Question

All State Auto Sales has a standard Garage Policy with Symbol 21 for Liability coverage. All of the following claims would be covered under All State's policy except:

(A)Sam purchases a used car from All State. A week later the fuel system malfunctions causing the car to explode, injuring a bystander who sues for $15,000 in bodily injury.

(B) Jerry purchases a new car from All State in Jacksonville. Since the car isn't in stock they send an employee to an Orlando dealer to get the car. About 125 miles north of Orlando the employee rear-ended Joe who was on her motorcycle. Joe sues All State.

(C) Jake left his truck at All State's for brake repair. They fixed the brakes and returned the truck to Jake. The next day Jake had a wreck and said it was because the brakes weren't fixed correctly. Jake sues All State for his injury.

(D) John (owns his own fully insured car) is test-driving a new car when he side-swipes another car and hurts the driver, Susie. Susie sues John. John tenders the claim to All State claiming he is covered under their policy and that All State should provide his defense. He does not want to use his carrier for fear of a premium increase.

Answer 1

All State Auto Sales' standard Garage Policy with Symbol 21 would cover claims (A), (B), and (C), but not (D).

Step-by-step explanation:

The claims that would be covered under All State Auto Sales' standard Garage Policy with Symbol 21 for Liability coverage are:

1. 
   
3. Sam purchases a used car from All State. A week later, the fuel system malfunctions causing the car to explode, injuring a bystander who sues for $15,000 in bodily injury.
4. 
   
6. Jerry purchases a new car from All State in Jacksonville. Since the car isn't in stock, they send an employee to an Orlando dealer to get the car. About 125 miles north of Orlando, the employee rear-ends Joe who was on her motorcycle. Joe sues All State.
7. 
   
9. Jake left his truck at All State's for brake repair. They fixed the brakes and returned the truck to Jake. The next day, Jake had a wreck and said it was because the brakes weren't fixed correctly. Jake sues All State for his injury.

The claim that would not be covered under All State's policy is:

1. 
   
3. John (owns his own fully insured car) is test-driving a new car when he side-swipes another car and hurts the driver, Susie. Susie sues John. John tenders the claim to All State claiming he is covered under their policy and that All State should provide his defense. He does not want to use his carrier for fear of a premium increase.