Texas Property and Casualty License Practice Exam

Which of the following is a type of supplementary payment under a personal auto policy?

1. Bonds for appeal and bail

2. Discounts for safe driving

3. Coverage for rental cars

4. Reimbursement for gas expenses

The correct answer is: Bonds for appeal and bail

In the context of a personal auto policy, supplementary payments are additional benefits provided alongside the primary coverage, often designed to help policyholders manage costs that may arise in the event of a claim. Bonds for appeal and bail represent specific supplementary payments because they assist in covering the costs associated with legal obligations that might occur due to an accident or incident involving the insured vehicle. These payments are particularly useful in situations where the policyholder may need to secure a bail bond in a criminal case related to a vehicular accident or to appeal a court decision. The insurance policy helps mitigate financial risks connected with legal proceedings, which is an important aspect of providing comprehensive support to the policyholder during difficult times. In contrast, the other options listed do not represent supplementary payments. Safe driving discounts are incentives that reduce premiums, not payments related to a claim. Coverage for rental cars may be part of the policy's standard provisions but isn't classified under supplementary payments. Similarly, reimbursement for gas expenses is not a typical provision in personal auto policies and does not align with the concept of supplementary payments. Thus, bonds for appeal and bail correctly fit the definition of supplementary payments.