INS 23 Assignment 8: Commercial Auto Insurance

According to ISO Commercial Lines Manual Rules, auto dealers, trailer dealers, and other land motor vehicle dealers are the only organizations eligible for this. Because the business of dealers involve both the sale and serve of autos and trailers, their general liability and auto liability exposures are sometimes difficult to separate. It provides the equivalent of commercial general liability insurance and business auto insurance in a single coverage form

Auto Dealers Coverage Form

used to insure the auto loss exposures of any organizations that are not motor carriers or auto or trailer dealers. In addition to providing liability insurance, it includes optional provisions for insuring physical damage to autos owned, leased, or hired by the named insured.

Business Auto Coverage Form

policy limit

Commercial auto liability premium tables list premiums for private passenger autos by rating territory and by

a light truck operating over any distance

For commercial auto insurance, a truck, tractor, or trailer is non-zone rated if it is..

the current age of the vehicle

In deterring the commercial auto base premiums for zone rate autos, insurers consider the vehicle's cost new, the type of vehicle, the chosen deductible, the geographical zone, and..

included in the auto coverage forms. Can be used to insured any person or organization providing transportation by auto in furtherance of a commercial enterprise.

Motor Carrier Coverage Form

applying the primary factor to the base premiums

Physical damage and liability premiums are calculated for zone rated vehicles by doing which one of the following

Coverage is provided for any auto, plucking autos owned by the named insured, autos the named insured hires or borrows from others, and other non owned autos used in the insured's business. Provides the best protection for the insured. Ordinarily, this symbol is used for liability coverage only

Symbol 1- Any Auto

can be used for signaling any coverages under the BACF

Symbol 19- Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Motor Vehicle Insurance Law Only

Coverage applies to all autos owned by the named insured. Can be used for signaling any coverages under the BACF. However, when it is used to signal liability coverage, it also includes trailers the named insured doesn't own while attached to power units owned by the named insured. Doesn't cover hired or borrowed autos or other autos the named insured doesn't own

Symbol 2- Owned Autos Only

Coverage is provided only for private passenger autos owned by the named insured. Can be used for signaling any coverages under the BACF. This symbol doesn't include trucks or buses owned by the named insured or any kind of auto not owned by the named insured

Symbol 3- Owned Private Passenger Autos Only

Coverage indicates that coverage is provided for all autos owned by the named insured except private passenger autos. Can be used for signaling any coverages under the BACF

Symbol 4- Owned Autos Other Than Private Passenger Autos Only

only entered on the Personal Injury Protection or added PIP line of the declarations. It's provides PIP coverage only for those autos that are required by law to have it

Symbol 5- Owned Autos Subject to No-Fault

used only for uninsured motorists coverage. It indicates that coverage is provided only for autos that are required by law to have uninsured motorists coverage

Symbol 6- Owned Autos Subject to Compulsory Uninsured Motorists Law

if this is used, coverage applies only to those autos specially described in the policy and for which a premium is shown in the policy. Can be used for signaling any coverages under the BACF. It also includes, for liability coverage only, any trailer not owned by the insured while it is attached to one of the covered power units

Symbol 7- Specially Described Autos

Provides coverage only for autos leased, hired, rented, or borrowed by the named insured. It doesn't cover autos leased, hired, rented, or borrowed from the named insured's employees or family members. Normally only used for liability and physical damage coverage

Symbol 8- Hired Autos Only

used only for signaling liability coverage, provides covered autos stats for autos not owned, leased, hired, or borrowed by the named insured while such autos are used in connection with the named insured's business.

Symbol 9- Nonowned Autos Only

Respondeat Superior- also referred to as vicarious liability

The rule of placing liability on the employer. Based on the fact that the employee was acting on behalf of the employer at the time of the loss.

Symbol 7- specifically described autos

What BACF symbols requires that the insured notify the insurance company within 30 days of acquiring a new auto of the same type already insured for coverage to apply?

symbol 2- owned autos only symbol 8- hired autos only symbol 9- nonowned autos only

What correctly indicates the 3 business auto coverage form symbols that combined are equivalent to symbol 1?

the vehicle's original cost new and the rating territory

What set of information is used in private passenger auto premium calculations for commercial auto physical damage?

Symbol 7- Specifically Described Autos

What symbol requires that the insured notify the insurance company within 30 days of acquiring a new auto of the same type already insured for coverage to apply?

comprehensive

an animal damaged the interior of an insured's automobile while it was parked with the windows down. What type of physical damage coverage under the BACF would cover this loss?

employers nonownership liability

an employer's liability for its employees' operation of their autos in the employer's business

if symbols 1-6 or 19 are used, newly acquired autos of the type indicated by the symbol are automatically covered. The insurer will learn of newly acquired autos at the end of the policy period, and the insured will pay the additional premium. If symbol 7 is used, newly acquired autos are covered from teh time of acquisition only if the insurer insures all autos owned by the named insured, or the newly acquired auto within 30 days after the acquisition.

contrast the coverage for newly acquired autos provided by symbols 1-6 or 19 with that provided by symbol 7 in the BACF

garagekeepers coverage

coverage for damage to customer's autos left in the namedi nsured's care while the insured is attending, servicing, repairing, parking, or storing them

- the actual cash value of the property at the time of loss - the cost of repairing and replacing the proeprty with other property of like kind or quality

describe the BACF's determination of the most the insurer will pay for a physical damage loss

-medical and rehabilitation expenses - income loss benefit - substitute services benefit - death benefits to survivors

describe the benefits provided by a typical personal injury protection endorsement to a BACF

is for reasonable and necessary medical and funeral expenses incurred by a person injured by an auto accident. The coverage applies regardless of fault

describe the coverage provided by the auto medical payments insurance available by endorsement to the business auto coverage form

covers any person injured by a legally liable uninsured motorist while riding in an auto insured under the policy. Benefits are paid to the injured person by his or her own insurer

describe the coverage provided by uninsured motorists insurance in the BACF

- pay to repair or replace the property - return the property at the expense of the insurer and repair any damage caused by theft - keep all ofthe property and pay an agreed or appraised value

describe the insurer's loss payment options with regard to damaged or stolen property under the business auto coverage form

subrogation entails the insured's right to recover a loss from some other party, usually because the other party caused the loss. if the insurer pays the loss, it is entitled, under this condition, to take over the insured's right of recovery from the other party

describe the insurer's right known as subrogation

are to decrease in or loss of the auto's value and lossof use of the auto until it can be repaired or replaced

describe the main consequences of damage to or destruction of an auto from the perspective of the auto's owner

endorsements are commonly used to add coverages, to designate additional insureds, to add or omit exclusions, and to bring standard coverage forms into conformity with state insurance regulations

describe the purpose for adding endorsements to the commercial auto coverage forms

auto medical payments coverage personal injury protection coverage uninsured motorists coverage

describe the various commercial auto coverages that cover personal loss exposures arising from auto accidents

the named insured is an insured for any covered auto. anyone other than the named insured is an insured while using with the named insured's permission a covered auto owned, hired, or borrowed by the named insured, subject to certain restrictions

describe who is an insured under the BACF

are multiplied by the combined factors (sum of primary and seconardy factors). Base liability premiums are determined on the basis of the policy limit and the territory in which the auto is principally garaged. Base physical damage premiums are determined on the basis of the vehicle's age and its cost new

explain how base liability premiums and base physical damage coverage premiums are determined for non-zone rated vehicles

after the primary factor has been determined for the zone rated vehicle, its physical damage and liability premiums are calculated by appying the primary factor to base premiums. Secondary factors are not used for zone rate autos. Base premiums for zone rated vehicles are affected by various geographical zones in which the vehicles are operated because liability and collision losses are more liekly in metropolitan areas than on the open road. Base physical damage premiums depend on the vehicle's cost new, the current age of the vehicle, the type of vehicle, and the chosen deductible.

explain how base premiums and base physical damage premiums are determined for zone rated vehicles

the business auto coverage form uses numerical symbols to indicate covered autos. One or more of these numerical symbols are entered beside each coverage listed in the policy schedule to indicate which types of autos are covered

explain the numberical symbol system used to indicate the covered autos for the various coverages available under the business auto coverage form

insures direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn

explain what is included in the BACF's collision coverage

insures direct or accidental loss or damage to a covered auto by any peril except collision or overturn or a peril specifically excluded

explain what is included in the BACF's comprehensive coverage

include direct and accidental loss caused by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, or loss resulting from the sinking, burning, collision, or derailment of a conveyance trapsorting the covered auto

identify examples of perils insured under the BACF's specified causes of loss coverage

- tapes, records, discs, or similar devices - radar detectors, laser detectors, and similar devices - any equipment, regardless of whether it is permanently installed, that reproduces, receives, or transmits audio, visual, or data signals - any accessories used with the previously described equipment

identify examples of the types of electronic equipment excluded under the BACF

any employee may use his or her own auto to further an employer's business. Another example is when an organization hires autos from other organizations for terms ranging from a few hours to a number of years. Whatever the period of time. the hiring organization can be held legally liable for injury that results from the vehicl'es operation.

identify situations in which an organization can become liable for injury or damage to others that results from the use of autos it does not own

1- any auto 2- owned autos only 3- owned private passenger autos only 4- owned autos other than private passenger autos only 5- owned autos subject to no-fault 6- owned autos subject to a compulsory uninsured motorists law 7- specifically describe autos 8- hired autos only 9- nonowned autos only 19- mobile equipment subject to

identify the 10 symbols the BACF uses to signify coverage

liability loss exposures, property loss exposures, and personal loss exposures

identify the 3 basic categories of commercial auto loss exposure

- collision coverage - comprehensive coverage - specified causes of loss coverage

identify the 3 basic physical damage coverages from which the insured may choose under the business auto coverage form

siz, class, business use, and radius class

identify the 3 components of the primary factor used in rating trucks, tractors, and trailers for business auto insurance

-duty to pay damages -duty to pay "covered pollution cost or expense" -duty to defend the insured

identify the 3 distinct duties that an insurer has under the business auto coverage form liability coverage agreement

- all expenses incurred by the insurer - up to $2,000 for the cost of bail bongs required because of a covered accident - the cost of bonds to release attachments in any suit against the insured - all reasonable expenses incurred by the insured at the insurer's request - all court costs taxed against the insured in any suit -all interest on the full amount of any judgment that accrues after entry of the judgment in any suit against the insured

identify the 6 supplementary payments BACF liability coverage provides

- expected or intended injury and contractual liability exclusions - workers compensation and related exclusions - care, custody, or control exclusion - exclusions related to loading and unloading - operations and completed operations exclusions - pollution, war, and racing exclusions

identify the categories of exclusions in the BACF

for it to be covered, it must be acused by an accident and must result from the ownership, maintenance, or use of a covered auto. In addition, the same accident that causes the pollution cost or expense must also result in bodily injury or property damage covered by the policy

identify the circumstances under which the BACF will cover pollution cost or expense

the main situation in which symbol 19 is useful is when an insured has coverage through sumbol 7

identify the main situation in which symbol 19 is useful

is through the negligent injury of persons or damage to property by an employee operating an auto owned by the business

identify the most common way a business can incur auto liability

are persons injured by an accident while "occupying" a covered auto. If the named insured is an individual, the named insured and members of his or her family are covered while occupying any auto or if struck by an auto while a pedestrian

identify the persons covered by auto medical payments insurance in the BACF

is to insure loss to customers' autos while they are in the custody ofthe insured auto or trailer dealer

identify the purpose of garagekeepers coverage

any organizations other than auto or trailer dealers and motor carriers are eligible for business auto coverage form

identify what types of insureds are eligible for the business auto coverage form

Definition of serious injury

in some no-fault states, the noneconomic loss threshold is expressed in terms of a dollar amount of damages resulting from the injury. On other states, the threshold is express as a

reasonable and necessary medical and funeral expenses incurred by a person injured while occupying a covered auto

the Auto Medical Payments Coverage endorsement to the business auto policy provides coverage for

zone rated vehicles

trucks in the medium and larger size classes that are operated beyond a 200 mile radius of the prinicpal garaging location and that are subject to zone rating, which considers the territories in which insured vehicles operate

depends on what coverage symbols are indicated in the schedule of coverages and what covered autos are listed in teh business auto declarations

what determines whether a vehicle qualifies as a covered auto under the BACF

Symbol 9- nonowned autos only

A named insured's employee rents an auto while on a business trip and is involved in an accident. What symbol on the business auto policy would provide coverage for the named insured?