Personal Lines Casualty — Personal Auto, CAARP & Umbrella

Correct

The answer is D: Coverage continues, because the livery exclusion excepts share-the-expense car pools.

The Personal Auto Policy excludes liability for a vehicle used as a public or livery conveyance (carrying people for a fee), but it states that the exclusion does not apply to a share-the-expense car pool, and the same exception appears wherever the exclusion is repeated in the policy. Splitting gas costs among coworkers is a personal use, so no commercial endorsement is needed.

Reviewed in our October 2026 California fact-check.

Correct

The answer is D: Yes, because vacant land other than farm land is an insured location.

The ISO homeowners definition of insured location includes the residence premises, vacant land other than farm land owned by or rented to an insured, and land on which a dwelling is being built as a residence for an insured. The lot qualifies as vacant land, so Personal Liability applies to the hiker's suit, subject to the usual exclusions. The hiker's permission and whether the lot adjoins the residence premises do not matter.

Reviewed in our October 2026 California fact-check.

Correct

The answer is C: Defense costs are paid in addition to the liability limit.

Under the ISO homeowners form, the insurer defends a suit seeking covered damages at its own expense, even if the allegations are groundless, false or fraudulent, and defense costs are paid in addition to the liability limit. The duty to defend arises when a suit is filed and does not depend on the outcome. The insurer's duty to settle or defend ends when its limit has been used up by paying a judgment or settlement.

Reviewed in our October 2026 California fact-check.