Other Than Life (OTL) Practice Exam

When is the insured entitled to Loss of Use by Theft coverage?

1. When Third Party Liability coverage is purchased

2. When a special endorsement is purchased

3. If he has Physical Damage coverage

4. When the whole vehicle or parts are stolen

The correct answer is: If he has Physical Damage coverage

The insured is entitled to Loss of Use by Theft coverage when he has Physical Damage coverage. This is because Loss of Use coverage is typically a supplemental feature that provides compensation for rental or other expenses incurred while the insured vehicle is not available due to a covered loss, such as theft. Physical Damage coverage includes both comprehensive and collision protection, which ensures that the insured is financially protected from damages or losses to the vehicle itself. In scenarios where a theft occurs, if the insured has Physical Damage coverage, it activates the Loss of Use coverage, allowing for claims related to the inability to use the vehicle while repairs or replacements are arranged. This connection emphasizes the importance of having Physical Damage coverage to qualify for additional benefits related to the theft of the vehicle. Other options do not provide a direct path to Loss of Use by Theft coverage. For example, Third Party Liability coverage relates specifically to protection against claims from other parties for bodily injury or property damage, while a special endorsement refers to optional policy additions that might not explicitly include Loss of Use benefits. The last option about the vehicle or parts being stolen addresses the event triggering coverage but does not clarify the necessary policy provision that must be in place to benefit from Loss of Use.