Unit 8 Personal Auto Insurance

Part D - Transportation Expenses

$20(day)rental cars, bus , train , or cab. MAX $600 ■■ transportation expenses incurred by the insured because of physical damage losses to the insured's covered auto; and ■■ loss of use expenses for which the insured becomes legally responsible because of loss to a nonowned auto. *THEFT 48 waiting period forb4 expenses are paid. *• 24-hour waiting period all other type losses

PERSONAL AUTO POLICY ENDORSEMENTS

*Auto Endorsements • Joint ownership coverage—insureds are not married or are unrelated • The towing and labor costs - Covered auto is disabled - Labor must be performed at the place of disablement • Repair work is not covered • *Miscellaneous type vehicles - Motorcycles - Scooters - Golf carts - Motor homes • Extended nonowned coverage— vehicles furnished or available for regular use - Covers insured and the family while driving nonowned autos on a regular basis - Company cars • Named nonowner coverage - Covers someone who does not own an automobile but may drive borrowed (company auto) or rented autos. Doesn't cover Pers. Auto - Only covers the person named in the endorsement

Part D - Collision

*Collision is defined as the impact of an auto covered by the policy with another object or vehicle, or the upset (overturn) of a vehicle. *Other than Collision coverage pays almost every other type of direct, accidental loss to the vehicle that is not specifically excluded by the policy *Both require own deductible

NEWLY ACQUIRED AUTOS—LIABILITY, MEDICAL, AND UNINSURED/UNDERINSURED MOTORIST COVERAGE

*Newly Acquired Auto • Automatically has same coverage as current covered autos for 14 days • Must be specifically added to policy within those 14 days *Replacement Auto • Covered same as existing autos • Not necessary to report addition *Collision and Other Than Collision • If coverage is already on policy, report within 14 days • If no coverage, must request coverage within four days • If loss occurs within first four days and insured has complied with notification, $500 deductible will apply

Part D - Other than Collision

*Other than Collision coverage pays almost every other type of direct, accidental loss to the vehicle that is not specifically excluded by the policy. Damage caused by the following: ■■ 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 NOTE: Doesn't cover any pers. prop.

PART A— Out-of-State Coverage

*Out-of-state coverage provision modifies the personal auto policy to meet other states' nancial responsibility requirements and other state laws concerning out-of-state drivers when the covered auto is being driven in that state. *While temporarily driving in another state, the insured's liability coverage will pay the higher of: ■ the insureds liability policy limits; or ■ the other state's minimum liability requirements.

PART A—LIABILITY COVERAGE

*Part A—liability coverage --Part A covers damages for bodily injury or property damage for the other guy (Auto accident) --Policy settles or defends any claim/suit asking for damages. defense cost (in addition to limit); Up to the limit liability has been exhausted. ONLY for covered BI and PD.

PART D—COVERAGE FOR DAMAGE TO YOUR AUTO

*Part D—coverage for damage to your auto, known as physical damage coverage. pays for direct and accidental loss to the named insured's owned or any nonowned auto (rented to borrowed) caused by: ■■ collision; or ■■ Other than Collision (sometimes referred to as OTC or comprehensive). Note: does not cover pers. prop.

CONDITIONS

*The Termination Provision Insured-describes conditions if insured wants to cancel at anytime or not renew; provides advance written notice of wanted cancellation date *Insurer Must provide written notice *Policy Territory The coverage territory includes the United States, its territories and possessions, Puerto Rico, and Canada. Covered autos are also insured while being transported between territorial ports. *Policy period shown in the declarations. Usually 6 mos *legal action may not take legal action against an insurer until they have complied with all of the policy terms. *Policy terms may not be changed or waived except by written endorsement.

PART A— Who Is an Insured?

*Under Part A -The named insured -Resident fam members -Anyone who has permission or thinks he does

Part A - Other Insurance

2 policies purchased to cover. Pro Rata are going to pay their percentage of the loss. Will not get full coverage from either. To indemnify the person (no more, no less). Note: Property insurance on vehicle is always primary. For company car, companies insurance is first

PART A— Supplementary Payments (BAILED)

Additional supplementary payments are paid in addition to liability at no additional premium *BAILED ■BONDS—up to $250 for the cost of bail bonds AID—first aid rendered by the insured ■AID—first aid rendered by the insured ■INTEREST on judgments or appeals (if the insurance company appeals a money judgment against the insured) ■LOSS OF EARNINGS up to $250 per day because of attendance at hearings or trials at the company's request ■EXPENSES incurred by the insured at the company's request ■DEFENSE attorney cost to the insured

ASSIGNED RISK PLANS (AIP)

Assigned risk plans are insurances for people with poor driving records. Are voluntary agreements between companies licensed in a state who agree to share the poor risks. Because these risks are randomly assigned to the participating companies, they are called assigned risks. Each company accepts its share of assigned risk drivers according to the size of the individual insurance company. Usually only have to issue liability coverage.

Appraiser and Arbitration

Both parties agree there is a valid claim but can't agree on amount. The two appraisers then select an umpire. If the appraisers fail to agree on an amount, they submit their differences to the umpire. Arbitrator- official appointed to settle a dispute.

PART B—MEDICAL PAYMENTS COVERAGE

Coverage: Who Is an Insured? For Insured, family, passengers. -covers reasonable medical/funeral $ within 3 years of injury date. Regardless of fault Insureds for medical payments coverage include: ■■ the named insured and any family member(s) -- while occupying a motor vehicle designed for use on public roads or a trailer, or -- when struck while walking along a roadway by a vehicle designed for use on public roads or a trailer; and ■■ any other person while occupying the named insured's covered auto(s).

PART C— Subrogation

If the insured's policy pays for bodily injury (BI) or property damage (PD) caused by an uninsured motorist, the insurance company has the right to sue the uninsured motorist for the damages the company paid.

PART C— Who Is Insured?

Insureds for uninsured motorist coverage include: ■■ the named insured; ■■ anyone occupying the named insured's covered auto; and ■■ any person entitled to recover damages because of bodily injury caused by an uninsured motorist to the named insured, family members, or passengers in the covered auto. An example is a parent who is entitled to recover medical expenses incurred by a minor child due to an uninsured motorist

PART A— Exclusions

Liability Exclusions • Intentional injury or damage • Injury to an insured • Damage to property owned or transported by an insured • Injury to an employee • Using the vehicle as a taxi (carpool is OK) • Use of the vehicle without permission • Vehicles less than four wheels or not licensed for road use • Vehicles used for racing

Part C - Limit of Liability

Limits of Uninsured Motorist • Can be split or a combined single limit • Usually can't be greater than insured's liability limits

PART B— Limits of Liability: Other Insurance

Medical payments coverage has a single limit of liability that applies to all injuries sustained by each person injured in any one accident. Typical limits are $1,000, $2,000, $5,000, or $10,000 (up to $100,000). Cannot collect from multiple policies for profit What if a passenger is injured in an auto accident and has $3,000 of medical bills? The driver of the car is at fault. If the driver's Part A—liability pays the $3,000 medical bills, the passenger can't profit from the loss by filing a $3,000 claim against the driver's Part B—medical payments coverage.

Part C - Other Insurance

One important difference is that the amount that the insured can be paid is limited to the highest single policy limit for uninsured motorist coverage. Suppose Imelda has two personal auto policies, both with a $200,000 limit of liability for uninsured motorist coverage. She is involved in a serious accident with an uninsured driver and incurs $350,000 in medical expenses. The maximum amount she could collect under both policies for this loss is $200,000.

Exclusions (Part D excludes losses)

Part D excludes losses: ■■ to an auto being used as a public or livery conveyance; ■■ due and confined to wear and tear, freezing, mechanical or electrical breakdown, or road damage to tires (does not apply when the damage results from the total theft of the auto); ■■ to electronic equipment that reproduces, receives, or transmits audio, visual, or data signals (does not apply to equipment that is permanently installed in the auto); ■■ to tapes, records, disks, and other media used with the electronic equipment described above; ■■ due to destruction or confiscation by government or civil authorities (does not apply to the interests of any loss payee in a covered auto); ■■ to custom furnishings or equipment in a pickup or van (does not apply to caps, covers, or bed liners on pickup trucks); ■■ to radar or laser detection equipment; ■■ to nonowned autos being used by any person engaged in an auto business; and ■■ to any auto being used in a prearranged racing or speed contest.

Other Provisions

Physical damage losses are reimbursed for actual cash value or repair/replacement cost. *Appraiser need if insured and insurer don't agree -Most paid for nonowned trailer-$1500 -Most paid for installed electronic equipment (nonmanufacturer) $1K *The no benefit to bailee condition bailee cannot benefit from the insurance policy -repair shop owners and -employees of parking garages. Bailee- indiv. who has temp possession of car

PART A— Financial Responsibility

State requires the ability an proof to pay for BI or PD (Why you buy insurance)

PART A— Limits of Liability

The Part A limit of liability is the most the company will pay for all damages resulting from any one auto accident, regardless of the number of insureds, claims filed, vehicles or premiums listed in the declarations, or vehicles involved in the accident. *combined single limit - Limit that covers all BI and PD *Split limits - 100/300/50 ■ $100,000 per person for bodily injury or death; ■ $300,000 per accident for bodily injury or death; and ■ $50,000 per accident for property damage.

DEFINITIONS

The definitions section of the personal auto policy defines key terms used in the policy. These terms help clarify the intent of various coverages and conditions, as you will see throughout this unit. ■Family member- blood or someone living with you ■Bodily injury -- someone getting hurt ■Occupying -- means: someone in vehicle, upon a vehicle, or Getting into or out of a vehicle. ■Property damage - ■Covered auto -includes: private passenger autos (under 10k lbs gross vehicle weight), not used for business purposes, (Farming/ranching are not considered businesses.) Must be owned or leased under a long-term contract of 6mos+ --Newly acquired autos-a private passenger auto, pickup, or van the named insured acquires during the policy period. --Any trailer owned by the named insured --Any auto or trailer not owned by the named insured that is being used as a temporary substitute for a vehicle shown in the declarations that is out of use because of breakdown, repair, servicing, loss, or destruction

PERSONAL AUTO POLICY (PAP)

The personal auto policy - property and liability coverages The personal auto policy consists -declarations page and a -policy form -contains four separate coverages, each with its own insuring agreement, exclusions, and conditions.

PART C—UNDERINSURED MOTORIST COVERAGE

Underinsured motorist coverage fills gap when liability only insurance Meets States required limit but often falls short of fully reimbursing the insured for a loss. (hit and runs)

PART C—UNINSURED MOTORIST COVERAGE

uninsured motorist coverage pays the insured, family, and guest passengers for bodily injury **some states property damage ■■ Uninsured motorist coverage is mandatory in some states; in others, it must be offered and may be rejected in writing.

The named insured chooses from the following coverages that are available:

■ Casualty - Part A—liability coverage - Part B—medical payments coverage - Part C—uninsured motorist coverage ■ Property - Part D—coverage for damage to your auto (physical damage)

PART B— Exclusions

■■ sustained while occupying a motor vehicle with fewer than four wheels; ■■ sustained while using a covered auto as a public or livery conveyance; ■■ that would be covered under workers' compensation; ■■ sustained while occupying an uninsured auto owned by a family member or furnished for the family member's regular use (does not apply to the named insured); ■■ sustained while the insured is occupying a vehicle without the reasonable belief that he is entitled to do so (does not apply to family members using covered autos owned by the insured); ■■ sustained while occupying a vehicle that is being used in the insured's business; ■■ caused by war or nuclear hazard; ■■ sustained while occupying a vehicle located for use as a residence or premises; or ■■ sustained during prearranged racing or speed contests.