Coverage Flashcards
Application - Drivers
Covered under policy
Specifically excluded under the policy
Affiliations (Affinity for Discounts and Surcharges)
Accidents
Violations
Non-chargeable Incidents
Application - Vehicles
Year
Make
Model
Usage (business, personal, racing, hauling, etc.)
VIN
Garaging Address
Alterations to vehicle
Application - Producers Statement
All information to questions is applicant’s responses
All information in the application is true, correct and complete
Application - Statement/Signature
Information in app true/Consequences of misinformation
Duty to notify company if facts change
Warning of giving fraudulent info
Application - Financial
Terms of policy (period)
Premiums
Payment Options
Application - Coverages
Types
Limits
Deductibles
Policy Jacket - Definitions
To eliminate any ambiguity in the policy, certain words denoted in bold are given specific meaning.
Policy Jacket - Insuring Agreement
Promise made by the insurance company for coverage under the policy. The insuring agreement may be modified by definitions, exclusions, and conditions that appear in the policy. It’s where the applicable coverage is given.
Policy Jacket - Exclusions
Language in the policy which takes away or limits coverage that may have been provided in the insuring agreement.
Policy Jacket - Gen Conditions/Provisions
Describes the duties and rights of the insured and the insurer in the contract.
Supplementary Payment - Policy
coverages that are paid in addition to the limit of liability.
Limit of Liability - Policy
maximum amount the policy will pay for bodily injury and property damage.
Bankruptcy
insurance company is not relieved of the terms of the policy contract if the insured files bankruptcy
Our right to recover payment
company’s right to collect damages paid to the insured that resulted from and are owed by an at-fault third party
Part A
Liability (coverage for 3rd party)
Part B
Medical Payment
Part C
Uninsured
Part D
Damage to Auto
Part E
Duties after Accident
Part F
General Provisions
Representation
information provided by the insured
Insolvent
company goes bankrupt
Self Insured
personal money to insure themselves
Arbitration
Mainly a liability dispute
Companies disagree about who is at fault
Diminution
value of vehicle decreases due to accident (claimants only)
Mitigate damage
try to prevent further damages
Such as cover broken window with trashbag
First Hurdle
coverage
Our Goal
LOOK FOR COVERAGE
The LAW requires
Good Faith and Fair
Reservation of Rights (ROR)
To the INSURED and ANYONE SEEKING INSURED (driving the car)
May NOT be coverage
ANYTHING misrepresented
Ex somebody driving a car without notifying insurance company
advise the insured of the existence of the coverage ISSUE in detail
including the specific language from the policy that has created the issue of coverage
Waiver (followed by estoppel)
intentional or voluntary relinquishment of a known right
For example, if the claim representative were to inadvertently tell the insured he can go ahead and have the vehicle repaired, the company could no longer demand the carrier has the opportunity to inspect the vehicle prior to the repairs.
Estoppel (can’t have this without waiver 1st)
the legal result of a waiver or of the conduct which implies a waiver.
It prevents the party from asserting the original right
- A person intentionally or unintentionally creates the impression that a fact exists.
- The innocent party relies on that impression.
- The innocent party is harmed by that same reliance.
First Question to Ask?
Is the policy in force
Policy Verification
Is the policy in force?
Is the date of loss within the effective and expiration dates of the policy?
Is the vehicle involved in the accident or loss listed on the policy?
Is the person driving the insured vehicle at the time of the accident listed on the policy as a listed driver and not an excluded driver?
Misrepresentation
when there is an omission, concealment or an incorrect/fraudulent statement
Policy Out of Force
policy not active
Material Misrepresentation – MMR
Examples
Providing incorrect garaging location of the vehicles when requested.
Providing incorrect indicated use of the insured vehicle (business vs. personal use) when requested.
Failure to report accidents and violations as requested on the application.
Uber
Material Misrepresentation – MMR Effect on Policy
Would this have caused a change in the policy
ULHHM
Unlisted household members
TLNP (connected to policy out of force)
take loss no policy
Material Misrepresentation – MMR Requirements
Is there a written and signed application or a recording of a verbal application that we can produce?
Did the insured state that the facts in question were told to the agent? If yes, does the agent state the same?
If the agent knew about the facts and did not disclose it on the application, no MMR exists.
Material to Risk
In this situation, the unlisted driver would not have to be involved in the accident to pursue MMR.
If there was an accident and the insured confesses to allowing someone else drive their car
Material to Loss
MMR is material to the loss when the misrepresented fact specifically impacts the particular claim.
That is, the unlisted driver would have to be involved in the accident to proceed with the MMR.
If there was an accident and the other person was driving the car
Rescind/Void Policy (MMR has occurred)
The policy is voided to inception and all premiums are fully and timely returned to the insured. The impact of this is that the policy never existed.
Reformation (MMR has occurred)
The liability limits only are changed to provide the minimum financial responsibility limits and first-party coverages are voided back to the policy inception, as if they never occurred.
Denial of the Claim (MMR has occurred)
Even when a rescission or reformation may not occur, the policy language may still support the denial of coverage for the particular claim.
Cancellation (MMR has occurred)
Every state provides for cancellation in the future (prospective cancellation) for specific reasons, including fraud or misrepresentation in the presentation of the claim.
MMR Steps
Statements
Signed Application
Review policy
Underwriting re-rate
Underwriting response
Notify manager
MMR summary
ROR Mailing Specifics
Certified
ALL known addresses
ASA practical P
Policy and Application language
ROR if Coverage is Found
Send rescission letter
Coverage Denial Letter Considerations
Everything included in a ROR
Must be sent to all potential insureds
Must contain the facts of the loss
Must contain the policy provisions that supports the denial
Must contain the investigative facts that support the policy provisions
Asks for additional information that the insured may have that could impact our decision
Advise the insured what to do if suit is filed by third party claimants (if applicable)
Coverage Denial Letter Authority (insured or claimant)
The claim representative should secure authority from their manager prior to any coverage denial.
If the claim is one that triggers a Large Loss Notification, the claims attorney must be involved in the coverage denial.
Excess Letters (we have coverage but…)
Damages in loss may exceed limits of policy
Policy and Claim Number
Date of Loss
Insured
Bodily injury and/or property damage limits of liability
The fact that the exposure could exceed the policy limits
The amount of any demands and offers
Advising the insured that he will have responsibility for any judgment or award in excess of policy limits
Right to retain counsel, at his own choosing and cost, to represent any uninsured interests
2 Duties
Indemnify and Defend
Policy out of Force
policy page
police report
cancellations (exact)
contact agent
contact insured
time of accident (exact)
