Auto Flashcards
Part A
Liability Coverages
Part B
Medical Payments
Part C
Uninsured Motorist
Part D
Coverage for damage to your auto
Part E
Duties after an accident or loss
Part F
General Provisions
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.
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.
Bodily Injury
Bodily harm, sickness, or disease, including death that results
Business
Includes trade, profession, or occupation
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
Occupying
Means in, upon, getting in, getting on, getting out, or getting off a vehicle
Property Damage
Physical injury to, destruction of, or loss of use of tangible property
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
Your Covered Auto
- Any vehicle shown in the Declarations
- A newly acquired auto
- Any trailer that the insured owns
- Any auto or “trailer” the named insured doesn’t own while being used as a temporary substitute for any other vehicle described in this definition, which is out of the normal use because of:
- -Breakdown
- -Repair
- -Servicing
- -Loss
- -Destruction
Newly Acquired Auto
A private passenger auto
A pickup or van, for which no other insurance policy provides coverage, if the auto:
Has a gross vehicle weight of 10,000 pounds or less.
Is not used for delivery or transportation of goods and materials, unless such use is incidental to the insured’s business of installing, maintaining, or repairing furnishings or equipment, For example, if the insured is a plumber; he may use his pickup or van for the transportation of his tools.
Newly Acquired Auto Coverages
For all coverages EXCEPT Part D – Coverage for Damage to your Auto, coverage begins on the date the named insured becomes the owner.
If newly acquired auto is an additional vehicle, the insured must report to the insurer within 14 days.
A replacement auto for another with all coverages except collision and comprehensive (other than collision) is covered for liability and medical payments for the remainder of the policy period, even if the insured does not report the replacement.
Newly Acquired Auto Part D
Coverage for Damage to your Auto automatic coverage begins on the date the named insured becomes the legal owner of the vehicle.
The insured must report the newly acquired auto to the insurer for coverage to continue. If the insured doesn’t report as required, coverage ends after either 4 or 14 days.
If the Declarations page indicates that either Collision or Other than Collision coverage applies to at least one vehicle, the insured has 14 days to report for either coverage to apply. Automatic coverage ends after 14 days if the insured doesn’t report.
If the Declarations page indicates that NO Collision or Other than Collision coverage applies to at least one vehicle, the insured has 4 days to report for coverage to apply. Automatic coverage ends after 4 days if the insured doesn’t report.
How many days must an insured report the purchase of a new vehicle WITH collision? WITHOUT?
14 With
4 Without
Part A - Liability Coverage
Insuring Agreement
The insurer will:
Pay damages for bodily injury or property damage for which any insured becomes legally responsible.
Settle or defend any claim or suit asking for such damages.
Pay all defense costs it incurs, in addition to the liability limits. The insurer’s duty to settle or defend ends when the limit of liability is exhausted.
The insurer will not defend or settle any suit or claim that is not covered under this policy. The policy defines insured in Part A as:
The named insured or any family member for the ownership, maintenance, or use of any auto.
Any person using the covered auto with permission.
A person or organization, for “your covered auto,” if legally responsible for an insured.
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.
If defending a suit, the insurer will pay premiums on appeal bonds and bonds to release attachments.
Any interest that accumulates after a judgment has been entered will also be paid by the insurer if it defends a suit.
The 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.
The policy will also pay for reasonable expenses incurred at the insurer’s request. This does NOT include traffic fines.
Part A Exclusions
Liability coverage is not provided for any insured who:
Intentionally causes bodily injury or property damage.
Causes property damage to property he or she owns or is transporting.
Causes property damage to property rented to, used by, or in the care of that insured. An exception exists for damage to a residence or private garage—this is the care, custody, or control exclusion.
Is responsible for causing bodily injury to an employee (of that insured) during the course of employment by that insured.
Owns or is operating a vehicle while it’s being used as public or livery conveyance (meaning it has been hired out to the general public). A vehicle used in a share-the-expense car pool is not considered a public or livery conveyance.
Is employed or engaged in the business of selling, repairing, servicing, storing, road testing or parking motor vehicles. An exception exists if the vehicle is being used by an insured, a family member, or a partner or employee of these. For example, Mary’s son is a mechanic. If he’s test-driving Mary’s car and crashes it, the exception to the exclusion applies—meaning he has coverage. However, if his co-worker crashes Mary’s car, the exception doesn’t apply because the co-worker is not related to Mary, nor is he her partner or employee.
Is using a vehicle while employed or engaging in business. However, a coverage giveback applies to private passenger autos, pickups, vans, and owned trailers used with such vehicles.
Is using a vehicle without the reasonable belief that he or she is entitled to drive it. Family members always have a reasonable belief of entitlement to drive a “your covered auto” under this coverage.
Vehicles that have fewer than four wheels, such as motorcycles
Vehicles designed mainly for use off public roads, such as snowmobiles or ATVs. An exception applies for off-road vehicles used by an insured in a medical emergency, “trailers,” or non-owned golf carts.
Vehicles owned by the insured that are not insured on this policy OR not owned by the insured, but are furnished to the insured or available for the insured’s regular use, such as a company car
Vehicles owned by a family member that aren’t insured by this policy OR not owned, but are furnished to a family member or available for the family member’s regular use, such as a company car
Vehicles located inside a racing facility for the purpose of competing, practicing, or preparing for a race or speed contest
Part A Limit of Liability
Shown on Dec page. Limit applies per accident for all BI and PD arising from that one accident regardless of number of insureds, claims made, vehicles or premiums on dec page, vehicles involved in accident.
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.
Combined Single Limit
The limit of the policy may be applied to bodily injury (BI) and/or property damage (PD). A combined single limit policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD).
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.
Financial Responsibility
When the policy is certified as future proof of financial responsibility, the policy shall comply with the law to the extent required.
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.
This policy pays liability losses on an excess basis for non-owned vehicles. For example, the covered loss involves a car the insured borrowed from his neighbor. The insurance in place on the neighbor’s car must pay first (it’s primary insurance) and then this policy will pay (it’s excess insurance).
Part B – Medical Payments Coverage
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:
The named insured or any family member occupying any auto; or as a pedestrian when struck by a motor vehicle designed for use mainly on public roads. These vehicles do NOT have to be owned by the insured and include any type of trailer.
Any other person, such as a passenger, while occupying the insured auto.
Part B - Medical Payments Exclusions
Bodily injury sustained by insured is NOT covered when an insured is:
occupying vehicle with less than 4 wheels
occupying a vehicle being used as a public or livery conveyance
occupying any vehicle hat is located for use as a residence or premises
sustains BI in the course of employment when worker’s comp are required or available
occupying or struck by a vehicle owned by insured that is NOT “your covered auto” (company car)
occupying or struck by a vehicle owned by a family member
using a vehicle without belief they are entitled to
using a vehicle while conducting business; Coverage giveback applies! (excludes business use of trucks/commercial vehicles)
as a result of any war or nuclear hazard
racing or speed contest
Part B Medical Payments Coverage Limit of Liability
shown in Dec page; max the insurer will pay for each person injured in any one accident. Regardless of number of insureds, claims made, vehicles or premiums shown, vehicles involved. No duplicate payments.
Part B Medical Payments Coverage Other Insurance
If there is other applicable auto medical payments insurance, insurer will only pay the proportion that its limit of liability bears to the total of all applicable limits. Coverage for non-owned vehicles will be excess over any other collectible auto insurance providing payment for medical or funeral expense.
Part C - Uninsured Motorist Coverage
Insuring Agreement
provides insurance to insured persons injured in accidents that are caused by another party. The other party must be legally responsible for BI to an insured that arises out of ownership, maintenance, or use of an uninsured motor vehicle. If the other party is not at fault, coverage does not apply. Insurer will pay damages that an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of BI. Unless the policy specifically states that Uninsured Motorist Physical Damage (UMPD) is also provided, this section only applies to BI.
Definition of Insured for UM
Named insured or any family member
Any person occupying “your covered auto”
Any person who is entitled to recover damages because of BI sustained by an insured and covered by the policy.
UM Coverage definition of “uninsured motor vehicle”
Does not have insurance or bond in place at the time of the accident
Has insurance but BI limit is less that required by law
Hit-and-Run
Has insurance but insurer denies the claim or becomes insolvent (won’t pay)
Vehicles NOT included in definition of “Uninsured motor vehicle”
A vehicle owned by named insured or family member OR a regularly used vehicle by either (company car)
A vehicle that is owned or operated by self-insured unless they become insolvent\
A vehicle owned by a gov agency
A vehicle that operates on rails or crawler treads
A vehicle used off public roads (atv, snowmobile)
A vehicle used as permanent residence (motor home or trailer)
Part C Exclusions
Insured or family member struck by a vehicle owned by insured or family member not insured by this policy
Insured/Legal rep settles an UMBI liability claim and that settlement impairs insurer’s ability to recover payments made to any insured
Insured is occupying “your covered auto” while it’s being used as a public or livery conveyance
Insured is using a vehicle without being entitled to drive it
While insured by worker’s comp or disability insurance. Both must pay before this coverage applies
If insured is legally responsible for punitive or exemplary damages
Part C - UM Coverage Limit of Liability
Limit of Liability shown in Dec page is the max insurer will pay in one accident. Regardless of number of insureds, claims made, vehicles or premiums in dec page, or vehicles involved in the accident. No duplicate payments.
Part C - UM Coverage Other Insurance
If more than one policy is in place and provides UM, the total amount the insured may collect may not exceed he highest limit applying to one vehicle. If the insured’s limits are 100/300 and limits on other policy are 50/100, the most the insured may collect is 100/300. If loss occurs while insured is occupying a non-owned vehicle, policy covering non-owned applies first. Insured’s coverage is excess. If more than one policy applies, the insurer pays only its share of the loss, which is the proportion that its limit of liability bears to the total amount of all applicable coverage.
Part C - UM Coverage Arbitration
If the insurer and insured do not agree on recovery damages or the amount recoverable by the insured, each party may select an arbitrator (at their own expense) who then jointly select a third arbitrator (expense split equally) and a decision agreed upon by them will be binding as to insured’s entitlement to and the amount of damages.
Part C - UM Coverage
UNDERinsured Motorists Coverage (UIM)
Slightly different from UM. May be required by state as part of UM. Protects the insured against drivers whose coverage limits are inadequate to respond to claims. Only pays up to the amount that exceeds the limit of liability of the at-fault party.
Part D - Coverage for Damage to your auto
“Physical Damage Coverage”
First party PD coverage for the insured’s covered autos and some coverage for non-owned vehicles being used by insured and family.
Part D -Coverage for Damage to Your Auto
Insuring Agreement
Pays for direct and accidental damage, regardless of fault, subject to the policy’s exclusions. Covered vehicles are “your covered auto” and non-owned autos. A deductible applies and will be the amounts shown on Dec page for Collision coverage and Other Than Collision (Comprehensive), deductibles for collision and comprehensive do not need to be the same.
If this coverage pays for damage to a non-owned auto, broadest coverage on Dec page will apply.
Definition off Collision
The upset of the covered vehicle or a non-owned, or its impact with another vehicle or object, such as a tree. Collision is the single named peril in the policy.
Definition of OTC/Comprehensive
Provides coverage on an open perils basis which is all causes of loss other than collision loss and not excluded on the policy. Includes but is not limited to: Missiles/Falling objects Fire Theft/Larceny Explosion/Earthquake Windstorm Hail, water, flood Malicious mischief/vandalism Riot/Civil commotion Contact w animal Breakage of glass (possibly could be collision coverage if caused by an accident)
Definition of Non-owned auto
Any private passenger auto, pickup, van, or trailer not owned by, furnished, or available for the regular use of the named insured or family member while being used by named insured or family member.
Any auto or trailer being used as a temporary substitute for the covered auto while the covered auto is broken down, being repaired, being serviced, loss, or destroyed.
Part D Transportation Expenses
Insurer will pay (with no deductible) a max of $20/day up to $600 for transportation expenses because of a collision or comprehensive loss. If damage is a non-owned auto, insurer will only pay expenses made during 48 hours after the theft and ending when the auto is returned to use or insurer pays for the loss.
If the loss is caused by a peril other than theft of the auto, insurer will only pay expenses from when the auto is withdrawn from use for more than 24 hours.
Part D Exclusions
Insured vehicle used as public/livery conveyance.
Damage solely from wear and tear or road damage to tires.
Losses due to war or nuclear hazard.
Electronic equipment unless it’s permanently installed in the vehicle.
Tapes, disks, media.
Total loss due to destruction or confiscation by gov or civil authorities.
Trailer, camper. or motor home if it’s not on dec page unless it’s non-owned trailer or is acquired during policy period and insured reports the purchase within 14 days.
Non-owned auto when used by the insured/family member without permission.
Loss to radar and laser detection devices.
Custom furnishings & equipment in any pickup/van. Caps, bedliners, or covers on any pickup ARE NOT excluded.
Non-owned auto being used in auto business.
Any auto located at racing facility for racing.
Part D Limit of Liabiliy
Insurer’s limit of liability for loss is the lesser of the ACV of the vehicle OR amount necessary to repair/replace vehicle.
In the event of a total loss, adjustments will be made for depreciation and physical condition.
If a repair or replacement results in better than like kind or quality, the insurer will not pay for the betterment.
Max limit of $1500 for a non-owned trailer and $1000 for some electronic equipment.
Part D Payment of Loss
Insurer may make payment in cash by repairing or replacing stolen or damaged property. If making payment in the form of cash, insurer will include any sales tax.
If stolen property is recovered, the insurer has the option of keeping the stolen property or returning it to named insured. If insurer returns it, it must pay for damages resulted from the theft.
Part D No Benefit to Bailee
Policy will NOT make payment for the benefit of anyone who had care, custody, or control of a covered auto.
Part D Other Sources of Recovery
This policy only pays is proportionate share of the loss. Will pay on excess basis.
Part D Appraisal
Each party selects and pays for their own appraiser, if they disagree they hire an umpire.
If any 2 of 3 parties agree, that decision is binding. Insured and Insurer share expenses for umpire and appraisal.
Part E - Duties After an Accident or Loss
When submitting claims to insurance company for a covered loss, must:
Notify insurer promptly about how, when, and where accident or loss occurred. Provide names and addresses of injured or witnesses.
Cooperate with investigation.
Promptly send any copies of notices or legal papers received.
Submit to physical exam if reasonably required.
Authorize insurer to obtain copies of medical reports or other needed records.
Submit a proof of loss when required.
If a hit and run driver is involved, must promptly notify police.
Part F - General Provisions
Bankruptcy - insurer must comply even if insured declares bankruptcy
Changes - must be in a written endorsement issued by insurance company
Fraud - no coverage is provided for any insured who commits fraud
Legal Action Against Insurer - no legal action may be taken against insurance company unless they have complied fully with policy.
Right to Recover Payment - If a claimant recovers from another party after insurer has made payment, they must reimburse the insurance company.
Part F - Policy Period and Territory
Policy only provides coverage for accidents and losses that occur during policy period and within the territory. Mexico is NOT in policy territory.
Part F - Termination
Policy may be terminated by named insured OR insurance company
Part F Cancellation
Named Insured may cancel for any reason giving advance written notice of the date the cancellation is to take effect.
During first 60 days of a new policy, insurer may cancel for any reason by mailing notice. At least 10 day notice is required due to non-payment of premium and at least 20 days advance notice for all other reasons.
After 60 days, Insurer May Cancel Because:
Nonpayment of premium
Fraud
Insured’s license suspended/revoked
Non-Renewal
Insurer may elect. Must give the insured written notice before end of policy period at least 20 days prior. Most states require insurer to list reason for non-renewal.
Automatic Termination
Policy automatically terminates if the insured or legal rep fails to accept or pay for a renewal. Automatically terminates if named insured secures other auto insurance.
Other Termination Provisions
Proof of mailing of any notice constitutes sufficient proof of notice
If policy is cancelled, insured may be entitled to a premium refund
Effective date of cancellation stated in notice is the end of the policy period
Transfer of Your Interest in this Policy
Named insured may not transfer/assign their interest in the policy without insurer’s written consent. If named insured dies, resident spouse or legal rep will automatically become named insured. Only lasts until end of policy period.
Two or More Auto Policies
If 2 or more policies issued by same insurer apply to same accident, max limit of liability that will be paid will not exceed policy with the highest limit.
Selected Endorsements - Extended Non-Owned Coverage for Named Individual (PP 03 06)
Provides coverage by removing or altering some of the Personal Auto Policy’s exclusions or limitations. Covers non-owned autos furnished or available for insured’s regular use.
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 conveyance.
An extra premium charge applies for liability and medical payments purchased by this endorsment.
Towing and Labor Costs Coverage Endorsement (PP 03 03)
Provides payment at designated amount for towing to a garage or for labor performed at the site of disablement. Applies per occurrence and either to a Your Covered Auto or insured’s use of a non-owned auto.
Misc Type Vehicle Endorsement (PP 03 23)
Changes the policy by adding a definition for “misc type vehicle” (motor home, motorcycle, atv, dune buggy, golf cart) Endorsement amends your covered auto and newly acquired to include any “misc type vehicle”. DOES NOT INCLUDE SNOWMOBILES.
Various exclusions under Parts A B & D are also amended to remove exclusions for damage to and injuries arising out of vehicles having fewer than 4 wheels and vehicles designed mainly for off road use. Excludes coverage for any non-owned vehicles, other than temp substitute vehicle.
Named Non-Owner Coverage for a Named Individual
Provides liability, med payments, and UM coverage for individuals who do not own vehicles, but often borrow or rent autos. Covers only the person named; spouse and family members may be included. Provides only Liability, Med Payments, and UM Coverages.
Excess Electronic Equipment Coverage
Provides Coverage for electronic equipment permanently installed in the vehicle, increases policy limit from $1000 to amount on endorsement. Includes $200 for excess media.
Limited Mexico Coverage
Provides coverage on excess basis and only for losses and accidents that occur in Mexico within 25mi of US border. Only applies if visit is 10 days or less. Only applies if existing liability insurance is in place and was issued by a licensed insurance company organized in Mexico. No coverage is provided for anyone who is a citizen or resident of Mexico.
Optional Limits Transportation Expenses Coverage
Used when the insured wishes to increase limits of liability for transportation expenses that are provided in the personal auto policy ($20/day, $600 maximum). Does NOT change or broaden the insurance that is provided in Part D.
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.
(Non-resident relatives - 2 or more persons related by blood, marriage, or adoption who reside in separate households)
