Chapter 20&21: Personal Automobile Insurance

Question 1

Insuring Agreement

Answer 1

Insurer agrees to pay any damages for bodily injury or property damage. And also agrees to defend you and pay all legal costs due to covered claims

Question 2

Split Limits

Answer 2

Bodily injury and property damage limits are stated separately in an insuring agreement

Question 3

Single Limit

Answer 3

When both injury and property damage are both included in an insuring agreement

Question 4

Exclusions to liability coverage

Answer 4

• Intentional injury or damage
• Property owned or transported
• Property rented, used, or in the insured’s care
• Bodily injury to an employee
• Use of a public or livery conveyance
• Vehicles used in the auto business
• Other business vehicles
• Using a vehicle without reasonable belief of entitlement
• Nuclear energy exclusion
• Ownership, maintenance, of covered vehicle while enrolled in a personal vehicle sharing program
• Vehicle with fewer than four wheels
• Vehicle furnished for named insured’s regular use
• Vehicle owned by, furnished, or made available for the regular use of any family member
• Racing Vehicle

Question 5

Medical Payments Coverage

Answer 5

The company will pay all reasonable medical and funeral expenses incurred by an insured within 3 years from the date of an accident

Question 6

Covered Persons Include:

Answer 6

• Named insured and family members
• Other persons while occupying a covered auto
• Covers accidents with MVs designed for public roads (not farm tractors, snowmobiles, and bulldozers, etc…)

Question 7

Collision Coverage

Answer 7

Covers damage to your auto from collisions, and damage from other vehicles when you are parked. Your insurer needs to pay regardless of who is at fault
- If you are at fault, that is a loss for your company
- If another driver is at fault, your company will pay you and then collect from the other driver’s company. Agree to subrogate the claim to your insurer

Question 8

Key points of collision damage waiver (CDW) of rental cars

Answer 8

• Daily fee charged by rental companies
• Consumer experts often say this is not necessary
• IIA&B does say it is worthwhile

Question 9

Duties after Loss

Answer 9

• Common sense: Call police/ambulance, exchange insurance information with other party
• Do not admit fault
• Notify your insurance company as soon as practicable
• Notify police if a hit and run occurs

Question 10

General Provisions

Answer 10

• Policy period/territory
• Termination or cancellation

Question 11

Uninsured Motorist

Answer 11

This coverage has the injured person’s insurer pay the accident victim

Question 12

Advantages to Uninsured Motorist Coverage

Answer 12

• Motorists have protection against the uninsured from their own policy
• Claim settlement is faster and more efficient than suing the uninsured using a tort liability lawsuit

Question 13

Defects of Uninsured Motorist Coverage

Answer 13

• Coverage may be limited unless higher limits purchased
• Liability of the uninsured motorist must be demonstrated
• Property damage is usually not covered

Question 14

Pros of No-Fault Auto

Answer 14

• Difficulty in determining fault
• Inequity in claim payments
• High transaction costs and attorney fees
• Fraudulent and inflated claims
• Delay in payments