Texas Property and Casualty License Practice Exam

What happens if a vehicle is totaled and also covered under comprehensive coverage?

1. No benefits are paid

2. A maximum of $600 will be paid for transportation expenses

3. A full replacement cost is paid

4. Only the value of the vehicle at the time of loss is refunded

The correct answer is: A maximum of $600 will be paid for transportation expenses

Comprehensive coverage in an auto insurance policy typically helps cover damages to a vehicle that are not the result of a collision. It addresses incidents such as theft, vandalism, natural disasters, and other non-collision-related scenarios. In the case of a totaled vehicle, comprehensive coverage may provide benefits depending on the specific policy terms. When a vehicle is declared a total loss under comprehensive coverage, the insurer typically assesses the value of the vehicle at the time of the loss to determine the payout. While some policies may offer specific additional benefits such as transportation expenses, the fundamental aspect lies in how the value is determined. In this context, if transportation expenses are included as a benefit under comprehensive coverage, there may be a cap on how much can be reimbursed. The specified amount, which might be around $600, is an example of a limit that insurers often place on rental or transportation benefits. Thus, the vehicle owner would receive this maximum for any transportation needs incurred while arranging for a replacement vehicle, showing an understanding of how comprehensive coverage functions in conjunction with total loss claims. It's important to recognize that, while other options may reference aspects of total loss payouts or replacement value, they don't accurately represent the typical coverage benefits provided under comprehensive policies when a vehicle is deemed