Automobile Insurance Flashcards
Four types of coverage provided by automobile insurance policies
i. Liability: (1) coverage for others, (2) coverage for the insured
1. State-imposed minimums: in Nebraska, $25K/person, $50K/accident
ii. Property damage
1. State imposed minimums: in Nebraska, $25K/accident
iii. Uninsured motorists
iv. Medical Payment Coverage (MPC)
1. Covers everybody in the vehicle (insured and passengers)
Non-liability automobile insurance coverage that can be elected
i. Collision: (1) collisions that are the fault of the insured, (2) hit and run
ii. Comprehensive: non-collision damages (hail, wind, vandalism, theft, deer)
iii. Uninsured and underinsured
iv. Rental reimbursement
v. Travel Network Coverage (TNC) - Uber/Lyft drivers
1. Covers that gap that exists when Uber driver are traveling to pick up a rider
a. Personal coverage stops once the driver starts the trip, and Uber’s coverage doesn’t start until the driver picks up the rider.
Automobile insurance discounts offered
Multiple car, multiple line, vehicle safety, good driver, steer clear, accident-free, good student, telematics
St. Paul Fire & Marine Insurance Company v. Smith
Defendants’ allowed their son to drive their car, even though they had excluded him on their insurance policy for drunk driving. Their son was involved in a car crash that killed him and a husband and wife. The insurer brought a declaratory judgment action seeking pronouncement that it was not required to defend the defendants. Defendants’ claimed state law required that their son was covered, since he was driving their car with their permission.
A named-driver exclusion in an automobile-liability insurance policy does not violate public policy. Where state law requires coverage for permitted drivers, but excepts any excluded drivers under the policy, the insurer may avoid coverage for the excluded drivers.
Omnibus clause
A clause in an auto liability insurance policy that provides coverage for any drivers who are driving a covered automobile with the insured’s permission
Griffitts v. Old Republic Insurance Company
BNSF allowed employees to drive company vehicles to remote job sites. While on location the employees were allowed to drive the company vehicles for personal use, as well. This was not an express rule, but a common practice to which BNSF did not object. A BNSF employee drove a company car while drunk and rear-ended another driver. BNSF’s insurer claimed the employee was not a permissive driver, and the trial court agreed, citing a policy prohibiting using alcohol while operating company vehicles.
An omnibus clause in an insurance policy covers anyone the insured gives express or implied permission to use the vehicle, even if the user violates rules governing the vehicle’s operation.
State Farm Mutual Automobile Insurance Company v. Davies
Defendant was injured in a car accident with Turner and sought damages. Turner was insured by State Farm and explained her version of events, which was a defense that the insurer could raise in the case. However, Turner failed to appear. State Farm argued this was a breach of the policy’s cooperation clause that allowed it to disclaim liability.
The breach of an automobile-liability policy’s cooperation clause prejudices the insurer in its defense of an action for damages against the insured.
Carriers Insurance Company v. American Policyholders’ Insurance Company
Cummings rented vehicles from Merrill’s for its employees to drive. Merrill’s insured the vehicles with a large liability policy from the plaintiff. Cummings obtained a smaller liability insurance policy itself from the defendant. Both policies contained other-insurance clauses that made it secondary to the other policy, creating circular redundancy. One of Merrill’s employees was involved in a car accident, and plaintiff settled the claim and then sought contribution from the defendant.
Where two different insurance policies issued by two different insurers have dueling other-insurance clauses that would, if read together, deny coverage to the insured, the insurers should bear the loss together.
