Chapter 6: Personal Auto Policy Flashcards
Part A
Liability Coverage
Part B
Medical Payments
Part C
Uninsured Motorist (UM)
Part D
Coverage for Damage to Your Auto
Part E
Duties After an Accident or Loss
Part F
General Provisions
Personal Auto Policy designed to provide insurance for a gross weight vehicle of…
10,000 pounds or less
Definitions:
Named insured listed in the declarations
-person(s) who vehicle is titled and registered
You and Your
Definitions:
Deemed owned if auto is owned or leased under contract for a continuous period of at least 6 months
Private Passenger Auto
Definitions:
Bodily harm, sickness, or disease, including death that results
Bodily Injury
Definition:
Trade, profession, or occupation
Business
Definition:
Means in, upon, getting in, getting on, getting out, or getting off a vehicle
Occupying
Definition:
Designed to be pulled by a private passenger auto or a pickup or van
Trailer
Definition:
- In the declarations
- Newly acquired auto
- Trailer that the named insured owns
- Auto or trailer named insured doesn’t own while being used as a temporary substitute for any other vehicle described in this definition
Your Covered Auto
Definition:
Any of the following types of vehicles for which the insured becomes the owner during the policy period
-10,000 pounds or less
-If newly acquired auto is an additional vehicle, insured must report to insurer within 14 days
-Under Part D automatic coverage begins on the date the named insured becomes the legal owner of the vehicle
*coverage ends after either 4 or 14 days
*if dec pg. indicates that either collision or other than collision coverage applies; insured has 14 days to report
*if dec pg. indicates that NO collision or other than collision coverage applies; insured has 4 days to report
Newly Acquired Auto
Under Part D, Within how many days must an insured report the purchase of a new vehicle that is replacing an existing vehicle covered by collision coverage?
14 days
A private passenger auto includes a leased vehicle as long as the lease contract is continuous for how many months duration?
6 months
Supplementary payments:
bail bond
Pay up to $250
Supplementary payments:
loss of earnings
Pay up to $200
not provided for any insured who:Intentionally causes bodily injury or property damage
- Is responsible for causing bodily injury to an employee during the course of employment
- Owns or operates a vehicle while being used as a public or livery conveyance (share-the-expense car pool is not included in public or livery conveyance)
Part A Exclusions
not provided for the ownership, maintenance, or use of:-vehicles with fewer then 4 wheels
- vehicles used mainly for use off public roads (snowmobiles, ATV’s) unless used by an insured in a medical emergency, “trailers”, or non-owned golf carts
- 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 located inside a racing facility
Part A Exclusions
Combined single limit
a combined single limit policy has a maximum aggregate per accident, regardless of the type of loss (BI or PD)
“your covered auto” being driven outside the state in which it is principally garaged, Part A extends to provide coverage as required by the financial responsibility or compulsory insurance laws of that state or Canadian province.
Out of state coverage
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
Part A- Other insurance
Each of the following is a Part A - Liability Coverage Supplementary payment, except:
a. payment for all defense costs
b. $200 a day for loss of earning due to an insurer request to assist in the trial
c. $250 for the cost of a bail bond
d. premiums on appeal bonds
a. payment for all defense costs is part of the Part A - Liability Coverage Insuring Agreement, which also includes payment for BI or PD for which the insured is legally responsible
A _____ vehicle is a covered vehicle when Your Covered Auto is being repaired due to a covered loss
a. substitute
b. replacement
c. temporary substitute
d. conditional
c. a temporary substitute is also covered if the vehicle is out of normal use due to breakdown, servicing, loss, or destruction
- pay reasonable expenses incurred for medical and funeral services caused by an accident, sustained by an insured, and incurred within 3 years of the accident
- Medical payments coverage does NOT require an insured to be legally responsible for causing injuries.
- Defines insured in Part B as: named insured or any family member occupying any auto or as a pedestrian when struck by a motor vehicle
Part B insuring agreement
- fewer than 4 wheels
- occupying a vehicle being used as public or livery conveyance
- occupying a vehicle that is located for use as a residence or premises
- sustains BI in the course of employment and Worker’s Compensation benefits are either required or available
Part B exclusions
limit of liability shown in the Declarations is the maximum the insurer will pay for each person injured in any one accident
Part B- Limits of Liability
will pay only the proportion that its limit of liability bears to the total of all applicable limits
Part B- Other insurer
A medical payments claim will be paid by the insurer within how many months from the date of the occurrence?
a. 18
b. 24
c. 36
d. 60
c. medical payments claim will be paid within 3 years for reasonable expenses for medical and funeral expenses regardless of fault
- doesn’t have insurance
- bodily injury liability limits are less than those required
- hit and run vehicle
- has insurance but the insurer either denies the claim or becomes insolvent
Part C- Uninsured Motorists Coverage definition:
- operated by someone who is self-insured
- owned by any government agency
- operates on rails or crawler treads
- mainly for use off public roads
- permanently located for use as a residence
Vehicles NOT included in definition of “uninsured motor vehicle”
- vehicle owned by the named insured or a family member and the vehicle is not insured by this policy
- an Uninsured Motorists Bodily Injury Liability
- insured occupying a “your covered auto” while it is being used as a public or livery conveyance
- an insured is using a vehicle without a reasonable belief that he or she is entitled to drive it
Part C exclusions
limit of liability shown in dec is the max the insurer will pay in any one accident
Part C limit of liability
Arbitration
each party may select an arbitrator (at each party’s expense) who then jointly select a third arbitrator (with expenses split equally be each party). A decision agreed upon by the arbitrators will be binding as to the insured’s entitlement to, and the amount of, damages.
Underinsured Motorists Coverage (UIM)
coverage limits are inadequate or insufficient to respond to claims
Which of the following is covered under Part C - Uninsured Motorist Coverage?
a. punitive damages awarded for the insured
b. accident was caused by a hit-and-run driver
c. the insured is also covered by Workers’ Compensation
d. a family member is struck by an insured vehicle
b. a hit-and-run vehicle can’t be identified and is therefore covered under Part C
An uninsured motor vehicle is any of the following, except:
a. a company car
b. a vehicle that does not have insurance
c. a vehicle insured by an insolvent insurance company
d. a vehicle with liability limits less than the state requirement
a. besides a company car, a vehicle owned by the insured or a family member or a vehicle furnished or available for the regular use of the named insured or a family member is not considered an uninsured vehicle
Transportation expenses
- a max of $20 per day, up to $600
- during the period beginning 48 hours after the theft, and ending when the auto is returned to use or the insurer pays for the loss
- public or livery conveyance
- wear and tear
- war or nuclear hazard
- electronic equipment, unless it’s permanently installed
- total loss due to destruction or confiscation or non-owned auto by government or civil authorities
- a trailer, camper, or motor home
- custom furnishings and equipment
- located at racing facility
Part D exclusions
- ACV of the vehicle
- max limit of $1,500 for a non-owned trailer and $1,000 for certain electronic equipment
Part D limit of liability
insurer has the option of keeping the stolen property (at agreed or appraised value) or returning it to the named insured. If the insured returns the stolen property, it must pay for any damage that resulted from the theft
Part D payment of loss
-if stolen property is recovered
Part D No Benefit to Bailee
if a bailment relationship exists with respect to the covered vehicle, the policy will not make payment for the benefit of anyone who had care, custody, or control of the covered auto
- this policy only pays its proportionate share of the loss
- this policy will pay on excess basis. primary coverage is considered insurance provided by the vehicle’s owner, any other property coverage that may be in place, and any other source of recovery, such as the insurance purchased by the driver of the vehicle
Part D other sources of recovery
Comprehensive covers all of the following losses, except:
a. falling objects
b. theft
c. contact with a deer
d. rollover
d. rollover and hitting another vehicle or object are covered by collision coverage
The insurer’s limit of liability for a vehicle damaged by a loss under Part D is which of the following?
a. actual cash value
b. replacement value
c. the lesser of actual cash value and replacement value
d. the greater of actual cash value and replacement value
c. the insurer’s limit of liability for loss is the lesser of the ACV or the vehicle and the amount necessary to repair or replace the vehicle with another of the like kind and quality
- cooperate with the investigation and settlement of any claim
- promptly send to the insurer any copies of notices or legal papers received
Part E duties after an accident or loss
Which of the following is not a duty of the insured if the insured’s vehicle is damaged when it hit a tree?
a. submit a proof of loss
b. call the police
c. promptly notify the insurance company
d. submit to a physical exam
b. calling the police is only a duty when seeking uninsured motorist coverage
Part F- General Provisions
BANKRUPTCY
bankruptcy or insolvency of an insured does not relieve the insurer of its obligations under the policy. if the insured declares bankruptcy, the insurer must still comply with all obligations of the policy
Part F- General Provisions
CHANGES
no changes may be made unless they are contained in a written endorsement issued by the insurance company.
Part F- General Provisions
FRAUD
No coverage is provided for any insured who commits fraud
Part F- General Provisions
Legal action against the insurer
no legal action may be taken against the insurance company by anyone unless he/she has complied fully with the policy
Part F- General Provisions
Right to Recover Payment
if the insurance company makes a claim payment, the person on behalf of whom payment was made must assign its rights to recover damages from another party to the insurance company
Part F- General Provisions
Policy period and territory
the policy only provides coverage for accidents and losses that occur during the policy period and within the policy territory
Cancellation:
during the first 60 days of a new policy
- insurer may cancel the policy for any reason by mailing notice to the named insured shown on the declarations
- Notice of at least 10 days is required for canc due to non-payments of premium, and at least 20 days advance written notice for all other reasons
Cancellation:
after the policy has been in effect for 60 days the insurer may cancel for only the following reasons:
- non payment of premium
- policy was obtained through fraud or material misrepresentation
- suspension or revocation of the driver’s license of the named insured, any driver who is a household resident of the named insured, any driver who regularly uses a Your Covered Auto
Non-renewal
The insurer may elect to non-renew a policy; if non-renewing the policy, the insurer must give the insured written notice before the end of the policy period. At least 20 days advance written notice
Automatic Termination
if insured or legal representative fails to accept or pay for a renewal
Other termination provisions
- proof of mailing of any notice constitutes sufficient proof of notice
- if policy is cancelled, the insured may be entitled to a premium refund
- effective date of cancellation stated in the notice will become the end of the policy period
Transfer of Your Interest in This Policy
named insured may not transfer or assign his/her interest in the policy without the insurer’s written consent
Two or More Auto Policies
if two or more policies issued by the same insurer apply to the same accident, the max limit of liability that will be paid will not exceed the policy with the highest limit
If an insurer non-renews an insured’s policy for underwriting reason, what is the minimum number of days’ notice to the insured?
at least 20 days notice is required
After an automobile policy has been in effect for 60 days, the insurer may cancel the policy for any of the following reasons, except:
a. non-payment of premium
b. material misrepresentation of information on the application by the insured
c. submission of four or more claims during a single policy period
d. suspension of the driver’s license of the named insured’s or household resident
c. claims history is generally a valid reason for non-renewing a policy, not cancelling the policy mid-policy term
Extended non-owned coverage for a named individual
- provides coverage by removing or altering some of the Personal Auto Policy’s exclusions or limitations
- covers non-owned autos furnished or available for the insured’s regular use
- excess liability coverage
- an extra premium charge applies for liability and medical payments purchased by this endorsement
Miscellaneous Type Vehicle Endorsement
motor home motorcycle similar type vehicle ATV dune buggy golf cart
Named non-owner coverage for a named individual
liability, medical payments, and uninsured motorists coverage for individuals who do not own vehicles, but often borrow or rent autos
Excess electronic equipment coverage
Coverage increases the policy limit from $1,000 to the amount shown on the endorsement.
Includes $200
Limited Mexico Coverage
within 25 miles of border
10 or fewer days duration
Optional limits transportation expenses coverage
$20 per day, $600 maximum
Joint ownership coverage endorsement
- 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. This includes a ward or foster child
What is the purpose of the Extended Non-Owned Coverage for a Named Individual endorsement?
a. coverage is extended 25 miles into Mexico
b. covers non-owned vehicles furnished for the insured’s regular use
c. covers an individual who does not own a car
d. extends coverage for a leased vehicle
b. this endorsement provides excess coverage over the primary coverage insuring the non-owned vehicle
listed in the Dec, and includes the spouse if a resident of the same household
named insured
person related to the named insured by blood, marriage, or adoption, including a ward or foster child who is a resident of the household
family member
non-owned vehicle used in place of an insured vehicle that is out of normal use due to breakdown, repair, servicing, loss, or destruction
temporary substitute vehicle
include BI or PD 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 a 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
Part A Exclusions
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
Part A Liability
