apply those policy terms rather than importing a different insurer’s deadline. |
| B. No coverage can exist until the insurer physically prints a new declarations page. | Incorrect. The policy expressly provides automatic coverage before the report is processed, if conditions are met. |
| C. It receives the same coverage as the least insured car, regardless of the clause. | Incorrect. This question specifies the most broadly insured auto as the comparison rule. Use the stated provision. |
| D. It is treated as a replacement auto even though the insured kept the original vehicle. | Incorrect. The facts say it is an additional auto, not one that replaces an auto the insured disposed of or stopped using. Those categories can produce different coverage. |
Newly acquired auto clauses vary, including notice periods, automatic coverage scope, and how an additional vehicle differs from a replacement. TDI’s consumer guide says newly purchased cars may be automatically covered for about 20 days and distinguishes an additional car from a replacement car, but the actual policy controls the exact deadline. Report a purchase promptly; do not rely on a remembered number.
Question 5: A borrowed car used every week
A named insured drives a coworker’s car every Friday for a recurring commute. The car is not owned by anyone in the insured’s household. The policy excludes a non-owned auto furnished or available for the insured’s regular use. The insured causes a crash while driving it. Which answer is best?
| Choice | Reasoning |
|---|---|
| A. The regular-use exclusion may bar coverage under the stated wording; frequency and availability are central facts. | Correct. The scenario supplies a recurring use pattern and an exclusion that addresses it. |
| B. Any borrowed auto is covered without restrictions because it is non-owned. | Incorrect. Non-owned status alone does not override the regular-use exclusion or other policy provisions. |
| C. The auto is covered because Friday commuting is personal use. | Incorrect. Personal purpose does not negate an exclusion based on regular availability or use. |
| D. It is automatically a temporary substitute because the insured did not own it. | Incorrect. No insured auto is stated to be out of normal use, which is often an essential element of temporary-substitute coverage. Borrowed and substitute are not synonyms. |
Non-owned-auto coverage is not blanket protection for every vehicle the insured might drive. Regular access can create a gap because the policy expects that vehicle to be insured where it is principally kept and used. Ask about household vehicles, employer vehicles, recurring borrow arrangements, and rental periods. The named insured should coordinate with the vehicle owner and insurer before relying on non-owned provisions.
Question 6: A replacement auto and a newly acquired auto
The insured trades in an older car and buys another private passenger car to take its place. The policy defines a replacement auto and states that it receives the same coverages as the replaced auto. The old car had liability only. The declarations’ other car has collision and other-than-collision coverage. Which answer follows the stated replacement provision?
| Choice | Reasoning |
|---|---|
| A. The replacement car receives the old car’s liability-only coverage under the stated clause. | Correct. The question explicitly states that the replacement auto receives the coverage carried by the auto it replaces. |
| B. It automatically receives collision and other-than-collision because another car has those coverages. | Incorrect. The stem distinguishes replacement from the policy’s broadest-car approach for an additional auto. |
| C. The insurer owes no coverage until the insured adds the VIN, despite the clause. | Incorrect. The clause states an automatic replacement-auto treatment, subject to any notice requirements also specified. |
| D. It becomes an additional auto because the insured paid money for it. | Incorrect. The old car was traded in and replaced. The transaction’s function, not the fact of purchase, determines the category under the question’s definition. |
A replacement auto can receive the old car’s coverage, while an additional auto may be treated by reference to the broadest coverage already in force, subject to the form. Notice conditions and timing still matter. TDI’s consumer guide summarizes this distinction, but the exam stem should control when it states an exact policy rule.
Read the vehicle and person definitions independently
A correct coverage analysis usually needs two separate answers: which vehicle is within the applicable definition, and which person is an insured for the particular coverage. A covered auto can be driven by someone who does not meet the policy’s insured definition. A person can qualify as an insured while using a non-owned auto, subject to limitations. Do not treat the phrase ‘covered auto’ as a universal grant for every driver, coverage part, and loss.
Pearson’s current outline includes the personal auto policy, covered autos, and who is an insured. TDI’s temporary-vehicle materials and Insurance Code §1952.060 explain the Texas repair-shop rule. Standard ISO personal-auto wording is a useful study reference, but insurers can use filed forms and endorsements that change definitions. These questions state the relevant language to keep the answer unambiguous.
A sound exam approach is to underline ownership, household status, permission, purpose, duration, and reason the regular car is unavailable. Then read the exact question: liability, collision, UM/UIM, or another part can define insured persons and vehicles differently. On a real claim, collect the declarations, form, amendments, purchase date, repair invoice, loaner agreement, and communication showing when the insurer was notified.
Common questions
Are these official Pearson questions?
No. These are original practice scenarios based on the current exam outline and official Texas sources. They are not copied from or endorsed by Pearson, and they do not predict live exam questions.
Does a Texas personal auto policy cover every repair-shop loaner?
No. Insurance Code §1952.060 applies to a specifically defined temporary vehicle loaned or provided by a repair facility under stated conditions. Confirm the facility, reason, lawful possession, vehicle, insured, and actual policy language.
Is every borrowed car a temporary substitute?
No. A temporary-substitute definition commonly requires a covered auto to be out of normal use for a listed reason. A borrowed auto used regularly, or while no insured car is unavailable, may not qualify.
How long is a newly purchased car automatically covered in Texas?
TDI’s consumer guide describes automatic coverage for about 20 days, but a policy’s definition and notice clause control the exact period and scope. Report the acquisition promptly and verify the form.