Chapter 6 Auto liability
your covered auto include what 4 autos
1. any vehicle on the Dec 2. A newly acquired auto '3. an auto owned trailer 4. a temporary substitute
Non-resident relative
2 or more persons related by blood, marriage, or adoption who reside in separate households. This includes a ward or foster child.
After an automobile policy has been in effect for 60 days, the insurer may cancel the policy for any of the following reasons, except: A Submission of four or more claims during a single policy period B Suspension of the driver's license of the named insured's or household resident C Non-payment of premium D Material misrepresentation of information on the application by the insured
A Submission of four or more claims during a single policy period
The insurer's limit of liability for a vehicle damaged by a loss under Part D is which of the following? A The lesser of actual cash value and replacement value B Replacement value C The greater of actual cash value and replacement value D Actual cash value
A The lesser of actual cash value and replacement value
Under Part D, Within how many days must an insured report the purchase of a new vehicle that is replacing an existing vehicle covered by collision coverage? A 14 B 4 C 15 D 5
A 14
If an insurer non-renews an insured's policy for underwriting reasons, what is the minimum number of days' notice to the insured? A 20 B 45 C 60 D 30
A 20
A private passenger auto includes a leased vehicle as long as the lease contract is continuous for how many months duration? A 6 B 9 C 12 D 3
A 6
Family Member
A person related to the named insured by blood, marriage, or adoption who is a resident of the named insured's household. A family member includes a ward or foster child.
Trailer
A vehicle designed to be pulled by a private passenger auto or a pickup or van. Trailer also includes a farm wagon or farm implement while it's being towed by a private passenger auto pickup, or van.
Each of the following is a Part A - Liability Coverage Supplementary payment, except: A Premiums on appeal bonds B Payment for all defense costs C $250 for the cost of a bail bond D $200 a day for loss of earnings due to an insurer request to assist in the trial
B Payment for all defense costs
Which of the following is covered under Part C - Uninsured Motorist Coverage? A The insured is also covered by Workers' Compensation B Accident was caused by a hit-and-run driver C Punitive damages awarded for the insured D A family member is struck by an insured vehicle
B accident was caused by a hit-and-run driver
Part F- 5 parts to it
Bankruptcy- insurer must honor obligations changes- insured must notify insurer of changes; may adjust premiums Froud- No coverage for any insured who commits fraud in connection with a loss Legal action against the insurer- no action may be taken without full compliance with policy right to recover payment- insured gives insurer rights of subergation after loss
Bodily Injury
Bodily harm, sickness, or disease, including death that results.
The limit of liability is the most paid by the insurer regardless of all of the following, except: A Number of insureds B Number of vehicles involved C Amount of surcharges to be applied to policy D Premiums shown
C Amount of surcharges to be applied to policy
Which of the following is not a duty of the insured if the insured's vehicle is damaged when it hit a tree? A Submit to a physical exam B Submit a proof of loss C Call the police D Promptly notify the insurance company
C call the police
Collision
Collision - The upset of the covered vehicle or a non-owned auto, or its impact with another vehicle or object, such as a tree. Collision is the single named peril in the policy.
converge D - Coverage for Damage to Your Auto
Coverage Part D of the personal auto policy addresses coverage for damage to the insured's auto, also known as physical damage coverage. Part D provides first-party property damage coverage for the insured's covered autos and also provides some coverage for non-owned vehicles being operated or used by the insured and family members.
An uninsured motor vehicle is any of the following, except: A A vehicle that does not have insurance B A vehicle with liability limits less than the state requirement C A vehicle insured by an insolvent insurance company D A company car
D Company car
What is the purpose of the Extended Non-Owned Coverage for a Named Individual endorsement? A Extends coverage for a leased vehicle B Covers an individual who does not own a car C Coverage is extended 25 miles into Mexico D Covers non-owned vehicles furnished for the insured's regular use
D Covers non-owned vehicles furnished for the insured's regular use
Which of the following uses of a vehicle is not excluded under the Medical Payments coverage? A A neighbor uses the insured's car without permission B An insured rides a motorcycle C An insured drives a company car D Insured uses a truck for incidental purposes
D Insured uses a truck for incidental purposes
Comprehensive covers all of the following losses, except: A Theft B Contact with a deer C Falling objects D Rollover
D rollover
Cancellation
During the first 60 days of a new policy, an insurer may cancel the policy for any reason by mailing notice to the named insured shown on the Declarations. Notice of at least 10 days is required for cancellation due to non-payment of premium, and at least 20 days advance written notice for all other reasons.
Part A- Supplementary Payments
If a bail bond is required because of an accident, the policy will pay up to $250 for the cost of the bail bond so long as the accident resulted in a covered bodily injury or property damage claim. he policy pays up to $200 a day for loss of earnings because the insurer requests attendance at hearings or trials. This does not include loss of other earnings.
No Benefit to Bailee
If a bailment relationship exists with respect to the covered vehicle, the policy will not make payment for the benefit of anyone who had care, custody, or control of the covered auto. For example, if the insured's vehicle was in the repair shop for servicing and the mechanic damaged the vehicle, this policy wouldn't make payment; the repair shop's insurance would have to pay because of its legal liability as a bailee.
Part E - Duties After an Accident or Loss
If an insured person, or anyone else, wishes to seek coverage under the personal auto policy, he/she must comply with certain duties. Failure to comply with these duties may result in claim denial if the failure to comply harms the insurance company.
Coverage C- Other Insurance
If more than one policy is in place and provides UM, the total amount the insured may collect cannot exceed the highest limit applying to any one vehicle. For example, if the insured's limits are 100/300 and the limits on the other policy are 50/100, the most the insured may collect is 100/300.
Other Insurance
If other auto liability insurance is in place at the time of the loss, the personal auto policy will only pay its share of the loss. That share is the proportion the policy's limit bears to all insurance in place. For example, if the policy provides $100,000 of property damage liability insurance and another policy also provides $100,000 of property damage liability insurance, the insured's policy will only pay ½ of the liability loss. Because the total insurance in place is $200,000 and the limit of liability provided by the insured's policy is $100,000, the insured's policy pays ½ of the total insurance in place.
Appraisal
If the insured and the insurance company are unable to agree about the amount of a loss, either party may demand an appraisal. Each party selects, and pays for, its own appraiser. The appraisers prepare separate appraisals of the actual cash value and amount of loss. If they fail to agree, they select an umpire to whom they submit their differences.
Coverage c-Arbitration
If the insurer and the insured do not agree on the recovery of damages or the amount recoverable by the insured, each party may select an arbitrator (at each party's expense) who then jointly select a third arbitrator (with the expense split equally by each party). A decision agreed upon by the arbitrators will be binding as to the insured's entitlement to, and the amount of, damages.
Coverage B: Other Insurance
If there is other applicable auto Medical Payments insurance, the insurer will pay only the proportion that its limit of liability bears to the total of all applicable limits. However, coverage for non-owned vehicles shall be excess over any other collectible auto insurance providing payment for medical or funeral expense.
Two or More Auto Policies
If two or more policies issued by the same insurer apply to the same accident, the maximum limit of liability that will be paid will not exceed the policy with the highest limit.
Business -
Includes trade, profession, or occupation. The courts have determined that business activities have two components: they are continuous in nature and offer the opportunity for profit.
Occupying
Means in, upon, getting in, getting on, getting out, or getting off a vehicle.
Coverage B: Medical Payments Coverage
Needs to be paid within three years of the incident
Part: A B C D E F
Part A-Liability Coverages Part B-Medical Payments Part C-Uninsured Motorist (UM) Part D-Coverage for Damage to Your Auto Part E-Duties After an Accident or Loss Part F-General Provisions
Coverage C-Insuring Agreement
Part C - Uninsured Motorists Coverage (UM) provides insurance to insured persons injured in accidents that are caused by another party. The other party must be legally responsible for bodily injury to an insured that arises out of the ownership, maintenance, or use of an "uninsured motor vehicle." If the other party is NOT legally responsible (or not at-fault), this coverage doesn't apply.
Property Damage
Physical injury to, destruction of, or loss of use of tangible property.
Private Passenger Auto
Shall be deemed to be owned by a person if the auto is owned or leased under contract for a continuous period of at least 6 months.
Part A- Split Limits
The amounts of coverage for bodily injury and property damage are separate. Split limits are expressed using 3 separate limits: a bodily injury (BI) limit per person, a bodily injury (BI) limit per accident, and a separate limit for property damage (PD) per accident. If Part A of a policy is written with limits of 100/300/50, the policy will provide coverage of $100,000 per person for BI with a maximum BI aggregate limit of $300,000 per accident. Additionally the policy will provide a $50,000 limit for PD per accident.
Insuring Agreement
The insurer will pay reasonable expenses incurred for necessary medical and funeral services caused by an accident, sustained by an insured, and incurred within 3 years of the accident. Unlike Liability Coverage, Medical Payments Coverage does NOT require an insured to be legally responsible for causing injuries. The policy defines insured in Part B, as:
Transportation Expenses
The insurer will pay, without application of a deductible, a maximum of $20 per day, up to $600, for transportation expenses incurred because of a collision or comprehensive loss. If the damaged auto is a non-owned auto, coverage only applies if the insured is legally responsible for the loss.
Coverage B Limit of Liability
The limit of liability shown in the Declarations is the maximum the insurer will pay for each person injured in any one accident. This is the most the policy will pay regardless of the number of insureds, claims made, vehicles or premiums shown in the Declarations, or vehicles involved in the accident. If the loss is covered under more than one Part of the policy, payment will not be duplicated.
Coverage C-Limit of Liability
The limit of liability shown in the Declarations is the maximum the insurer will pay in any one accident. This is the most the insurer will pay regardless of the number of insureds, claims made, vehicles or premiums shown in the Declarations, or vehicles involved in the accident. If the loss is covered under more than one Part of the policy, payment will not be duplicated.
Part A-Limit of Liability
The maximum limit paid under Part A - Liability Coverage is shown on the policy's Declarations. That limit applies per accident for all bodily injury and property damage arising from that one accident, including damages for care, loss of services, and a death.
You and Your
The named insured listed in the declarations, and the spouse if a resident of the same household. The named insured should always be the person or persons to whom the vehicle is titled and registered, unless it's a leased vehicle.
Transfer of Your Interest in This Policy
The named insured may not transfer or assign his/her interest in the policy without the insurer's written consent. However, if the named insured dies, the resident spouse will automatically become the named insured. By the same token, if the named insured dies, his/her legal representative will automatically become the named insured, but only with respect to legal responsibility for maintenance or use of any Your Covered Auto. This automatic coverage is provided until the end of the policy period.
Automatic Termination
The policy automatically terminates if the insured, or a legal representative, fails to accept or pay for a renewal or continuation of the policy. In addition, coverage automatically terminates if the named insured secures other auto insurance on an auto shown on the Declarations.
Termination
The policy may be terminated by either the named insured or the insurance company.
Underinsured Motorists Coverage (UIM)
This coverage is slightly different from Uninsured Motorists Coverage, and may be required by state statutes as part of the Uninsured Motorists Coverage. In other states, coverage is optional or added by endorsement. Underinsured Motorists Coverage (UIM) protects the insured against drivers who do have auto liability insurance, but whose coverage limits are inadequate or insufficient to respond to claims. The coverage pays only up to the amount that exceeds the limit of liability of the at-fault party.
Joint Ownership Coverage Endorsement (PP 03 34)
This endorsement amends the definition of "you" and "your" to refer to 2 or more individuals, other than husband and wife, who reside in the same household, or to non-resident relatives who jointly own the insured vehicle.
Miscellaneous Type Vehicle Endorsement (PP 03 23)
This endorsement changes the policy by adding a definition for "miscellaneous type vehicle," which means a motor home, motorcycle, or other similar type vehicle, ATV, dune buggy, or golf cart. In addition, to the definitions section of the policy, the endorsement amends "your covered auto" and "newly acquired auto" to include any "miscellaneous type vehicle" shown on the endorsement. The definition does not include snowmobiles.
Optional Limits Transportation Expenses Coverage
This endorsement is used when the insured wishes to increase the limits of liability for transportation expenses that are provided in the personal auto policy ($20 per day, $600 maximum). The vehicle is described on the schedule along with the increased daily limit and the increased maximum limit. The endorsement does NOT change or broaden the insurance that is provided for Transportation Expenses in Part D - Coverage for Damage to your Auto.
Extended Non-Owned Coverage for a Named Individual (PP 03 06)
This endorsement provides coverage by removing or altering some of the Personal Auto Policy's exclusions or limitations. It also covers non-owned autos furnished or available for the insured's regular use. The endorsement provides excess liability coverage for the individual named on the endorsement and for the business use of a commercial type vehicle that the named insured does not own. It can be used to provide excess liability coverage for the use of a vehicle as a public or livery conveyance.
Excess Electronic Equipment Coverage
This endorsement provides coverage for electronic equipment that is permanently installed in the vehicle in a location not used by the auto manufacturer. Coverage increases the policy limit from $1,000 to the amount shown on the endorsement. It includes $200 of coverage for tapes, records, discs, and other media used with covered excess electronic equipment.
Limited Mexico Coverage
This endorsement provides coverage on an excess basis and only for losses and accidents that occur in Mexico and within 25 miles of the U.S. border. In addition, coverage only applies if the insured's visit to Mexico is of 10 or fewer days duration.
Named Non-owner Coverage for a Named Individual
This endorsement provides liability, medical payments, and uninsured motorists coverage for individuals who do not own vehicles, but often borrow or rent autos. The endorsement is also designed for individuals who need to prove financial responsibility. Definitions are amended by this endorsement, which also amends certain exclusions. Part D - Coverage for Damage to your Auto is NOT provided by this endorsement.
Towing and Labor Costs Coverage Endorsement (PP 03 03)
This endorsement provides payment, at the designated amount, for towing to a garage or for labor performed at the site of disablement. The coverage applies per occurrence and to either a Your Covered Auto or the insured's use of a non-owned auto.
Out of State Coverage
When a "your covered auto" is being driven outside the state in which it is principally garaged (and also within the coverage territory), Part A - Liability Coverage extends to provide coverage as required by the financial responsibility or compulsory insurance laws of that state or Canadian province. For example, if the insured's policy doesn't provide Personal Injury Protection (PIP) coverage and the state in which the vehicle is being driven requires it, the insured's personal auto policy will provide PIP coverage at required limits while the insured is in that state.
Payment of Loss
When paying for losses covered under Part D, the insurer may make payment in cash or by repairing or replacing the stolen or damaged property. If making payment in the form of cash, the insurer will include any sales tax that applies to the stolen or damaged property.
Financial Responsibility
When the policy is certified as future proof of financial responsibility, the policy shall comply with the law to the extent required.
Part A- Exclusion
intentionally bodily injury property damage Property damage to owned or transported property property damage to property in the care custody or control of insured
