Chapter 6 - Personal Auto Policy

Question 1

ARBITRATION

Answer 1

is used when the insurer and the insured do not agree on the recovery of damages or the amount recoverable by the insured. Each party selects an arbitrator who then jointly select a third arbitrator who determines the insured’s amount of damages.

6.4

Question 2

AUTO POLICY PARTS

Answer 2

Part A - Liability Coverages

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

In addition to the limit of liability, the insurer also makes other 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 B -** Medical Payments
• 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 C - Uninsured Motorist (UM)

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. The insurer will pay damages that an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury. Unless the policy specifically states that Uninsured Motorist Physical Damage (UMPD) is also provided, this section of the policy only applies to bodily injury damages.

Part D - Coverage for Damage to Your Auto

Part E - Duties After an Accident or Loss

Part F - General Provisions

———————————— PLUS ————————————

Selected Endorsements

The Personal Auto Policy was designed to provide insurance for eligible vehicles that are owned by one or more individuals. Eligible vehicles are private passenger vehicles including cars, SUVs, passenger vans, and pickups with a gross vehicle weight of 10,000 pounds or less.The primary use of eligible vehicles must be personal, although incidental business use is allowed—e.g., making sales calls. Delivery or commercial use of an eligible vehicle renders it ineligible for the personal auto policy and requires it to be insured on a business auto policy.

Question 3

BODILY INJURY

Answer 3

Bodily harm, sickness, or disease, including death that results.

6.1

Question 4

BUSINESS

Answer 4

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.

6.1

Question 5

COLLISION

Answer 5

is the upset of the covered vehicle or a non-owned auto or its impact with another vehicle or object.

i.e. AUTO TO AUTO ACCIDENT

AUTO TO TREE

AUTO TO MAILBOX

6.5

Question 6

COVERED AUTO

Answer 6

o is any vehicle shown in the Declarations, a newly acquired auto, any trailer the insured owns, or a non-owned auto or trailer while being used as a temporary substitute vehicle.

6.1

Question 7

FAMILY MEMBER

Answer 7

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.

6.1

Question 8

MAXIMUM LIMIT PAID

Answer 8

under Part A – Liability Coverage is shown on the policy’s Declarations and applies per accident for all bodily injury and property damage arising from one accident, including damages for care, loss of services, and death.

6.2

Question 9

MEDICAL PAYMENTS COVERAGE

Answer 9

the insurer will pay reasonable expenses incurred within 3 years of the accident. The limit applies per person and payments are only made for necessary medical and funeral services caused by the accident.

6.3

Question 10

NEWLY ACQUIRED AUTO

Answer 10

is one to which the named insured takes title and either replaces an existing vehicle owned by the named insured, or a vehicle that increases the total number of vehicles owned by the named insured.

6.1

Question 11

NEWLY ACQUIRED AUTO

Answer 11

1. Vehicles purchased by the named insured during the policy period that are:
   
   1. Private passenger autos, OR
   2. Pickup or van that:
      
      1. Are not insured elsewhere
      2. Have a GVW of 10,000 pounds or less
      3. Are not used for delivery or the transportation of goods and materials other than incidental to the insured’s installation business
2. For all coverages EXCEPT Part D-Coverage for Damage to your Auto, coverage begins on the date the named insured becomes the owner
   
   1. If newly acquired auto is an additional vehicle, insured must report to insurer within 14 days
   2. If newly acquired is a replacement vehicle, insured doesn’t need to report
3. For Part D
   
   1. Coverage for damage to your auto, the newly acquired auto MUST be reported to the insurer within 4 or 14 days:
      
      1. Within 4 days if NO Part D appears on Declarations
      2. For adding a vehicle Within 14 days if Part D appear on Declarations
      3. For Trade-Ins have that coverage until end of policy term

Question 12

NON-OWNED AUTO

Answer 12

is any private passenger auto, pickup, van, or trailer not owned by, furnished to, or available for the regular use of the named insured or a family member, while being used by the named insured or a family member.

But that are not titled to the insured

6.5

Question 13

OCCUPYING

Answer 13

Means in, upon, getting in, getting on, getting out, or getting off a vehicle. In or on a vehicle.

6.1

Question 14

OTHER INSURANCE

Answer 14

applies at the time of the loss, the personal auto policy will only pay its share of the loss in the proportion the policy’s limit bears to all insurance in place.

6.2

Question 15

OTHER THAN COLLISION (OTC, COMPREHENSIVE)

Answer 15

provides open perils coverage for loss caused by any peril that is not excluded in the policy.

• falling objects
• fire
• theft or larceny
• earthquake
• windstorm
• hail
• vandalism
• contact with birds or animals

6.5

Question 16

OUTSIDE THE STATE

Answer 16

When a covered auto is driven outside the state in which it is principally garaged, Part A – Liability Coverage extends to provide coverage required by the financial responsibility or compulsory insurance laws of that state or Canadian province.

6.2

Question 17

OWNED AUTO

Answer 17

owned autos are vehicles titled to the insured or acquired during the policy period

Question 18

PART A EXCLUSIONS

Answer 18

s include bodily injury or property damage intentionally caused by an Insured; property in the insured’s care, custody, and control; bodily injury to an insured’s employee while working for the insured; using a vehicle as public or livery conveyance; working in the automobile business or using a vehicle while engaged in business; and a vehicle used by a person without the reasonable belief of entitlement to drive it.

6.2

Question 19

PART A LIABILITY

Answer 19

does not apply to vehicles with fewer than four wheels, vehicles that are owned but not insured, uninsured vehicles owned by family members; vehicles furnished for the regular use of the named insured or family members; and vehicles inside a racing facility used for competing in, practicing in, or preparing for a race.

6.2

Question 20

PART B MEDICAL PAYMENT EXCLUSIONS

Answer 20

include an insured occupying a vehicle with fewer than 4 wheels, using a vehicle as a public or livery conveyance or a residence, struck by an uninsured vehicle owned or furnished to an insured family member, using a vehicle without the reasonable belief of entitlement to drive it, using a vehicle while engaged in business, or when Workers’ Compensation benefits apply, or injuries sustained due to war, nuclear hazard, or racing.

• regardless of fault
• if you as an insured is a pedestrian can use medical payment
• pays per person
• Statue of limitations is 3 years of the accident
  6. 3

Question 21

PART C - UNINSURED MOTORISTS COVERAGE (UM)

Answer 21

provides insurance to persons injured in accidents caused by another party who is legally responsible for injuries to an insured that arise out of the ownership, maintenance, or use of an uninsured motor vehicle.

Does not include these vehicles

• a company car
• self=insured
• owned by a government agency
• operates on rails or crawler treads
• designed mainly for use off public roads
• located for use as a residence or premises

6.4

Question 22

PART C EXCLUSIONS

Answer 22

are accidents involving an owned vehicle that is uninsured, a vehicle while being used as a public or livery conveyance, the insured using a vehicle without the reasonable belief of entitlement to drive it, using a vehicle while engaged in business, when Workers’ Compensation benefits apply, and punitive or exemplary damages.

6.4

Question 23

PART D EXCLUSIONS

Answer 23

include an insured vehicle being used as a public or livery conveyance; damage as a result of wear and tear; freezing; mechanical breakdown; road damage to tires; war or nuclear hazard; tapes, records, disks, or other media; and electronic equipment unless it’s permanently installed in the vehicle.

6.5

Question 24

PART D EXCLUSIONS

Answer 24

also include total loss by government or civil authorities; loss to radar or laser detection devices and equipment; coverage for custom furnishings and equipment in any pickup or van; a non-owned auto being used in the auto business; or any auto when located at a racing facility for organized racing.

6.5

Question 25

PART D LIMIT OF LIABILITY

Answer 25

for loss is the lesser of the actual cash value (ACV) of the vehicle or the amount necessary to repair or replace the vehicle with another of like kind and quality. Part D does not pay for betterment.

6.5

Question 26

PART D- COVERAGE FOR DAMAGE TO YOUR VEHICLE

Answer 26

also known as the physical damage coverages collision and other than collision, pays for direct and accidental damage, regardless of fault, to the insured’s covered vehicles and non-owned autos.

6.5

Question 27

PART E-DUTIES AFTER AN ACCIDENT OR LOSS

Answer 27

1. include prompt notification of any claims and legal papers received;
2. cooperation in the claims investigation and settlement;
3. submission to a physical exam;
4. authorization for the insurer to obtain copies of medical reports and records;
5. submission of a requested proof of loss;
6. notification to the police if a hit-and-run driver is involved;
7. and protection of property from further damage.
8. allowing the insurer to inspect and appraise the damaged property

6.6

Question 28

PART F-GENERAL PROVISIONS

Answer 28

1. include bankruptcy or insolvency of an insured;
2. changes to the policy;
3. fraud;
4. legal action against the insurer;
5. right to recover payment;
6. policy period and territory; TCUPP
7. policy termination provisions;
8. transfer of the insured’s interest in the policy;
9. and accident payments involving two or more insured auto policies.

6.7

Question 29

PRIVATE PASSENGER AUTO

Answer 29

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.

6.1

Question 30

PROPERTY DAMAGE

Answer 30

Physical injury to, destruction of, or loss of use of tangible property.

6.1

Question 31

REGARDLESS OF FAULT

Answer 31

Medical payments coverage applies, regardless of fault, to any insured occupying any auto or as a pedestrian when struck by a motor vehicle designed for use mainly on public roads.

6.3

Question 32

SELECTED ENDORSEMENTS

Answer 32

s for the personal auto policy include Extended Non-Owned Coverage for a Named Individual, Towing and Labor Costs Coverage Endorsement, Miscellaneous Type Vehicle Endorsement, Named Non-owner Coverage for a Named Individual, Excess Electronic Equipment Coverage, Limited Mexico Coverage, Optional Limits Transportation Expenses Coverage, and Joint Ownership Coverage Endorsement.

6.8

Question 33

STACKED

Answer 33

. If a loss is covered under more than one Part of the policy, payment will not be duplicated or stacked

6.2

Question 34

SUPPLEMENTARY PAYMENTS

Answer 34

under Part A – Liability Coverage include the cost of bail bonds $250, appeal bonds, post-judgment interest, loss of earnings $200 a day, and reasonable expenses while assisting the insurer in the defense of a claim.

6.2

Question 35

TEMPORARY SUBSTITUTE VEHICLE

Answer 35

is a non-owned vehicle used in place of an insured vehicle that is out of normal use due to breakdown, repair, servicing, loss, or destruction.

6.1

Question 36

TOTAL THEFT OF THE COVERED AUTO OR A NON-OWNED AUTO

Answer 36

If a loss is caused by this, the insurer will only pay transportation expenses incurred during the period that begins 48 hours after the theft and ends when the auto is returned to use or the insurer pays for the loss. Payments begin 24 hours after loss caused by all other covered perils.

6.5

Question 37

TRAILER

Answer 37

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.

6.1

Question 38

PART D-TRANSPORTATION EXPENSES

Answer 38

coverage pays for the cost of transportation expenses incurred as a result of a covered collision or other than collision loss. No deductible applies and the limit of coverage is up to $20 per day, or a total of $600.

Payment starts 24 hours after the loss except for total theft

Waiting period for theft loss is 48 hours.

6.5

Question 39

UNDERINSURED MOTORISTS COVERAGE (UIM)

Answer 39

covers the insured against drivers who have auto liability insurance but the coverage limits are inadequate. UIM coverage will pay the amount over the at-fault driver’s coverage up to the UIM limit.

6.4

Question 40

YOU AND YOUR

Answer 40

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

6.1

Question 41

YOUR COVERED AUTO

Answer 41

1. Any vehicle shown in the Declarations
2. A newly acquired auto
3. Any trailer that the insured owns
4. Temporary substitute - 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

A temporary substitute is NOT a “your covered auto” under Part D – Coverage for Damage to your Auto.

Question 42

LIABILITY EXCLUSIONS

Answer 42

• vehicles less than 4 wheels * (misc. type vehicle endorsement)
• intentional bodily injury or property damage
• property damage to property the insured owns or is transporting
• property damage to property in care, custody, or control of the insured (exception if damage occurred to a residence or private garage)
• bodily injury to employees of the insured during course of employment as well as public or livery conveyance
• while employed or engaged in business (some exceptions apply)
• coverage while employed selling, repairing, servicing, storing or parking a vehicle.
• using v3heicle as a taxi
• racing
• using vehicle without a reasonable belief of entitlement (theft)

Question 43

COMMON ENDORSEMENTS

Answer 43

Extended Non-Owned Coverage - covers non-owned autos furnished for regular use (excess liability for company car)

Towing & Labor - towing to a garage or for labor performed at the site if disablement

Misc. Type Vehicle Endorsement - which means a motor home, motorcycle, or other similar type vehicle, ATV, dune buggy