CHAPTER 7 PART 1 Flashcards
Covered Auto
any vehicle in the declarations, a newly acquired auto, or attached trailer
Newly acquired auto
=new to you
>new vehicles acquired by the insured during the policy period
>when it replaces an old vehicle through an endorsement, coverage is provided instantly
>is entitled to the broadest coverage available on the policy (except collision)
Gross vehicle weight
has a maximum limit of 10,000lbs
-including vehicle, fuel & fluids, passengers, & cargo
Family member
a person related by blood, marriage, or adoption who is a resident of the household
owned autos
personal vehicles owned by the insured
non-owned auto
vehicles with no ties in ownership to the insured
temporary substitute vehicle
rental vehicles while the insured’s primary is out of use
Financial Responsibility Law
> CA law requires anyone that drives a vehicle MUST have financial responsibility at all times
drivers must carry proof whenever they drive a car & upon request
Acceptable ways to show proof of financial responsibility in CA are:
> purchasing liability insurance
deposit $35,000 with dmv
purchasing a surety bond for $35,000 obtained from a company licensed in CA
a DMV self insured certificate
private passenger auto must meet these for personal auto policy
> must be used for personal use only
owned by an individual/married couple
includes RV’s & 6 wheeled RV’s
ppa qualify for a pap
Do commercial vehicles qualify for a pap?
No
>are used for business
>are owned by a commercial company
VEHICLE eligibility for a pap
> any vehicle listed on the declarations page
new vehicles
newly acquired vehicles
temporary substitute vehicles
> driving safety record
miles driven annually
years driving experience
are principle rating factors in determining an insured’s premium
What is liability?
> is an insurance coverage that is meant to pay out for losses that occurred due to negligence of the insured
will pay for BI &PD due to an accident for which the insured is legally responsible
Liability features (4 feat.) >features=includes >SOS/E
- supplementary payments
- out of state coverage
- split limit vs. combined single limit
- exclusions
Supplementary payments`
> bail bonds up to $250
appeal bonds in full for a claim that is covered
interest in judgment
other reasonable expenses, including loss of earning up to $200 a day for loss of earnings due to assissting any legal proceedings
Split limit
> is the most commonly used form of a policy coverage
its is Per Person/Per Occurrence where an insurance company will cover a specific amount for BI for 1 person & another amount for the whole accident itself also separating the amount paid out to any PD
PER PERSON/PER OCCURRENCE/PD
payout amounts are itemized
Combined single limit
> is one whole dollar amount
>is one amount that can be used in any form as long as it doesn’t exceed the coverage amount
Out of State Coverage
> you’re automatically covered in any state in the US, its territories, & Canada
automatically adjusts itself to the minimum liability limits of that state at no extra cost to the insured
will not adjust itself to a lower limit
Mexico is not included
Liability will automatically exclude the following:
> intentional damages/injury
damages to personal belongings
injury that happens at work
when using the vehicle for livery conveyance
any damages that were caused by: selling, servicing, repairing, parking or storing vehicles
any commercial vehicle
theft, or use without permission
any that is insured under a nuclear energy policy
any vehicle with less that 4 wheels
any vehicle that the insured/family member uses on a daily basis that is not covered on a policy
any vehicle located inside a racing facility for the purpose of racing
Medical Payments
> pays for necessary medical & funeral costs (up to specified limit) because of an accident
payout is EXTRA
it can cover if the insured is occupying a vehicle or struck by one as a pedestrian, regardless of fault
one dollar amount PER person in the vehicle
coverage can last up to 3yrs
this is in addition to liability
Who is covered under Medical Payments?
> the insured, passengers, or any family member while occupying a vehicle or trailer
the insured or family member hit as a pedestrian by a vehicle
Exclusions to medical payments, if the INSURED is using/STRUCK BY:
>a car with less than 4 wheels >used as a public livery >using it as a premises >commercial vehicle >if workers comp is available
Exclusions to medical payments, if any, LOSSES caused by:
>Fallout LV
>nuclear weapon >war/rebellion/revolution >nuclear reaction >radiation >radio active contamination
Uninsured Motorist coverage
> covers in case the named insured is involved in an accident in which they were NOT at fault, & the other person does NOT have insurance
limits are typically 15/30/3,5
Under insured coverage
> covers in case the named insured is involved in an accident where the other person is at fault but has insufficient insurance
the amount listed as your under insurance limit is the TOTAL amount paid by BOTH insurance companies
4 categories of uninsured motorist
>huui
- there is no liability or form of financial responsibility for the vehicle (uninsured)
- hit & run accidents
- The liability does not meet the state minimum for liability (under insured)
- the insurance company does not cover or becomes insolvent (insolvent)
>huui
Optional Endorsements (names) (meand)
>misc. type vehicle endorsement >named non owner >extended non owned coverage >damage to your auto >audio, visual, data & other equipment
Audio, visual, data & other media
> extends coverage under comprehensive/collision for electronic equipment
$200 limit for tapes, records, discs, & other media
covers add ons
Damage to your vehicle (fix)
(Custom. equip.)
>anything added to a car that isn’t stock
>w/o this coverage, insurer only pays for stock price (car’s worth w/o add ons)
Limited Mexico Coverage Endorsement
> coverage is valid within 25miles of the US/Mex border, with a max. of 10 days
must be filed in US by insured
Towing and Labor Coverage
> basic limit of $25 for towing & labor costs spent at the place a vehicle is disabled
WE WILL ONLY PAY FOR LABOR PERFORMED AT THE PLACE OF DISABLEMENT
Good Driver Discount
>20% >automatically applies >requirements: *has been licensed for 3yrs >cannot have any of the following *no more than 1 violation *has had more than 1 point dismissed in the past 3yrs *was at fault for an accident in which someone had BI or death
Extended non-owned
>EXTENDED=OTHER WAY OF DRIVING W/O OWNING
> more business related
county workers driving a government/business owned vehicle
vehicle driven regularly but driver is not on policy
tony with IID vehicles
Unendorsed policy
=LIABILITY ONLY
=no changes made to policy
Primary Coverage
follows the vehicle on a primary basis
newly acquired auto=
new to you
Owned auto=
your name is written somewhere on the paperwork
>co-owner/owner
non-owned auto
> insured’s name is nowhere on the paperwork-not the owner on paper
must include owner of vehicle on policy
prevents paying the wrong person
Surety bond
>S=$
> a way to show financial responsibility
the other party provides insurance
like money order/cashier’s check
Self-insured certificate
> a way to show financial responsibility
IOU
“i have so much money I can pay for the damages myself”
Consequences of not having proof of financial responsibility:
> can get a ticket
can car be impounded
license/registration can be suspended
PAP stands for
Personal Auto Policy=liability
Part A=
liAbility
Part B=
medical payments
Part C=
=uninsured/under insured coverage
=covered regardless
>part C(coverage)
Part D=
Physical Damage
>collision
>Part D(damaged)
Liability: >Who >What >When >How
liability is the state minimum coverages
>who: covers the person I hit (the victim)
>What: bodily injury(BI) & property damage (PD)
>When: when i am at fault
>How: uses split limit
split limit &. combined limit
> it’s one or the other, not both
90% of companies do split limit
split: amounts are itemized
combine: one amount
Split Limit
> most common
money given out is itemized/not 1 sum
first 2 #’s are for BI & the last # is for PD
per person(1 person)/per occurrence(2 or more people)/PD
money is itemized
only gives what is needed, not full amount unless full amount is met/exceeded, anything else is insured’s responsibility
Combined limit
> one $ amount for total damages
>amount is not itemized
Out of State coverage
> every state has different laws/minimum requirements
for CA it’s: 15/30/5
limits will automatically adjust to meet other state’s requirements @ no cost to insured
limits can go up, not down
Medical Payments >Who >What >When >How
>Who: yourself/passengers/family members >What: medial &/or funeral expenses >When: an accident, regardless of fault >How: one $ amount per person *PAID AS EXTRA/ON TOP OF LIABILITY*
Medical payments amount ____ regulated by the state
_is not__
>varies by company
>pay on top of other payments
Uninsured >Who >What >When >How
is an optional add-on insurer will pay their insured's damages >Who: me, my passengers, & vehicles >What: BI & PD >When: someone hits me & doesn't have insurance & are at fault >How: split limit 15/30/3,5
Under insured
insured’s limits are lower that state requirements
Comprehensive(OTC) & Collision >Who >What >When >How (mean girls)
go together
>Who: me (car only)
>What: accidents
>When: “when i hit someone/someone hits me, regardless of fault”
also sand/hail/fire/theft/vandalism
>How: the limit does not exist (whatever the car is actually worth to fix/replace) you would just pay your first deductible & the company will then pay up to the car’s worth (ACV)
Collision
> due to negligence
YOU hitting something
upset (car flipping over)
=can control
comprehensive/OTC
> cannot control
>fire/sand/fire/theft/vandalism
CDW
> applies to (collision& OTC) & uninsured motorist MUST HAVE BOTH/are add ons
U.M + (COLL + COMP) = CDW
if you have both, you won’t have a PD limit
cancels COLL & COMP deductible
will only cover in an U.M accident
What do you need for CDW to apply?
> UM + (COLL + COMP)
>MUST HAVE the hitter’s driver’s license/VIN #/license plate #
Nonstandard Physical Coverage
> is the alternative to COLL & COMP
>will ONLY cover theft & fire
Good Driver Discount
> automatically applied
curtesy=not a recognized discount=not a fed discount
20%
can’t have suspended license/ points on license
notification of loss
> proof of loss
>usually through police reports
Extended non-owned
>EXTENDED=OTHER WAY OF DRIVING W/O OWNING
> for employees driving company cars
>tony driving IID cars
Damage to YOUR auto
> custom equipment
aftermarket products
without this coverage, payout is stock value
Towing & labor
> covers up to $25/up to an hour of work done on the spot
>car cannot be moved, have to stay where car broke down
Primary policy
=primero
>1st
>will cover first
>this coverage follows the vehicle
Excess policy
=extra
>will cover excess costs that primary won’t finish cover
>applies when primary coverage is not enough
Gap Coverage (beast)
> pays for the difference between the amount you owe on the vehicle & the amount the car is worth (Actual Cash Value)
covers the depreciation of a car
is insurance for the LOAN on the car
when beast was totaled & gap paid hector’s loan difference
What is CAARP?
California Automobile Assigned Risk Plan >INSURANCE FOR THE UNINSURABLE (high risk drivers no one else wants) >liability limits of 15/30/5 >can only offer liability/medical/uninsured motorist
who can sell CAARP?
> only certified agents can sell CAARP
>sold through EEDP/over the phone
What is CAIP?
> commercial version of CAARP
>sold through EEDP
Low Cost Automobile Insurance
> program for low income but good drivers
drivers must meet certain criteria to qualify
very exclusive program
25% surcharge if the person named on the policy is an unmarried male between 19-24yrs old
paid for by the state, not tax dollars
covers liability/uninsured motorist/medical payments
policies are renewed annually
An insurer can choose to cancel a policy for the following reasons:
> no payment made
driver’s license/registration has been suspended/revoked
attempting to place a fraudulent claim
Or if any representations were made
*related to DMY
*lying about previous insurance claims
*any factors that would have made insured an aversion selection
*a substantial increase in the hazards insured against
Duties after a loss
> prompt notification of loss
cooperating w/ the insurer
forwarding any legal papers received
submitting to a physical exam or to examination under oath when requested
allowing the insurer access to medical records
submitting a proof of loss
notifying a police of a hit/run accident or theft
PROTECTING THE PROPERTY FROM FURTHER LOSS
allowing the insurer to inspect & appraise the damaged property
Endorsements
are any changes that are made to a contract from its original form whether it be adding or taking away.
Optional endorsements
>misc. type vehicle endorsement >named non owner >extended non owned coverage >damage to your auto >audio, visual, data, & other media >limited Mexico coverage >towing & labor coverage
Miscellaneous type vehicle
> allows you to ensure types of vehicles that are NOT normally eligible for PAP
motorcycles/motor homes/golf carts/etc
basic policies MUST have this feature added in order to insure them
Named Non Owner
> provides coverage for individuals who do not have a car, but borrow/rent cars as needed
liability/medical payments/uninsured motorist can apply for personal use only
Extended Non owned coverage
> increases the liability & medical payment limits
>NOW the insured can drive personal/business/commercial
under an UNENDORSED policy
> NO changes have been made to policy
>coverage is as original
under an endorsed policy
> changes have been made
>coverages have been added/extended
