Chapter 6 - Personal Auto Policy (PIP) Flashcards
The _____ ______ is listed in the Declarations, and includes the _______ if a resident of the same household.
Named Insured, Spouse
Which one is considered a family member?
A. Friend residing in residence
B. Boyfriend/Girlfriend
C. Family Friend
D. Foster Child
D. Foster Child
***A family member is a person related to the named insured by blood, marriage, or adoption, including a ward or foster child who is a resident of the household.
What is a temporary substitute vehicle?
It 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.
What Supplementary Payments is covered under Part A -Liability Coverage? Check all that apply. A. Loss of Earnings B. Bail Bonds C. Emotional Distress D. Post-Judgement Interest
A, B & D are all covered under Part A.
***As well as appeal bonds, and reasonable expenses while assisting the insurer in the defense of a claim.👨⚖️
In what circumstances does Part A - Liability Coverage not apply? A. Sedan B. Lifted Truck C. Motorcycle D. Station wagon
C. Motorcycle🏍️
***Part A does not apply to vehicles with less than 2 wheels, there are separate policies for that.
The maximum limit paid under Part A is listed where?
It is shown on the policy’s declarations
True or False.
If a loss is covered under more than one part of the policy, payment can be duplicated or stacked.
False🤥
***duh
If a vehicle covered by Part A is driven out of state, how does coverage change?
When a vehicle is driven out of state liability coverage extends to meet the laws required in that state (or Canadian province).
Who will pay out a claim if other insurance is also in place at the time of an accident?
If there is more than 1 insurer the claim will be paid out based on what each insurer’s fair share would be.
If an accident by the insured results in another person’s death, will insurance pay for their funeral?
Yes, Insurance will pay for necessary funeral services caused by the accident within 3 years.
**It will also pay for necessary medical services
Will the insurer still pay medical bills of others even if it wasn’t the insureds fault?
Yes, medical payments are made regardless of fault.
An insured was racing and caused an accident resulting in injuries to the other party. Will the insurer make payments for medical bills to the injured party?
No, racing is an exclusion under Part B.
🚫🏁🏎️
What is Part C coverage for?
Part C - Uninsured Motorists Coverage
If an at-fault driver damaged the insureds vehicle but their insurance limits are inadequate, what coverage would help the insured?
Underinsured Motorist Coverage (UIM) 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.
What damages would be covered under Part D?
A. Hail
B. Rear Ended Accident
C. Slashed Tires
A, B & C - All would be covered!
***This coverage pays for direct and accidental coverage, regardless of fault.
Define “Collision”
Collision is the upset of the covered vehicle or a non-owned auto or its impact with another vehicle or object.
🚖🚗
Other Than Collision coverage is….
✨Comprehensive ✨
Other Than Collision (OTC, Comprehensive) provides what type of peril coverage?
Open peril coverage, only doesn’t apply to excluded perils.
Bodily Injury (BI) and Property Damage (PD) Liability is covered under which letter?
a. Coverage A
b. Coverage B
c. Coverage C
d. Coverage D
a. Coverage A
What is the maximum Gross Vehicle Weight (GVW) for a (PAP) Personal Auto Policy?
a. 5,000 lbs
b. 10,000 lbs
c. 15,000 lbs
d. 25,000 lbs
b. 10,000 lbs
Define Other Than Collision (OTC, Comprehensive)
Other Than Collision (OTC, Comprehensive) provides open perils coverage for loss caused by any peril that is not excluded in the policy.
What does Transportation Expenses pay for? & how much does it pay?
Transportation expenses 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.
If an insured’s vehicle is stolen when does the payment of transportation expenses by the insurer begin and end?
It begins 48 hours after the theft and ends when the auto is returned or the insurer has paid the loss.
When total theft of the covered auto or non-owned auto occurs when does payment after the loss occur? (for covered perils)
24 hours after loss.
Most Common Part D Exclusions
Vehicle being used as a Public Livery or Conveyance, wear and tear damage, 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.
Other Part D Exclusions
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.
Part D Limit of Liability for loss is paid on the _______ of the vehicle.
ACV - or cost necessary to repair or replace like another of like kind and quality.
What is Part E?
Duties After an Accident or Loss
***Include prompt notification of any claims and legal papers received; cooperation in the claims investigation and settlement; submission to a physical exam; authorization for the insurer to obtain copies of medical reports and records; submission of a requested proof of loss; notification to the police if a hit-and-run driver is involved; and protection of property from further damage.
Part F – General Provisions
include bankruptcy or insolvency of an insured; changes to the policy; fraud; legal action against the insurer; right to recover payment; policy period and territory; policy termination provisions; transfer of the insured’s interest in the policy; and accident payments involving two or more insured auto policies.
Selected endorsements for the personal auto policy include:
Selected endorsements 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.
A vehicle designed to be pulled by a private passenger auto or a pickup or van. Also includes a farm wagon or farm implement while it’s being towed by a private passenger auto pickup, or van.
Trailer
Temporary Substitute
Any auto or trailer that is non-owned while being used in place of an insured vehicle which not available because of breakdown, repair, servicing, loss, or destruction
The limit of liability is the most paid by the insurer regardless of all of the following, except:
A. Number of vehicles involved
B. Premiums shown
C. Amount of surcharges to be applied to policy
D. Number of insureds
C. Amount of surcharges to be applied to policy
***The amount of surcharge to be applied to the policy is not linked to the limit of liability.
The limit of liability is the most paid by the insurer regardless of all of the following, except:
A. Number of vehicles involved
B. Premiums shown
C. Amount of surcharges to be applied to policy
D. Number of insureds
C. Amount of surcharges to be applied to policy
***The amount of surcharge to be applied to the policy is not linked to the limit of liability.
Part D is also known as what?
Physical Damage Coverage
What losses are covered under OTC? Select all that apply.
a. Windstorm
b. Fire
c. Falling Object
d. Wreck
e. Theft
A, B, C & E are all covered.
D is not because it would be covered under collision.
***OTC (other than collision) is comprehensive
Comprehensive covers all of the following losses, except:
A. Contact with a deer
B. Falling objects
C. Rollover
D. Theft
C. Rollover
***Rollover and hitting another vehicle or object are covered by collision coverage.
Non-owned
Any private passenger auto, pickup, van, or trailer not owned by, furnished, 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.
Any auto or trailer being used as a temporary substitute for the covered auto, while the covered auto is out of normal use due to:
- Breakdown
- Repair
- Servicing
- Loss
- Destruction
Transportation Expense coverage begins __ hours after a theft and __ hours after a covered loss.
a. 24 & 48
b. 24 & 36
b. 48 &36
d. 48 & 24
d. 48 & 24
There is a maximum limit of $_____for a non-owned trailer and $_____ for certain electronic equipment.
$1,500 & $1,000
Losses covered under Part D are paid on a __________ basis,
a. Replacement
b. Actual Cash Value
c. Functional Replacement
d. The lesser of actual cash value and replacement value
d. The lesser of actual cash value and replacement value
***The insurer’s limit of liability for loss is the lesser of the actual cash value (ACV) of the vehicle and the amount necessary to repair or replace the vehicle with another of like kind and quality.
No Benefit to Bailee
✨EXAMPLE✨
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. For example, if the insured’s vehicle was in the repair shop for servicing and the mechanic damaged the vehicle, this policy wouldn’t make payment; the repair shop’s insurance would have to pay because of its legal liability as a bailee.
If other insurance is in place, or if another party is available to make payment for a covered loss, this policy only pays its ____________share of the loss (as we’ve seen in the other coverage parts)
proportionate
What are the 6 duties required of an insured following a loss?
✨Notify the insurer promptly about how, when, and where the accident or loss occurred (also, names, addresses, witnesses, etc.)
✨Cooperate with the investigation and settlement of any claim.
✨Promptly send to the insurer any copies of notices or legal papers received.
✨Submit to a physical exam as reasonably required by the insurer.
✨Authorize the insurer to obtain copies of medical reports and other pertinent records.
✨Submit a proof of loss when required by the insurer.
