Exam 2 Part C Flashcards
1
Q
Automobile Loss Exposures
A
- Liability for:
1. Negligent causing bodily injury (BI) or property
2. Defense Costs - Economic loss for bodily injury
- Pain and suffering
- Collision damage to your vehicle
- Other damage to and theft of your vehicle
2
Q
Part A
A
- Compulsory
- Liability for BI and PD to others
- Policy limits
- 25 for BI per person, 50 BI limit per accident, 10 per accident for property damage
3
Q
Compulsory Insurance Laws
A
- Requires drivers to buy a minimum of Part A coverage
4
Q
Part A
A
- Policy in question covers a particular auto and a particular driver
- Auto listed in declaration of policy
- Used by named insured
- Used by family members of the named insured
- Used by anyone with permission
- Covered person
5
Q
Part A Covered Person
A
- Named insured
- Using the covered auto
- Using a rental car
- Using a borrowed car
6
Q
Part B Without No Fault
A
- Known as medical payments section
- Optional
Covers medical expenses as the result of any auto accident or while a pedistrian
7
Q
Part B With No Fault
A
- Known as Personal Injury Protection (PIP)
- Required to purchase a minimum amount
- Medical Expenses and loss of income
- Named insured
- Family members
- Passengers in car
8
Q
Part C Uninsured Driver
A
- Driver who has not Part A (liability coverage)
- Hit and Run Driver
- Stolen car
- Insurance from an insolvent insurer: Fake Insurance
9
Q
Part C Underinsured Motorist Coverage
A
- Other driver has low liability
- Some states require
10
Q
Part D Collision
A
- Perils Covered, example named
- Provides coverage for losses due to specific reasons
- If loss is caused by reasons other than the named peril, then the loss is not covered
- Covers losses to your auto due to collision
11
Q
Part D Comprehensive
A
- An example of all risk coverage
- Provides average for losses due to any reason except certain causes of loss
- Much broader form of coverage
- Excludes collision, covers anything else
- Much broader form of coverage
- Excludes collision, covers anything else
- Bombs, theft, accident, broken windows
- Part D is not required in any state
12
Q
Uninsured Drivers
A
- Financial responsibility issue
- Want other drivers to be responsible for their actions
13
Q
Solutions for Uninsured Drivers
A
- Financial Responsibility Laws: Insurance for a licensee
- Unsatisfied Judgement Fund
- Uninsured Motorist Coverage
14
Q
Problems With Tort System (Auto)
A
- Some people are never compensated:
1. Uninsured driver is at fault
2. No one is negligent - Strange Settlements:
1. Tort Recovery and Economic Loss
2. Tort Recovery as percentage of economic loss
15
Q
Strange Settlements
A
- Ratio is greater than 1 for low levels of economic loss
- Ratio is less than 1 for high levels of economic losses
- Low levels of economic loss tend to be overcompensated
- Insurers pay drivers something to get rid of them (more is received for pain and suffering
- High levels of economic loss tend to be under-compensated
- Policy limits run out
- Settle for policy limits
