Difficulty: Easy

Average Score: 94%

An insurer must offer rental reimbursement coverage when issuing all of the following personal auto policies EXCEPT

Rationale

A new policy that includes collision coverage.

Rental reimbursement coverage is not required for policies that only include collision coverage, as this type of coverage does not typically necessitate rental reimbursement unlike comprehensive coverage policies or those that combine both comprehensive and collision.

A (A new policy with comprehensive and collision coverage) YOUR ANSWER

This type of policy includes both comprehensive and collision coverage, making rental reimbursement necessary as it compensates for the loss of the insured vehicle's use in the event of a covered claim. Therefore, insurers are required to offer rental reimbursement with this combination of coverages.

B (A renewal policy with comprehensive coverage) YOUR ANSWER

Similar to new policies, renewal policies that include comprehensive coverage also require the insurer to offer rental reimbursement. The rationale is that comprehensive coverage often results in situations where the insured vehicle is unavailable, thus justifying the need for rental reimbursement.

D (A new policy written through the Virginia Automobile Insurance Plan) YOUR ANSWER

Policies issued through the Virginia Automobile Insurance Plan must include rental reimbursement coverage if they feature comprehensive coverage. Therefore, this option is not an exception and does not address the requirement effectively.

Conclusion

In summary, rental reimbursement coverage is required for most personal auto policies that include comprehensive coverage or any combination of comprehensive and collision. However, it is not required for policies that only include collision coverage, which makes option C the correct answer. Understanding these requirements helps clarify the conditions under which rental reimbursement must be offered to policyholders.

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