Module 7: Automobile Insurance

Question 1

Named Driver Exclusion Case

Answer 1

St. Paul Fire & Marine Ins. Co. v. Smith

Question 2

4 Kinds of Automobile Coverage

Answer 2

1. Liability
2. Property Damage
3. Uninsured Motorists
4. Medical Payments

Question 3

What is the issue in the Carriers Insurance v. American Policyholders’ Insurance Co. Case?

a) Which policy is “primary” for purposes of resolving the dispute?
b) Did Cummings have permission to operate the vehicle at the time of the accident?
c) Does the named driver exclusion violate public policy?

Answer 3

a) Which policy is “primary” for purposes of resolving the dispute?

Question 4

True or False? In the St. Paul Fire & Marine Ins. Co. v. Smith case, the court concludes that the named driver exclusion does violate Illinois state public policy.

Answer 4

False. The court notes that the goal of the exclusion is to enable households who have a family member with a poor driving record to obtain insurance at a reasonable cost by excluding the poor driver.

Question 5

This type of auto insurance coverage covers against damage to insured vehicle caused by 1) the upset of the vehicle or 2) by its impact with another vehicle or object

Answer 5

Collision Coverage

Question 6

What 3 things are excluded from Collision coverage?

Answer 6

Collision excludes:

1. Fire
2. Windstorm
3. Theft

Question 7

Collision coverage and comprehensive coverage are:

A) First Party Coverage
B) Third Party Coverage

Answer 7

A) First Party Coverage

Question 8

True or False? Collision coverage typically insures against loss resulting from fire, theft, and windstorm.

Answer 8

False. Collision excludes fire, theft and windstorm. It only covers against damage to insured vehicle caused by the upset of the vehicle or by its impact with another vehicle or object.

Question 9

True or False? In the Taft v. Cerwonka case, the court concludes that the plaintiffs/parents are not permitted to “stack” the uninsured motorist coverage for each of the two cars insured by Allstate.

Answer 9

False. The court reviews stacking cases from other jurisdictions and concludes that in this case and those that are factually similar, stacking IS permitted where the plaintiffs have paid two separate premiums–one for each vehicle insured with Allstate.