North Carolina Adjuster Practice Exam

Under which circumstance would an individual's PAP coverage be most likely to apply in an accident?

1. If they were driving a company vehicle

2. If they were using their personal vehicle for personal errands

3. If they were using a friend's car without permission

4. If they were involved in a car chase

The correct answer is: If they were using their personal vehicle for personal errands

Personal Auto Policy (PAP) coverage is designed to apply when an individual is operating their own vehicle under circumstances that align with personal use. In this case, when someone is using their personal vehicle for personal errands, it falls squarely within the parameters of what the PAP typically covers. The policy is intended to provide liability coverage, as well as collision and comprehensive coverage for personal use of the insured vehicle. In contrast, driving a company vehicle typically falls under commercial auto coverage rather than personal auto policies. When using a friend's car without permission, coverage is often not provided, as the insured does not have rights to operate that vehicle legally. Being involved in a car chase usually falls outside the scope of any personal or commercial insurance, as it presents a scenario that suggests reckless behavior, potentially voiding coverage under standard auto policies. Hence, using a personal vehicle for personal errands is the most straightforward application of PAP coverage.