Unit 9 - Personal Auto Insurance

In automobile insurance, the term supplementary payments refers to payments __________________________

covering reasonable expenses incurred at the insurer's request and other specified expenses that are not subject to the policy limit.

Miscellaneous type vehicle endorsement

covers recreational vehicles as well as motorcycles, motor homes, all-terrain vehicles (ATVs), dune buggies, and similar vehicles that otherwise are excluded by the policy.

Collision

defined as the impact of an auto covered by the policy with another object or vehicle, or the upset of a vehicle (overturned vehicle)

Part E - Duties after an accident or a loss

details the duties of insured following a loss

Part F- General Provisions

establishes conditions for the coverage and describes the duties and obligations of the insured and insurer

Part C - Uninsured Motorist Coverage

this coverage indemnifies the insured for bodily injury only as a result of an accident with a legally liable uninsured motorist; includes a hit-and-run

Supplementary (Additional) Payments

-Bonds: premiums for appeal and bail bonds (up to $250) -Loss of earnings: up to $200 per day for loss of insured's earning only because of attendance at hearings or trials -interest: interest on judgements while in appeal -expenses: insured's reasonable expenses for attending court

4 conditions that must be met for a loss to be covered under Part C - Uninsured Motorists Coverage

1. The loss must be caused by an auto accident and involve bodily injury (in most states) 2. The loss must be sustained by an insured 3. The insured must be legally entitled to recover from BI damages 4. The other vehicle must meet the definition of an uninsured vehicle

3 conditions that must be met for a loss to be covered under Part A - Liability Coverage

1. The person involved must be an insured 2. The insured must be legally responsible 3. Damage must involve BI or PD and result from an accident

How are liability limits expressed?

As a series of 3 numbers, such as 25/50/25. This means that the policy will pay: $25,000 per person for bodily injury $50,000 per accident for bodily injury; and $25,000 per accident for property damage

Part A - Liability Coverage

Covers damages for bodily injury or property damage that an insured becomes legally responsible for because of an auto accident

Liability coverage is provided on a ___________________ basis

Split limits

How much will the personal auto policy pay for a rental car if the insured vehicle is stolen?

The PAP provides that if an insured's vehicle is stolen, and he has comprehensive insurance, the insurance company will pay $20 per day up to a maximum of $600 for a rental car. This coverage starts 48 hours after the theft.

No-fault laws

The law that provides that each party must accept responsibility for his own losses and must recover losses from his own insurer

Subrogation

When a company pays the insured for a loss for which some person other than the insured is responsible, the insurer has the right to recover its loss from the negligent party. The insured must reimburse or hold in trust for the insurer any recovered damages the insured collects after the insurer has made payment

Bodily Injury

includes bodily harm, sickness, or disease, including death; covers injuries caused by the insured including medical expenses, lost wages,, and pain and suffering

Temporary substitute automobile

is one used with the owner's permission as a substitute vehicle for the insured's covered auto while that auto is out of normal service because of breakdown, repair, servicing, loss, or destruction.

Part A Limits of Liability

is the most the company will pay for all damages resulting from any one auto accident, regardless of the number of insured's, claims filed, vehicles or premiums listed in the declarations, or vehicles involved in the accident.

Financial Responsibility law

law in each state that requires proof of financial responsibility if in an accident. Failure to provide proof may result in loss of license and/or vehicle registration. Each state requires a minimum limit, such as 25/50/10, or $25,000 bodily injury per person, $50,000 bodily injury per accident, and $10,000 property damage per accident.

Part D - Coverage for Damage to your Auto

pays for direct and accidental loss to the named insured's covered auto or any nonowned auto against loss caused by collision or other than collision ( OTC or comprehensive) does not cover personal property in the vehicle

Property damage

physical injury to, destruction of, or loss of use of TANGIBLE property; covers damages caused by insured including: damage to another vehicle, damage to a building, damage to a wall or fence

Part B - Medical Payments coverages

provides protection for the named insured, family members, and passengers in the named insured's auto for injuries received in an accident, regardless of who was at fault. It is not a form of liability coverage for injuries sustained by passengers in another auto involved in an accident with the insured

Medical payments coverage has a _________ limit of liability

single; typical limits are $1000, $2000, $5000, or $10,000

Other than Collision (Comprehensive)

this coverage pays for almost every other type of direct, accidental loss to the vehicle that is not specifically excluded by the policy. These perils are specifically listed in the policy as being other than collision losses: -missiles or falling objects -fire -theft or larceny -explosion or earthquake -windstorm -hail, water, or flood -malicious mischief or vandalism -riot or civil commotion -contact with a bird or animal -breakage of glass