Chapter 18 - Personal Auto and Umbrella Liability Insurance Flashcards
Financial Responsibility Law
A law in all states that requires proof of future auto insurance after certain circumstances occur. These can include an auto accident, conviction for certain traffic offenses, or failure to pay a legal judgment that arises from an auto accident.
Unsatisfied Judgment Fund
A fund in some states to compensate victims who are unable to collect a legal judgment that results from an auto accident. The maximum amount that can be received is usually equal to a state’s financial responsibility limits.
Uninsured Motorists Coverage
An auto insurance coverage that enables an insured to collect from his or her own insurance company for bodily injury (and property damage in a few states) that is caused by a legally liable but uninsured driver.
Underinsured Motorists Coverage
An auto insurance coverage that enables an insured to collect from his or her own insurance company for bodily injury (and property damage in a few states) that is caused by a legally liable but underinsured driver. Covers the difference between the limit of the underinsured motorists coverage and the amount of the auto liability insurance carried y the underinsured driver.
Pure No-Fault
A no-fault system with no right to sue a negligent party. No state has a pure no-fault law.
Modified No-Fault
A no-fault system with the right to sue another party once certain monetary or verbal thresholds are exceeded
Add-On Plan
A no-fault type of auto insurance system that makes first-party benefits available but does not restrict the right to sue for damages
Choice No Fault
A modified No-Fault law that allows an insurance applicant either to elect traditional tort coverage or to elect no-fault coverage at a reduced premium
Personal Injury Protection (PIP) Endorsement
The usual name for an endorsement that provides a state’s no-fault auto insurance benefits
Covered Auto
A vehicle specifically listed in the policy declarations of an auto insurance policy. In the Personal Auto Policy, “your covered auto” also includes newly acquired autos, trailers, and temporary substitute vehicles.
Newly Acquired Auto
In personal Auto Insurance, an auto that meets a policy’s eligibility requirements but is acquired after the effective date of the policy
Temporary Substitute Vehicle
In personal auto insurance, a vehicle not owned by the insured while it is used temporarily in place of a covered auto that is out of normal use because of breakdown, repair, servicing, loss, or destruction.
Split Limits
In auto liability insurance, separate limits that apply to any one person for bodily injury, to the aggregate for all bodily injury claims in an accident, and to property damage liability claims
Collision
In auto insurance, the upset of an auto or its impact with another vehicle or object
Other than Collision
The term used in auto insurance to refer to physical damage to a vehicle that is not caused by collision. Formerly referred to as comprehensive.
