RMIN Exam 3
The Jackson's have 3 children away at college. Two of them live in the same apartment and the other attends a different university. Their contents coverage (Coverage C) is a total of $150,000. How much total coverage do they have for all three children?
$30,000
Xavier has an HO-3 with $150,000 of coverage and the standard 50% for Coverage C. His gun collection is destroyed in a fire. What is the maximum amount he can be reimbursed under Coverage C for this gun collection?
$75,000
PAP Liability Coverage Benefit
- Automatic adjustment to another state's requirement (If you are driving in a state that has higher liability requirements, your limits automatically go up - Ex: you carry the minimum required by LA but drive to TX -Your limits go up to $30,000/$60,000/$25,000 (the TX minimum requirements)
PAP Medical Payments Coverage: Explanation of Coverage
- Reasonable and necessary medical expenses caused by an accident and sustained by the insured -"No fault" coverage - pays without regard to whether it was the driver's fault - Expenses must occur within 3 years of the accident
Marcus causes an accident and is liable for the following: ~ $18,000 in medical bills to Susie (the other driver) ~ $12,000 in medical bills to Victor (Susie's passenger) ~ $23,000 in damages for Susie's car
- Susie will get $15,000 from Marcus's insurance for her injuries (She can sue Marcus for the remainder of $3,000) - Victor will get $12,000 from Marcus's insurance for his injuries $18,000 + $15,000 does not exceed the $30,000 per accident bodily injury - Susie will get the full $23,000 to repair her car (bc its under the $25,000 per accident property damage)
Standard Homeowners Policies
-"the most comprehensive protection for owner-occupied, 1 to 4 family residences" -Like the Personal Auto Policy, these set of policies were developed by the Insurance Services Office, now "Verisk" -Verisk is a private co. that provides standard insurance policies & many other services to insurance co.'s
Medical Payments: Limits
-$2,000 per person injured - If 10 people are injured, technically, the policy will pay $20,000 (up to $2,000 per person) -Remember, covers "any family member" -Family of 4 with 4 insureds can't use each $2,000 for the same person for the same accident -Can't stack limits (can't use limits for all 4 insurers on 1 insured)
HO3 Contents: Examples of Special Dollar Limits
-$200 limit on money, bank notes, bullion, gold other than gold ware, silver other than silverware, platinum, coins, and medals -$1,500 on watercraft, including their trailer furnishings, & outboard motors -$1,500 on trailers not used with watercraft -$1,500 for loss by theft of jewelry, watches, furs, & precious & semiprecious stones **(but would be covered by overall if loss by fire)** -$2,500 for loss by theft of guns -$2,500 on property on the residence premises, used for primarily for business purposes -$1,500 on property away from the residence premises, used primarily for business purposes -$1,500 for loss to electronic apparatus, while in or upon a motor vehicle
HO3 Coverage F (Medical Payments to Others) Examples:
-A person falls down the insureds stairs -an insureds elbow accidentally hits another players eye while playing basketball -a resident employee hits & damages someone's mailbox while strolling insureds baby -an insureds dog bites the neighbor
Physical Damage: Limits
-Actual cash value of the loss or the amount necessary to repair or replace the property, whichever is less (Actual cash value (ACV) includes an adjustment for depreciation and the physical condition of the auto) -If the cost of repair or replacement is greater than the value of the property, the insurer may declare the loss a total loss and pay the ACV of the vehicle -Insurer has the right to pay for the loss in money, repair, or replacement of the damaged or stolen property -Coverage is excess for a non-owned auto (whoever owns the car, their insurance will cover the damage first & then your insurance will pay the excess if needed)
Covered auto (in PAP):
-Any vehicle shown in the declarations -Any private passenger auto, pickup or van for 14 days. (This means if you purchase a new vehicle you have 14 days to notify the insurance company about the change & have 14 days of coverage on both vehicles) -Any trailer you own -Any auto/trailer you do not own but is used as a substitute (renting or borrowing a car)
Supplementary Payments (PAP Liability Coverage)
-Bail bonds up to $250 for an accident resulting in bodily injury or property damage (a bail bond posted for a speeding violation or DWI is not covered unless either BI or PD occurs) -Interest that accrues after a judgment and reasonable expenses incurred (ex: if it takes a year to resolve the case there may be interest incurred that has to be paid to the other party) - Up to $200 per day is available for loss of earnings resulting from attending trials or hearings
Physical Damage: Explanation of Coverage
-Covers damage for accidental loss to the "covered auto" or a nonowned auto -Separated into two sections: collision & other-than collision
Limit of Liability (PAP Liability Coverage)
-Generally stated at split limits -Ex: LA's required liability: $15,000/$30,000/$25,000 $15k- required for per person bodily injury/ $30k- required for per accident bodily injury/ $25k- required for per accident property damage
If an accident exceeds the limit of liability:
-It might be paid out proportionately to the injured parties -It might be paid out in order of the claim (depending on which injured person makes their claim first) -The injured party can sue for remainder amount - The car's insurance pays first (ex: if Tammy borrows her boyfriend, Gary's car to go to work & has an accident, Gary's coverage pays before Tammy's)
The Personal Auto Policy (PAP) Components
-Liability -Medical Payments -Uninsured Motorist -Physical Damage to Your Auto
Loss Control & Prevention: Safety Features
-Numerous safety features available in vehicles today; Ex: collision warnings, automatic emergency braking, lane departure warnings, lane-keeping assist, blind spot monitoring, back up cameras -Benefits: should help reduce accidents, assuming their impact is not offset by drivers who become more careless bc they assume the technology will protect them
The Need for Insurance
-Only liability insurance is required -Liability insurance won't pay YOUR medical bills -Liability insurance won't pay to repair your car -Imagine if your car was destroyed and you had no insurance
Who is an Insured (under PAP Liability Coverage)?
-Owner of covered auto (named insured) -Person using covered auto -An employer who is vicariously liable for an employee driving your covered auto (ex: driving your own car to deliver Johnny's pizza. If you have an accident that is your fault Johnny's may be sued for some of the damages. Your PAP covers Johnny's too) -An employer who is vicariously liable for you driving someone else's auto (ex: if you borrow a friends car to deliver the pizza. Johnny's is also protected)
Uninsured Motorist: Explanation of Coverage
-Pays for bodily injuries that result form an accident with another vehicle -Pays only if other driver: is negligent and; does not have any insurance (or has insurance less than that required by law); or is a hit-and-run -Acts like the uninsured vehicle's bodily injury liability (ie the "at-fault" drivers) -Usually just bodily injury coverage but in some states, it also covers property damage -The insurance does not cover punitive damages
Family Member (in PAP):
-Person related to you by blood, marriage or adoption -Also a resident of your household, including a ward or foster child
PAP Liability Coverage
-Promises to pay bodily injury claims for which any insured becomes legally responsible due to an auto accident -Promises to pay property damage claims for which any insured becomes legally responsible due to an auto accident -Promises to either settle or defend, at its own discretion, any covered claim or suit -No duty to defend if policy excludes coverage -No duty to defend once policy limits have been exceeded
Medical Payments: Who is an Insured?
-You or any family member when occupying: a motor vehicle designed for use on mainly public roads or by a trailer of any type -You or any family member as a pedestrian when struck by: a motor vehicle designed for use on mainly public roads or by a trailer of any type -Any other person while occupying: your covered auto
General Characteristics of Homeowners Insurance
-a traditionally stable branch of the insurance industry -premiums tend to increase each year at a moderate rate; not like auto -less sensitive than personal auto (homeowners don't face substantial annual rate increases or; suddenly being thrown into the nonstandard market -occasionally, however, an event occurs that dramatically impacts homeowners insurance
Loss Control & Prevention: Reducing Frequency of Accidents
-accidents can be reduced by building better highways & safer cars & perhaps by lowering speed limits -expanding the interstate highway system is one way to make highways safer, as are breakaway light posts & guardrails & impact barriers -insurers can lobby for road improvements but cannot require them or pay for them -there are still frequent debates over the proper balance of spending between highways & mass transit -"with growing concerns over pollution & congestion, mass transit may get a larger slice of the pie in the years ahead"
HO3 Contents: Examples of Excluded propety
-articles separately described & specially insured in this or any other insurance (eg expensive camera, a watch, or a diamond ring) -animals including birds & fish -motorized land vehicles, except those not licensed for road use that are used to service an insured's residence or assist handicapped -aircraft & hovercraft & their parts. Model airplanes are covered -property of roomers, boarders & other tenants, except those related to the insured (if your child in college is paying you rent his property is covered bc he's related to you) -property contained in an apartment regularly rented or held for rental to others by any insured -business data, including such data stored in paper records or electronic records (replacing computer programs is covered)
Physical Damage: Collision Coverage
-collision is defined as "upset of your covered auto or nonowned auto or its impact with another vehicle or object"
Homeowners Insurance Policies are Package Policies
-combine more than one type of coverage & more than one peril covered -fewer gaps in coverage -lowers costs (cheaper than buying each separately)
Physical Damage: What is an Insured Auto?
-covered auto -insured, nonowned auto (any vehicle operated by you or a family member)
HO3 Coverage D (Additional Living Expenses)
-covers the increased cost of living from damage to insured home by insured peril -pays for a hotel room (commensurate with insured home)/ allows the insured to maintain their normal standard of living -increased cost of living is covered (eg increased cost of food) -also pays for loss of rental income (less rental expenses)
HO3 Additional Coverages of Section 1: Examples
-debris removal -trees & shrubs -credit card, electronic fund transfer card, forgery & counterfeit money -landlord's furnishings -loss assessment (such as from a Homeowners Association) -grave markers
HO8: Modified form
-developed to meet a special situation in urban areas -many people move int older neighborhoods & renovate their homes there -HO8 was developed to meet the needs of the insured & to reduce the moral hazard involved with other forms -under the HO8 form can collect on a "cost-to-repair basis", which is different from actual cash value in 2 ways (there is no deduction for depreciation & repairs may not be made with like labor & material)
PAP: Policy Cancellation
-during the first 60 days of the policy, the insurer may cancel for any reason, & it may cancel for nonpayment of premium at any time -the insurer has 60 days to investigate the insured & make its underwriting decision. during the first 60 days, the insurer must give 10 days notice before cancelling -after the policy has been in effect for 60 days, the insurer can cancel only (1. for nonpayment of premiums/ 2. if the insured or a resident of the household, or someone who regularly uses the auto, has his or her license suspended or revoked/ 3. if the policy was obtained through material misrepresentation) -when cancellation is made after the first 60 days, 20 days notice must be given if the insurer decides not to renew the policy at the end of the policy period
General Exclusions to All Property
-earth movement (not limited to earthquake) -flood & several other types of water damage -war -intentional loss -neglect by the insured to protect the insured property from loss at and after the time of the loss -spoilage
Optional Property Endorsements
-earthquake -inflation guard -guaranteed replacement cost -personal property replacement cost
16 Perils in Named Perils Homeowners Forms: (cover by coverage C)
-fire & lightening -windstorm & hail (including hurricane & tornadoes -theft (not by family member) -weight of ice, snow or sleet -aircraft -vehicles -explosion -smoke -falling objects -accidental discharge or overflow of water or steam -sudden and accidental tearing, cracking, burning, or bulging -sudden & accidental damage due to short circuiting -freezing -riot or civil commotion -vandalism & malicious mischief -volcanic eruption
HO3 Coverage E (Personal Liability): Exclusions
-intentional losses -loss arising out of business activities -loss arising out of professional services -loss arising out of any premises owned by or rented to any insured -exclusions regarding motor vehicle, watercraft, aircraft, and hovercraft liability (some exceptions like a golf cart at a golf course) -war -covered under workers compensation -transmission of communicable disease -sexual molestation, corporal punishment, or physical or mental abuse are excluded -use, sale, manufacture, delivery, transfer, or possession of a controlled substance
Auto Rating Factors:
-male or female -marital status -territory (also a major rating factor, this is obvious by looking at variation of auto insurance premiums across states) -type of auto -driving record -credit history (only certain aspects of "credit score" are used)
Physical Damage: Other-than Collision Coverage (covered perils are losses caused by):
-missiles -falling objects -fire -theft or larceny -explosion -earthquake -windstorm -hail -water -flood -malicious mischief or vandalism -riot or civil commotion -contact with bird or other animal -breakage of glass (can be covered under either)
Uninsured Motorist Coverage: Uninsured Vehicles are:
-not covered by liability insurance (for alternative bond) -covered by insurance (or bond) but under required limits -one that is a hit and run vehicle who operator or owner cannot be identified -covered by liability insurance or bond from a company that denies coverage or has become insolvent
Why do Young Male Drivers Pay so Much More?
-on average, they have more & higher claims -rate of accidents is about 25% higher for males than females -the rate of fatal accidents is nearly 3 times higher for males than for females -males drive more miles on average but also have more accidents per mile driven than females
Coverage F: Medical Payments to Others
-pays medical payments to a person on the insured location with the permission of the insured -to a person off the insured location if bodily injury: arises out of a condition on the insured location; is caused by the activities of the insured; is caused by a residence employee in the course of the residence employee's employment by an insured; or is caused by an animal owned by or in the care of the insured -medical expenses within 3 years from the date of the accident -the named insured and regular residents of the insured household are not covered for medical expenses -coverage is no-fault basis - not like liability insurance, where legal liability must exist
HO3 Coverage C: Applied to children in college
-property usually located at an insured's residence other than the residence premises (eg vacation home, away at college) is covered for $1,000 or 10% of the amount of coverage C, whichever is greater -if children of the insured live separately at college, each child's property would be covered for 10% of the Coverage C amount -if multiple children of the insured all room together, only one limit, 10% of C, would apply to the property of all the children living there
Coverage E Personal Liability
-provides liability coverage for bodily injury and property damage claims against an insured -defense costs in addition to the policy limits -up to $250 per day for actual loss for assisting the insurer in the suit
Loss Control & Prevention: Telematics
-telematic systems record driving behaviors (how much you drive, when & where you drive, your speed & hard stops & rapid accelerations) -users of telematics can improve driver safety (parents can use apps to track the driving of their teens, co's use telematics to monitor driving behaviors of employees who drive for work, insurers use data to set auto premiums based on actual driver behavior rather than simply relying on traditional demographic characteristics)
Uninsured Motorist Coverage: Who is an Insured?
-the named insured -named insured's family members -any person occupying the covered auto -unlike liability coverage, the insured is the one reimbursed with uninsured motorist -more like "medical payments" coverage in that way -covers more than medical payments; covers lost wages for example
PAP: Territory
-the policy states that its territorial limits are the US, its territories or possessions, & Canada -transportation of the auto between any of these points is also covered -technically Puerto Rico, a commonwealth, is also within the territorial limits -Mexico is not a covered territory
Physical Damage: includes transportation and towing
-transportation: (rental car) to $20 per day (up to a maximum of $600)/ in case of theft, 48 hour waiting period in order to recover -towing: additional premium, towing and labor cost coverage may be added/ limit of liability is generally about $50/ might be included with car or AAA
HO3 Coverage C (Contents)
-typically covers 50% of Coverage A (can be more) -covers personal property owned or used by an insured while anywhere in the world -Ex: jewelry, kitchen appliances, furniture, clothes, computers, televisions, currency, guns, bicycles, property of others if requested by the insured
Uninsured Motorist Coverage: Limits and Conditions
-uses split limits (similar to liability/not medical payments; eg $50k/100k) -coverage is excess on non-owned vehicles (means the cars uninsured motorist applies first) -some insurers offer an uninsured motorist endorsement (pays even if at-fault driver carried legal limits/ applies when at-fault driver's coverage was not sufficient to cover losses)
Open Perils Exclusions
-wear and tear -inherent vice (building with bad materials) -latent defect -mechanical breakdown -rust, mold, & wet or dry rot -contamination -smog -smoke from agricultural smudging or industrial operation -settling, cracking, shrinking, bulging, or expansion of pavements, patios, foundations, walls, floors, roofs, or ceilings -loss due to birds, vermin, rodents, insects, or domestic animals
HO3 Coverage E (Personal Liability): Who is an Insured?
-you (the named insured) -your resident relatives (including sons or daughters of named insureds under 24 who are away at college & enrolled full time -any other person under the age of 21 who is in the care of any person named above (If you have a grandson living with you & he is hurt on the property his injuries are not covered but if he hurts someone on or off the property, the other person is covered) -any person legally responsible for animals of watercraft that are owned by an insured on the previous slide (but not for business eg a veterinarian) -person employed to maintain the home's yard
PAP: Duties After an Accident
1. Notify: promptly notify the insurance co. of how, when, & where the accident or loss occurred (can be to agent) 2. Cooperate: cooperate w/ the co. in the investigation, settlement, or defense of any claim or suit 3. Send: promptly send the co. copies of any notices or legal papers rec. in connection w/ the accident or loss 4. Submit: submit, at the co.'s expense, to physical examinations by physicians selected by the co. & to examination under oath 5. Authorize: authorize the co. to obtain medical reports & other pertinent records -submit a proof of loss when required by the co -notify the police promptly if your covered auto is stolen -if the loss is Auto Physical Damage, take reasonable steps after a loss to protect your covered auto & its equipment from further damage -permit the co. to inspect & appraise the damaged property before its repair or disposal
The Personal Auto Policy (Eligibility)
A car must be owned or leased by an individual or jointly owned by a married couple. It is primarily designed for private passenger cars.
Which of the following losses would be covered under the named perils of the HO-3 (Special Form) policy? A. A firefighter chops through a roof and damages the contents inside when trying to put out a fire inside a home B. Andree's dishwasher overflows because of a mechanical failure and floods the contents of her kitchen C. Ethan's expensive jacket is burnt when he accidentally throws it too close to his fireplace D. Rain blows through an open window in Wesley's house and ruins his computer
A firefighter chops through a roof and damages the contents inside when trying to put out a fire inside a home
Trailer (in PAP):
A vehicle designed to be pulled by any "covered auto"
Who is NOT considered an insured under Coverage E, the Personal Liability Coverage if your dog bites someone? A. A friend taking care of your dog B. A veterinarian while keeping your dog overnight C. You D. Your niece who lives in your house
A veterinarian while keeping your dog overnight
Overall Features of the Homeowners Forms: Ex HO3 (Special form)
A: dwelling - minimum varies by insurer (if the home was purchased at $200,000 it will most likely be that amount) B: other structures - 10% of A C: unscheduled personal property (contents) - 50-70% of A D: additional living expense - 30% of A E: comprehensive personal liability - $100,000 F: medical payments to others - $1,000 per person
Auto accident fatalities are declining over time. Decrease in deaths/severity (and frequency of accidents) are primarily because of:
Air bags, antilock brakes, stricter enforcement of traffic laws to reduce the number of drunk drivers
Which of the following statements is true regarding auto accidents in the U.S.? A. The rate of auto accident fatalities has declined over the past 30 years B. Men have a higher proportion of fatal accidents than women at most ages C. Young drivers account for a disproportionate number of fatal auto accidents D. All of the above
All of the above
Today even affordable cars come equipped with safety features such as:
Automatic emergency braking, lane keep assist, advanced cameras, rear-seat reminder systems
Under automobile rating methods, what factor below contributes to a rate reduction?
Being older than a teenager
Layout of a Standard HO Policy: Section 1 (property insurance coverages)
Coverage A, B, C, D, & additional coverages
Layout of a Standard HO Policy: Section II (liability)
Coverage E & F
Occupying (in PAP):
Defined as "in, upon, getting in, on, out, or off"
What should homeowners with an open perils policy pay particular attention to?
Exclusions
T or F: Both Medical Payments and Uninsured Motorist coverage in a PAP ONLY pays if the insured is not at fault for the accident.
False
Match the endorsement with its purpose
Guaranteed replacement cost endorsement - means you don't have to worry about your limits of coverage Personal property replacement cost - changes the basis for personal property coverage from actual cash value to replacement cost so property isn't depreciated Inflation guard endorsement - automatically increases the policy limit every three months
Match the policy with the appropriate users:
HO-4 - Renters HO-3 - Owner-occupants HO-6 - Condominium unit owners
Outline of Homeowners Insurance: Form Designations
HO1: Basic form (covers only 8 perils) HO2: Broad form (covers 16 perils) HO3: Special form ("open perils" for "real property") HO4: Renters form (contents only) HO6: Condo-Owners Form (contents, appliances, fixtures & assessments ex: if the condo's pool house is damaged) HO8: Modified form
Liability insurance requirements vs. financial responsibility laws
In some states, liability requirements can be met by purchasing insurance OR a surety bond but most people purchase liability insurance even in states that allow you to buy a surety bond
Match the loss with the applicable PAP coverage:
John accidentally backs into a tree and causes significant damage to his car - collision Marge's car is significantly damaged by hail - other than collision David accidentally hits a pedestrian and is sued - liability
Which of the following is true of Coverage E, the personal liability coverage? A. Defensive costs use up policy limits B. Legal liability must exist on the part of the homeowner for coverage to apply C. The policy will pay for injuries to your grandchildren who live in your home D. The policy limits apply per person injured in an accident
Legal liability must exist on the part of the homeowner for coverage to apply
Personal Articles Floaters
Open-perils contracts designed to give broad coverage to valuable personal possessions Ex: personal jewelry, furs, fine golfers equipment, musical instruments, silverware, & stamp & coin collections
Which of the following is NOT true of homeowners insurance and the homeowners industry A. Most catastrophic losses have been paid for by homeowners insurance B. The homeowners policy is a personal lines package policy C. Premiums tend to stay the same every year D. Losses from the costliest insured catastrophe in history were mostly in Louisiana
Premiums tend to stay the same the following year
What is the primary proposal that is being put forth in an effort to reduce auto insurance rates in Louisiana?
Reducing the jury-trial threshold to $5,000
Katrice is in an accident that she thinks might have been her fault. What IS one of her duties after an accident?
Sending any important legal reports about the accident to the insurer
Kat has an HO-3 covering her home. The dwelling coverage (Coverage A) limit is $250,000. She has a terrible fire with $240,000 of damage to the home and $25,000 to the garage. How much coverage will she have on the garage after the $240,000 has been spent on the home?
She will only have the full $25,000 if the garage is unattached and only $10,000 if the garage is attached
Systems that track your driving behavior, including when you drive, how many hard stops you have, and how often you rapidly accelerate are commonly known as:
Telematics
Which of the following injuries would NOT be covered by the HO-3's Medical Payments to Others coverage? A. The insured's dog bites a neighbor B. A visitor trips over a toy in the insured's living room C. The insured accidentally runs over a friend's toes with her car D. All of the above would be covered by Medical Payments to Others
The insured accidentally runs over a friend's toes with her car
Elisa has a PAP with the minimum limits required in Louisiana. She is involved in an accident that injures Sammie, the driver in the other car. Sammie sues Elisa's insurer for $13,000 in medical bills from the accident and wins. The next year Sammies sues the insurer for another $5,000. Elisa and her insurer both think this is suspicious because it is a totally unrelated injury to his original injury. The insurer decides not to fight the suit and pays Sammie $2,000. Which of the following would happen next if Sammie continues to say he needs another $3,000?
The insurer will not defend Elisa or pay the $3,000 because Elisa's per person bodily injury limits were exhausted.
Which of the following would NOT be a covered loss under the named perils of an HO-3 policy? A. A fire starts when lightening strikes a house and results in significant damage to the homeowner's belongings B. The pipes freeze in a house that has been unoccupied for six months causing substantial damage to the contents still in the home C. A tornado rips through a home and causes significant damage to its contents D. A man tries to steal Miguel's television and damages it on the way out before he gets caught
The pipes freeze in a house that has been unoccupied for six months causing substantial damage to the contents still in the home
Which of the following is true regarding today's homeowners' policies?
They are less expensive than purchasing each included coverage separately would be
How do insurers profit?
They invest the premium until they pay claims. They make a profit from interest earnings of those investments
Tracie is a Louisiana resident who carries a PAP with the minimum amount of insurance required in her state. Heading to visit a friend, Tracie is driving in Arkansas where the liability minimum requirements are $25,000/$50,000/$25,000. If Tracie has an accident in Arkansas, that is her fault, which of the following is true about her liability coverage?
Tracie has more BI liability (per person/per accident) but the same PD liability per accident
T or F: 8 of the top 10 catastrophies occurred in the 21st century
True
T or F: A higher proportion of 16-20 (male and female) have fatal accidents and therefore pay more in insurance
True
T or F: Except 9/11 terrorist attacks, catastrophic losses paid mostly by homeowners insurance
True
T or F: LA's 15/30 BI minimum liability limit is lower than most states but the 25 PD minimum liability is the same as or higher than other states
True
T or F: Males have a higher proportion of losses than females until age 56
True
T or F: Verisk owns the Insurance Services Office (ISO). They are the industry leader in developing insurance policy forms
True
T or F: the costliest insured catastrophe is the US history (& world history) was Hurricane Katrina in 2005. Caused about $52 billion in insured property losses (in 2018 dollars)
True
What does Dr. Berry consider a "morale" hazard exclusion (morale with an "e")
Wear and tear
Because Y's car is broken down, Y borrows his son's car to run an errand. The son, who lives with Y in the same household, does not have his car insured. If Y has an accident, would Y's PAP cover him? Explain why or why not.
Yes, coverage exists on the basis that the son's car is a temporary substitute automobile
Match the piece of property with the HO-3 coverage used to cover that type of property.
Your home - Coverage A Your furniture - Coverage C Your shed that sits at the back of your backyard - Coverage B Your garage attached by a roof to the main home - Coverage A
