Fin 138 ch 14

All events resulting in automobile liability are:

covered unless specifically excluded.

Aaron has an auto insurance policy with limits of 15/25/15 ($15,000/$25,000/$15,000), the minimum required in the state where he lives. Aaron works in a neighboring state, which requires a minimum of 25/50/20 ($25,000/$50,000/$20,000). If Aaron is involved in an accident near his work (out of state), what level of coverage will his insurer provide? _____ . What provision in Aaron's policy determines this amount? ____.

- The minimum required in the state where the accident occured - out of state coverage

Select all the following which accurately describe Part A of the Personal Automobile Policy (PAP):

- It excludes coverage for rideshare drivers (i.e. Uber, Lyft) - intentionally caused (nonfortuitous) harm is always excluded. - it provides open perils liability coverage

Who is insured under the liability coverage of the PAP? Select all correct answers.

- any person driving the insured's covered auto with the insured's permission - family members of the insured - the insured - household employees of the insured

Although liability coverage under the PAP usually is subject to an aggregate limit, it can be divided by use of an endorsement into two major subparts: bodily injury liability and property damage liability. If you choose a ____to cover all liability, including both property damage and bodily injury, then the insurer will pay on your behalf for all losses up to this limit for any single accident, whether they are property-related or bodily injury-related. The only limit you are concerned with in this case is the aggregate, limit. Once all losses equal this limit, you will have to bear the burden of any further liability. If you choose a ____, a set of two limits will be specifically applied to bodily injury, and a single, aggregate limit will be applied to property damage. For the bodily injury limits, one limit applies per person, per accident, and a second limit is the total the insurer will pay for your liability to all persons injured in an accident.

- single limit of liability - split limit of liability

With this type of plan, if a company writes 10 percent of the auto insurance business in the state, it has to accept 10 percent of the qualified applicants.

Auto insurance plans

In an auto insurance policy, what is indicated by the limits 150/300/50?

Bodily injury: $150,000 each person, $300,000 each accident; Property damage: $50,000 each accident

This type of law requires automobile registrants to have specified liability insurance in effect at all times.

Compulsory auto liability insurance law

Which of the following statements about Part D of the PAP is not accurate?

Most states require this type of coverage.

Lars lent his car to his girlfriend Olga. Olga is distracted by her phone and rear ends a minivan, damaging both vehicles and injuring the other vehicle's driver and passengers. Assuming that Olga is at-fault, whose insurance will provide primary coverage for the injuries and damages?

The liability coverage (Part A) of Lars' PAP.

This coverage fills in the coverage gap that arises when the negligent party meets the financial responsibility law of the state, but the auto accident victim has losses in excess of the negligent driver's liability limit.

Underinsured motorist coverage

This coverage pays for bodily injuries caused by an accident with another vehicle whose driver is negligent and has no liability insurance or has less than that required by law.

Uninsured motorist coverage