1. If an insured with a Personal Automobile policy has an accident in a state with mandatory Personal Injury Protection (PIP), how does the policy respond?
Answer: C
Coverage automatically is broadened to provide PIP.
In states with mandatory Personal Injury Protection (PIP), a Personal Automobile policy will automatically expand to include PIP coverage, ensuring that the insured has the necessary benefits for medical expenses and lost wages resulting from an accident.
A) The insured may apply for the additional PIP coverage within 10 days of the accident.
This option is incorrect because it implies that the insured must take action to obtain PIP coverage, which contradicts the principle of automatic coverage in states where PIP is mandated.
B) PIP coverage is provided only for medical providers in that state.
This statement is misleading as it suggests limitations on the scope of PIP coverage. While PIP is designed to cover medical expenses incurred from accidents within the state, the coverage itself is not restricted solely to medical providers in that state under a Personal Automobile policy.
C) Coverage automatically is broadened to provide PIP.
This option is correct because it accurately reflects the response of a Personal Automobile policy in states with mandatory PIP, ensuring that the insured automatically receives the necessary coverage without needing to apply for it separately.
D) Coverage remains as written.
This option is incorrect as it suggests that the existing policy terms remain unchanged, which would not be compliant with the requirements of a state mandating PIP coverage. In such states, the policy must adapt to include PIP.
Conclusion
The correct answer, "Coverage automatically is broadened to provide PIP," clearly demonstrates how the Personal Automobile policy responds in states with mandatory PIP requirements. All other options fail to reflect the automatic nature of coverage expansion or misstate the limitations of PIP, confirming that C is the definitive choice.