Personal Auto

Question 1

Florida Financial Responsibility Law

Answer 1

The law requires an operator of a motor vehicle involved in an accident (one involving bodily injury or property damage rendering a vehicle inoperable) OR convicted of certain traffic offenses to respond for such damages and show proof of financial ability to respond for damages in future accidents.

Question 2

Persons found guilty of driving under the influence (DUI) must purchase limits for a minimum of three years of either:

Answer 2

1. 100/300/50 Liability Limits (or)
2. $350,000 post of a Bond

If the person has not been found guilty of a DUI or felony traffic offense during the three-year period, he or she is allowed to return to the standard coverage limits.

Question 3

The Financial Responsibility Law can be satisfied in one of three ways

Answer 3

1. 10/20/10 auto liability limits at the time of the occurrence
2. Being a qualified self-insurer for 10/20/10 limits
3. Posting a cash bond that guarantees responsibility to 10/20/10 limits

Question 4

If financial responsibility did not exist at the time of the accident, two things must happen to avoid penalties:

Answer 4

1. The legally valid claims of others must be satisfied (up to the 10/20/10 requirements).
2. The owner & operator must provide certification (SR-22) of financial responsibility for future accidents.

Question 5

SR-22

Answer 5

An ______ is a state form of “certification of financial responsibility” filed on behalf of an insured by his/her insurance company (using Form _____ ) certifying that coverage is in effect (certification must remain on file for three years).

NOTE: A Named Non-owner policy is taken out by an individual who must have certification of financial responsibility (an SR-22) who does not own an automobile.

Question 6

No-Fault

Answer 6

Those who are subject to and comply with the law are not subject to legal liability for causing bodily injuries to others, regardless of fault (subject to important exceptions, discussed below).

As one may not be able to seek legal liability damages against another for bodily injuries, the law substitutes, under one’s own insurance, a coverage named “Personal Injury Protection” (PIP). This coverage provides first-party benefits for economic loss, without regard to fault.

The law requires that PIP insurance be carried by the owners of motor vehicles and imposes penalties for failing to do so.

Question 7

Elements of the No-Fault Elements law

Answer 7

1. Immunity
2. First Party Coverage
3. Penalties

NOTE: The “first party” in an insurance contract/policy refers to the insured.

https://kemlawfirm.com/florida-no-fault-law/

Question 8

Immunity

Answer 8

Those that are subject to the law, and comply with the law, are immune from legal liability for causing bodily injuries to others

Question 9

First Party Coverage

Answer 9

The insurance coverage, Personal Injury Protection (PIP), is the ____ ____ _____ which affords coverage to those injured in automobile accidents without regard to fault.

NOTE: The “____ ____” in an insurance contract/policy refers to the insured.

Question 10

Penalties

Answer 10

The No-Fault law requires PIP coverage be carried by the owners of motor vehicles, and imposes _______ for failing to do so.

Question 11

the insured

Answer 11

PIP benfits follow

Question 12

the motor vehicle

Answer 12

Tort immunity follows

Question 13

Non-residents who are not required to register their vehicles in Florida ARE subject to the No-Fault law if they have a motor vehicle physically present in Florida for more than ___ of the preceding 365 days.

Answer 13

90

Question 14

No-Fault Penalties

Answer 14

Three penalties for non-compliance:

1. Personal liability for payment of PIP benefits to those entitled to receive such benefits.
2. No “immunity” from legal liabilities which are granted to those who do comply.
3. Suspension of driver’s license and vehicle registration

Question 15

The required limit for the package of PIP benefits is __________ per person per accident.

Answer 15

10000

Question 16

Medical Benefits

Answer 16

This PIP benefit pays for 80% of reasonable expenses for necessary medical expenses.

Question 17

Work Loss

Answer 17

This PIP benefit reimburses up to 60% of loss of gross income or earning capacity

Question 18

Replacement Services

Answer 18

This PIP benefit pays up to 100% of the cost for having household services performed.

Question 19

Death Benefit payable is up to

Answer 19

5000

Question 20

The ____ ____ ____ requires an insurance company to offer modifications to the basic coverage at the time of original application and at each renewal. These modifications apply to the Named Insured and/or the Named Insured and Family Members. Other parties eligible for PIP benefits are not subject to the modifications.

Answer 20

No- Fault law Other Requirements

Question 21

Judy has a PIP claim with $5,000 in injuries and a $1,000 PIP deductible. How much will Judy receive as a claim payment from her insurance company?

Answer 21

FORMULA:
(Damages - Deductibles) X Coinsurance = Claims Payment

ANSWER:
($5,000 Judy’s Damage - $1,000 Judy’s Deductible) X .80 (80%) = $3,200

Question 22

PIP Recovery Formula

Answer 22

(Injury Amount – Deductible Amount) X PIP Benefit % (80% in most instances) = PIP Recovery

NOTE: When you calculate a PIP recovery the calculated PIP recovery amount can never be greater than $10,000.

Question 23

Winston has a PIP claim with $5,000 in injuries and a $500 PIP deductible. How will Winston’s PIP claim be calculated?

Answer 23

($5,000 Injuries - $500 PIP Deductible) X 80%

Question 24

Greg has a PIP claim with $25,000 in injuries and a $1,000 PIP deductible. How will Greg’s PIP claim be calculated

Answer 24

($25,000 Injuries - $1,000 PIP Deductible) X 80% = $19,200… but the maximum PIP Coverage is a $10,000 Payout

Question 25

PIP is ______ to Workers’ Compensation

Answer 25

excess

Question 26

PIP is _____ to Medical Payments coverage

Answer 26

primary

Question 27

Martha Mary is involved in an auto accident in Florida and she is injured. Martha’s car is insured and she carries PIP coverage. Are Martha’s injuries covered by PIP?

Answer 27

yes, the accident occurred in Florida and she was in an insured vehicle

Question 28

Joe Insured is struck while Walking down the street in Florida and he is struck by a car and is injured. How will Joe Insured’s PIP coverage cover him if at all?

Answer 28

Joe’s injuries are covered under Joe’s PIP

Question 29

Joe Insured is struck while occupying his daughter’s car as a passenger in Georgia (Joe’s daughter is a residing member of his household). How will Joe Insured’s PIP coverage cover him if at all?

Answer 29

Joe’s injures are covered under Joe’s PIP coverage

Question 30

True or False? If an accident occurs outside of the state of Florida, the named insured’s PIP benefits apply to a relative only when the relative is occupying one of the named insured’s “insured motor vehicles”.

Answer 30

True

Question 31

What are the conditions in which an insured’s PIP will cover a non-resident who does not have their own PIP coverage or access to PIP coverage as a residing relative of anyone?

Answer 31

1. if the person is a Florida resident, if struck by the insured’s motor vehicle while a pedestrian
2. while occupying the named insured’s motor vehicle
3. neither statement is correct
4. both statements are correct

Question 32

Joe’s long-lost college roommate, Hector, has “rolled” into town. While driving to Joe’s favorite pizza parlor Joe drives off the road striking a telephone pole; Joe and Hector are both injured. Hector lives in Miami and does not own an automobile. Does Joe’s policy provide PIP benefits/coverage for Hector?

Answer 32

Yes, as long as the accident occurred in Florida AND Hector does not have any other PIP Coverage available to him.

Question 33

Individuals who do not own motor vehicles or belong to a family which owns a motor vehicle ___ entitled to the PIP benefits of the owner of the motor vehicle they were occupying or by which they were struck.

Answer 33

are

Question 34

No-Fault Law has no application

Answer 34

1. the Named insured and relatives are occupying or are struck by “other’s” vehicles while out-of-state.
2. Non-resident passengers of an insured vehicle while that vehicle is out-of-state (that is an accident not in Florida).
3. Non-residents as pedestrians in Florida.

Question 35

True or False? Non-Florida residents are covered by the PIP of the vehicle which struck them if they are struck as pedestrians.

Answer 35

False

Question 36

No-Fault’s Exclusions

Answer 36

1. Named insureds and relatives are not covered while occupying a motor vehicle owned by the insured and not covered under the insured’s policy. In other words, one cannot own two automobiles, insure only one for PIP, and receive benefits when injured in the other one.
2. Persons operating the insured’s automobile without the insured’s consent are excluded.
3. There is no coverage for persons who intentionally inflict self-injury or who are injured during the commission of a felony.

Question 37

Which, if any, of the following are covered by PIP?

Answer 37

1. a permissive user involved in an accident
2. use of an insured vehicle in the commission of a felony
3. use of an insured vehicle to injure oneself purposefully
4. a non-permissive user involved in an accident

Question 38

No-Fault’s Tort Exemption

Answer 38

is extended to an insured motor vehicle owner and/or operator (one carrying PIP) responsible for bodily injuries sustained in an accident with an insured motor vehicle (subject to the No-Fault law).

The aforementioned owner and operator are exempt from legal liability claims by an injured party to the extent PIP was paid or payable.

Question 39

Jack has PIP coverage and his neighbor Jill has PIP coverage. Jack and Jill are involved in a car accident; Jack was at fault in the accident. Jill’s injuries total $3,000.

Answer 39

1. Jill can sue Jack in court to recover the $3,000
2. None of these apply
3. Jack is exempt from any claim or suit
4. Jill can make a claim against Jack’s PIP

A: 3

Question 40

PIP exceptions AKA “thresholds”

Answer 40

Permit the recovery of non-economic loss (i.e. action for pain, suffering, mental anguish and inconvenience) if the injury results in:

• Significant and permanent loss of a bodily function. OR
• Permanent injury other than scarring and disfigurement. OR
• Significant and permanent scarring or disfigurement. OR
• Death.

Question 41

George Todd owns two cars and a truck and carries PIP coverage on all three motor vehicles. He borrows his neighbors SUV to go bike riding (the neighbor’s vehicle has a bike rack) and unfortunately George Todd is involved in an at fault accident. Will George Todd fall under the No-Fault Law’s “tort exemption”?

Answer 41

George Todd will not be exempt for claims from injuries sustained to any third parties.

Question 42

George is injured by Ringo who was at fault in the automobile accident between the two. George had $1,000 in medical bills and had purchased PIP with $1,000 deductible. Select correct statement:

Answer 42

1. George’s only recovery is under his PIP coverage; George’s barred from any recovery from RIngo
2. George can claim $1,000 from Ringo

A: #2

Question 43

Barney is injured by Aunt Bea in an automobile accident between each of their respective vehicles. Barney had $6,000 in medical bills and had purchased PIP with a $500 deductible. What tort right amount does Barney have against Aunt Bea?

Answer 43

Barney has a tort right against Aunt Bea for $1,600 - the full amount of the economic loss not paid or payable from PIP.

Economic Loss = $6,000
PIP payout = $4,400

Formula:
E.L. - PIP payout = Tort Right Amount

Question 44

Susan Studip has been convicted of driving under the influence of alcohol. Has she pierced Florida’s Financial Responsibility law?

Answer 44

yes

Question 45

Your insured, Betty Goodgirl, has been involved in an at fault auto accident in which another party was injured. She carries 10/20/10 limits. Has your insured satisfied Florida’s Financial Responsibility law

Answer 45

Yes, as she carries liability limits greater than or equal to 10/20/10

Question 46

Your insured has “triggered” Florida Financial Responsibility law which of the following may be that trigger?

Answer 46

1. All statements are correct
2. invalid registration
3. parking ticket
4. automobile accident involving bodily injury

A: #4

Question 47

Non-residents who are not required to register their vehicles in Florida are _______ to the No-Fault law if they have a motor vehicle physically present in Florida for more than 90 of the preceding 365 days.

Answer 47

subject

Question 48

On the PAP declarations page there is no premium amount corresponding to Comprehensive and Collision coverages. What does this mean?

Answer 48

Comprehensive and Collision have not been purchased by the insured and are not included in the policy.

Question 49

Jointly to the Named Insured and Loss Payee

Answer 49

The naming of a Loss Payee on the PAP Declarations ensures: claims payments under Coverage D will be paid

Question 50

“you “ & “your” (PAP definition)

Answer 50

refer to the named insured and resident spouse (if any).

Question 51

“owned” (PAP definition)

Answer 51

includes an auto leased for six months or more.

Question 52

“bodily injury” (PAP definition)

Answer 52

means bodily harm, sickness or disease and resulting death.

Question 53

“property damage” (PAP definition)

Answer 53

means physical injury to or loss of use of tangible property.

Question 54

“business” (PAP definition)

Answer 54

means trade, profession or occupation.

Question 55

“family member” (PAP definition)

Answer 55

means relatives, wards and foster children in the household of the named insured.

Question 56

“occupying” (PAP definition)

Answer 56

means in, upon, getting in, on, out of or off

Question 57

“trailer” (PAP definition)

Answer 57

means a vehicle designed to be pulled by a private passenger auto, pickup or van; or a farm wagon or farm implement while towed by any such vehicle

Question 58

any vehicle shown in the Declarations Page

Answer 58

Your Covered Auto in the PAP is defined as….

Question 59

The PAP definition of “your covered auto” includes any trailer owned by the insured.

Answer 59

true

Question 60

Johanna Insured’s insured vehicle was stolen. Johanna has a rental vehicle (a temporary substitute) for ten days while her insurance company is preparing to settle her claim. Does the rental vehicle (temporary substitute) meet the PAP definition of a “your covered auto”

Answer 60

Yes, the PAP definition of a “your covered auto” includes a temporary substitute for an insured vehicle due to that vehicle’s Destruction or Loss (Theft being considered a Loss).

Question 61

Coverage for a “newly acquired auto” will begin at the time you _______ the coverage; applied as follows

Answer 61

request

Question 62

the ________ coverage of any vehicle on a current policy of the insured applies to the
new vehicle

Answer 62

broadest

Question 63

ownership begets coverage (when you _______

the vehicle)

Answer 63

acquire

Question 64

requires insured to add within ____

of ownership

Answer 64

14 days

Question 65

replacement vehicles have coverage without

_______

Answer 65

request

Question 66

Physical Damage coverage that applies to a non-owned auto is the ________ coverage applicable to any “your covered auto” in the Declarations and is ________ over any other collectible insurance.

Answer 66

1. broadest

2. excess

Question 67

Livery

Answer 67

is the transportation of people and/or goods for hire

Question 68

injury

Answer 68

Liability coverage is not provided to any insured who intentionally causes _____ or damage.

Question 69

Single Limit

Answer 69

one limit will apply to all claims for bodily injury and property damage arising from a single accident; and the single limit is frequently called a Combined Single Limit and is abbreviated as “CSL”.

Question 70

Split Limits

Answer 70

three separate limits are listed and apply as follows =

1. the first number is for the maximum limit to any one person injured in an accident.
2. the second number is for the maximum limit to all of the people injured in an accident.
3. he third number is the limit for all property damage in an accident.

EX: 100/300/100

Question 71

______ costs are in addition of the policy limits (that is “not included” in the policy limits)

Answer 71

Defense

Question 72

primary

Answer 72

Medical Payments coverage is ________, with respect to other available medical payments coverage, when occupying owned automobiles.

Question 73

Uninsured Motorist coverage

Answer 73

law requires that every policy that provides primary Liability coverage for a specific motor vehicle must include “stacked” UMBI coverage at the same limits as apply for the Liability coverage in the policy, unless the insured, in writing –

• Rejects UMBI coverage. OR
• Elects UMBI coverage at limits lower than those that apply to the Liability coverage in the policy. OR
• Elects “Non-stacked” UM coverage

Question 74

Jeremy has three vehicles and carries stacked UMBI coverage with $25,000/$50,000 limits. What is the maximum “per person” his policy will pay in a UMBI claim

Answer 74

75,000

Calculation:
25,000 x 3 = $75,000

Question 75

non-owned

Answer 75

An insured person is entitled to the highest limits of UMBI coverage that apply to any insured vehicle if the injured insured is occupying a _______ motor vehicle.

Question 76

Part C: Uninsured Motorists (UM) coverage

Answer 76

pays compensatory damages for bodily injuries, under one’s own policy, for amounts which would otherwise have been recovered from the liability insurance of another (the responsible party in the accident) –

Part C protects the insured for Bodily Injury caused by an uninsured or underinsured motor vehicle. The Florida Statute that governs the UM law is FS 627.727

Question 77

PART C: UNINSURED MOTORIST

WHO is insured?

Answer 77

Named Insured and
Family Members
a) In any auto
b) As a pedestrian

Others are insured
while occupying “your covered auto”

Question 78

Stacked UMBI

Answer 78

coverage adds together two or more vehicle’s UMBI coverage to determine the limit of coverage available to an injured person in any one accident

Question 79

Non-stacked

Answer 79

equals the limit shown on the
declarations page, but differs from stacked in the
following ways:
1) Coverage available to an injured person while
occupying a motor vehicle is only the limit applicable to that motor vehicle
2) When the insured is occupying a non-owned vehicle, any UM on that vehicle is primary. The maximum UM paid under the insured’s policy is the highest limit on any vehicle for which they are the named insured or family member
3) UMBI does not apply to the insured while occupying any vehicle owned by insureds for
which UM was not purchased
4) A person who is injured in an accident while not occupying a motor vehicle may select limits of UMBI applicable to any vehicle afforded UMBI for which they are a named insured or
family member
5) Non-stacked coverage must be offered at reduced rates

Question 80

Determination of damages for UMBI can be achieved through:

Answer 80

1) Agreement
2) Arbitratio
3) 3) Suit

Question 81

Uninsured Motorists coverage pays for bodily injuries, under one’s own policy, for amounts which would otherwise have been ________ from the Liability insurance of the responsible person in/for the accident.

Answer 81

recoverable

Question 82

UMBI does not pay for

Answer 82

duplicate payments.
punitive damages
exemplary damages

Question 83

Bert was permanently injured in an auto accident by the negligence of Ernie. Bert’s injuries are valued at $300,000. Bert has PIP and has recovered his full $10,000 limit, and he has $300,000 of single limit UM coverage. Ernie has a liability insurance policy with limits of $50,000/$100,000/$50,000. What amount will Bert receive from his own PIP coverage?

Answer 83

$10,000

Question 84

Bert was permanently injured in an auto accident by the negligence of Ernie. Bert’s injuries are valued at $300,000. Bert has PIP and has recovered his full $10,000 limit, and he has $300,000 of single limit UM coverage. Ernie has a liability insurance policy with limits of $50,000/$100,000/$50,000. What amount will Bert receive from Ernie’s policy?

Answer 84

$50,000

Question 85

Bert was permanently injured in an auto accident by the negligence of Ernie. Bert’s injuries are valued at $300,000. Bert has PIP and has recovered his full $10,000 limit, and he has $300,000 of single limit UM coverage. Ernie has a liability insurance policy with limits of $50,000/$100,000/$50,000. What amount will Bert recover from his UMBI?

Answer 85

$240,000 ($300,000 less the $10,000 PIP and less the $50,000 of Earnie’s liability coverage)

Question 86

Laverne was injured in an auto accident by the negligence of Shirley. Laverne’s injuries are valued at $199,999. Laverne has PIP and has recovered her full $10,000 limit, and she has $100,000 per person and $300,000 of split limit non-stacked UMBI coverage. Shirley has a liability insurance policy with limits of $10,000/$20,000/$10,000. What amount will she receive from her own PIP coverage?

Answer 86

$10,000

Question 87

Laverne was injured in an auto accident by the negligence of Shirley. Laverne’s injuries are valued at $199,999. Laverne has PIP and has recovered her full $10,000 limit, and she has $100,000 per person and $300,000 of split limit non-stacked UMBI coverage. Shirley has a liability insurance policy with limits of $10,000/$20,000/$10,000. What amount will Laverne receive from Shirley’s policy?

Answer 87

$10,000

Question 88

Laverne was injured in an auto accident by the negligence of Shirley. Laverne’s injuries are valued at $199,999. Laverne has PIP and has recovered her full $10,000 limit, and she has $100,000 per person and $300,000 of split limit non-stacked UMBI coverage. Shirley has a liability insurance policy with limits of $10,000/$20,000/$10,000. What amount will Laverne recover from her own UMBI coverage?

Answer 88

$100,000 ($199,000 less the $10,000 PIP and less the $10,000 of Shirley’s liability coverage BUT UP TO THE MAXIMUM POLICY LIMITS).

Question 89

An insured has purchased “stacked” Uninsured Motorists coverage in the amount of $100,000 per person and $300,000 per occurrence and she has two vehicles on her policy. She is involved in an automobile accident at the hands of a negligent third party who does not carry insurance. The insured suffered $224,000 in injuries and she has collected the entire $10,000 of PIP coverage. What amount will she receive from her own PIP coverage?

Answer 89

10,000

Question 90

An insured has purchased “stacked” Uninsured Motorists coverage in the amount of $100,000 per person and $300,000 per occurrence and she has two vehicles on her policy. She is involved in an automobile accident at the hands of a negligent third party who does not carry insurance. The insured suffered $224,000 in injuries and she has collected the entire $10,000 of PIP coverage. What amount will she receive from the other party?

Answer 90

$0 as they are uninsured

Question 91

An insured has purchased “stacked” Uninsured Motorists coverage in the amount of $100,000 per person and $300,000 per occurrence and she has two vehicles on her policy. She is involved in an automobile accident at the hands of a negligent third party who does not carry insurance. The insured suffered $224,000 in injuries and she has collected the entire $10,000 of PIP coverage. What amount will the insured recover from her own UMBI coverage?

Answer 91

$200,000 is the correct answer: ($224,000 less the $10,000 PIP) = $214,000 BUT THE INSURED’S MAX RECOVERY IS $200,000). Remember Damages - Deductible = Payout subject to policy limits.

Question 92

Kennedy Johnson, your PAP insured, has selected Uninsured Motorists coverage with 10/20 limits even though her BI limits are 250/500. She has advised you that she has “great” health insurance and really doesn’t need UMBI coverage. What is your response?

Answer 92

1. Both statements are correct
2. You advise your insured that UMBI covers lost wages
3. neither state is correct
4. You advise your insured that UMBI covers non-economic damages such as pain & suffering

A: #1

Question 93

Unstacked Uninsured Motorists must be offered at ____

Answer 93

reduced rates

Question 94

Uninsured Motorist coverage applies if the at-fault- party’s insurer is _______

Answer 94

insolvent (meaning unable to pay debts owed)

Question 95

Staci was permanently injured in an auto accident due to the negligence of Jan. Staci’s injuries are valued at $1,000,000. Staci has PIP coverage with a $0 deductible and has recovered the full $10,000 from PIP. She has UMBI coverage of $250,000/$500,000. Jan has a Liability insurance policy with limits of $100,000/$300,000/$50,000. How much is Staci’s UMBI recovery?

Answer 95

250,000

Question 96

Zoe was injured in an auto accident by the negligence of a hit and run driver. Zoe’s injuries are valued at $50,000. She has PIP with a $0 deductible and has recovered $10,000 from her PIP. She has UM coverage of $10,000/$20,000. How much is Zoe’s UMBI recovery

Answer 96

10,000

Question 97

Dan was permanently injured in an auto accident by the negligence of Cynthia. Dan’s injuries are valued at $250,000. Dan has PIP with a $500 deductible and has recovered $10,000 from PIP. Dan has UMBI coverage of $50,000/$100,000. Cynthia has a Liability insurance policy with limits of $10,000/$20,000/$10,000. How much is Dan’s UMBI recovery?

Answer 97

50,000

Question 98

Keith was permanently injured in an auto accident by the negligence of Nora. Keith’s injuries are valued at $20,000. Keith has PIP and has recovered his full $10,000 limit, and he has $100,000 of single limit UMBI coverage. Nora has a Liability insurance policy with limits of $50,000/$100,000/$50,000 and Keith has recoverd $10,000 from Nora’s Liability insurance coverage. How much can Keith recover under his own UMBI coverage?

Answer 98

$0

Question 99

Chris was permanently injured in an auto accident by the negligence of Melanie. Chris’ injuries are valued at $1,000,000. Chris has PIP and has recovered his full $10,000 limit, and he carries $100,000 per person and $300,000 per occurrence UMBI coverage. Melanie has a Liability insurance policy with limits of $50,000/$100,000/$50,000. How much can Chris recover under his own UMBI coverage?

Answer 99

100,000

Question 100

Uninsured Motorists Bodily Injury (UMBI) coverage pays compensatory damages for _____ for amounts which otherwise should have been recovered from the Liability insurance of another.

Answer 100

bodily injuries

Question 101

Florida law requires stacked UMBI with limits equal to the policy’s Liability limits unless the…

Answer 101

1. insured elects non-stacked UMBI
2. Insured rejects UMBI coverage
3. Insured elects UMBI coverage lower than the policy’s liability limits
4. Each of these statements is correct regarding stacked UMBI coverage

A: #4

Question 102

Kathy was permanently injured in an auto accident by the negligence of Paul. Kathy’s injuries are valued at $300,000. Kathy has PIP and has recovered her full $10,000 limit, and she has $300,000 of single limit UM coverage. Paul has a Liability insurance policy with limits of $50,000/$100,000/$50,000. How much can Kathy recover under her UMBI coverage?

Answer 102

240,000
Kathy will collect $240,000 ($300,000 in injuries compensable at $10,000 of PIP; $50,000 of BI coverage from Paul; with the balance compensable under UMBI).

Question 103

PART D: DAMAGE TO YOUR AUTO

WHAT vehicles are covered?

Answer 103

1. your covered auto

2. non-owned auto, including their equipment

Question 104

Coverage for Damage to Your Auto covers ______ and _____ physical damage to YOUR COVERED AUTO

Answer 104

1. direct

2. accidental

Question 105

_____ _____ is defined as a private passenger auto, pickup, van or trailer not owned by or furnished or available for the regular use of the named insured or a family member, while being operated or in the care of the named insured or a family member

Answer 105

non-owned auto

Question 106

______ which covers the loss for upset or impact with another vehicle or object.

Answer 106

Collision

Question 107

____ ____ ____ which covers all direct and accidental loss not covered by Collision coverage.

Answer 107

Other Than Collision

Question 108

_______ ________ covers up to $20 per day, for 30 days and a maximum of $600 total payout (coverage begins 24 hours after a loss***).
Coverage terminates when “your covered auto” or “non-owned auto” is returned to use or the company pays for its loss.

*** Exception: If the cause of loss is a total theft of an insured vehicle then Transportation Expense coverage begins 48 hours after the date of loss.

Answer 108

Part D: Transportation Expenses

Question 109

____ __ _______ relate principally to equipment. The policy does not cover the following –

• Electronic Equipment: radios, stereos, tape decks & compact disc players. A limit of $1,000 applies for permanently installed equipment located in a spot not designed by the manufacturer for such equipment.
• Electronic Media: includes tapes, records, discs, other media or any other accessories used with the “electronic equipment” above

Answer 109

Part D exclusions

Question 110

_____ ______ designed for the reproduction of sound, including but not limited to radios, stereos, tape decks and compact disc players. However, there is coverage if such equipment is: (1) permanently installed in the auto; or (2) removable from a permanently installed housing unit, designed to be solely operated by power from the auto’s electrical system, and in or upon the auto at the time of loss. A limit of $1,000 applies for permanently installed equipment located in a spot not designed by the manufacturer for such equipment.

Answer 110

Electronic Equipment

Question 111

____ _____ includes tapes, records, discs, other media or any other accessories used with the “electronic equipment”

Answer 111

Electronic Media

Question 112

Transportation Expenses

Answer 112

1) $20 per day/$600 maximum
2) 24 or 48 hour waiting period if a Theft Loss
3) No Deductible applies
4) Benefit begins 24 hours after loss and ends when
vehicle is returned or company pays for loss

Question 113

Other Than Collision

Answer 113

Examples:

1) Missiles 2) Falling Objects 3) Fire 4) Theft
5) Larceny 6) Explosion 7) Flood 8) Hail
9) Water 10) Earthquake 11) Windstorm 12) Vandalism 13) Breakage of glass 14) Animal Impact

Question 114

The PAP policy affords coverage only those who have the status of _____

Answer 114

insured

Question 115

The PAP ___________ Part D coverage if the covered auto is destroyed or confiscated by governmental or civil authorities.

Answer 115

excludes

Question 116

Medical Payments coverage is issued on an ___ basis to coordinate with PIP.

Answer 116

excess

Question 117

David was permanently injured in an auto accident by the negligence of Goliath. David’s injuries are valued at $300,000. David has PIP and has recovered his full $10,000 limit, and he has $300,000 of single limit UMBI coverage. Goliath has a liability insurance policy with limits of $50,000/$100,000/$50,000. How much is David’s UMBI recovery?

Answer 117

David will collect $240,000 ($300,000 in injuries compensable at $10,000 of PIP; $50,000 of BI coverage from Goliath; with the balance compensable under UMBI).

Question 118

Exclusions under Part D Physical Damage include all BUT which of the following?

1. trailers not shown on the Declarations Page
2. camper bodies shown on the Declarations Page
3. rdar detectors
4. awnings or cabanas used for additional living facilities

Answer 118

camper bodies shown on the Declarations Page

Question 119

The Named Insured has asked you if his Medical Payments coverage will apply as he was hit by a motor vehicle as a pedestrian. How will you respond?

Answer 119

You tell him that Medical Payments does cover injuries sustained if struck as a pedestrian

Question 120

Angie was permanently injured in an auto accident by the negligence of Ruthie. Angie’s injuries are valued at $20,000. Angie has PIP and has recovered her full $10,000 limit, and she has $100,000 of single limit UM coverage. Ruthie has a liability insurance policy with limits of $50,000/$100,000/$50,000 and Angie has received $10,000 from Ruthie’s policy. What amount will Angie collect under her own UMBI coverage?

Answer 120

$0

Question 121

Medical Payments coverage in the PAP is excluded by all BUT which of the following:

1. Racing or speed contest
2. if the insured is struck as a pedestrian
3. bracelet trajectory
4. vehicles uses as residence

Answer 121

2. if the insured is struck as a pedestrian

Question 122

Your insured is involved in a multi-vehicle accident. The policy has Other Than Collision coverage with a $500 deductible and Collision coverage with a $1,000 deductible. The insured vehicle has $7,500 in damages. How much will the insured collect after applying the correct coverage and deductible?

Answer 122

6,500

Collision and upset or overturn is covered by the insured’s Collision coverage ($7,500 - $1,000).

Question 123

An insured has come to the office to file a claim. She expresses concern that the legal fees defending her will probably consume all of her policy limits. You tell her…

Answer 123

Not to worry because the PAP’s liability coverage includes a defense for her up to her policy limits

Question 124

Your insured has had a one vehicle accident with the roadbed. The policy has Other Than Collision coverage with a $250 deductible and no Collision coverage. The insured vehicle has $1,500 in damages. How much will the insured collect after applying the correct coverage and deductible?

Answer 124

$0

Collision and upset or overturn is covered by the insured’s Collision coverage. As the insured does not carry Collision coverage there is no coverage to apply to the insured’s loss

Question 125

You advise an insured that their PAP provides supplementary payments such as bail bonds and pre-trial interest…

Answer 125

correctly advised that their PAP provides supplementary payments such as bail bonds and pre-trial interest

Question 126

The PAP insuring agreement states the policy pays on behalf of the insured money damage for which the insured is legally liable to others for

1. property damage
2. inconsideracies
3. personal injury (e.g. slander)
4. bodily injury

Answer 126

4. bodily injury

Question 127

A collision with an animal is normally covered by which Physical Damage coverage?

Answer 127

other than collision

Question 128

What style of limits are available on the Personal Auto Policy (choose all that apply)?

1. split
2. unilateral
3. single

Answer 128

1. split & 3. single

Question 129

Under the Part D insuring agreement, the company agrees to pay for _____ and ________ loss.

Answer 129

1. direct

2. accidental

Question 130

Transportation Expense coverage begins ____

hours after a loss (excluding Theft losses).

Answer 130

24

Question 131

The PAP’s Medical Payments coverage is ______ when occupying owned automobile and ______
when occupying non-owned autos.

Answer 131

1. primary

2. excess

Question 132

Your insured has suffered a compensable Other Than Collision Theft loss and is in need of a rental car. You advise the insured that their Transportation Expense coverage begins ______ hours after a Theft loss.

Answer 132

48

Question 133

Your insured has had a one vehicle accident with a tree. The policy has Other Than Collision coverage with a $250 deductible and Collision coverage with a $500 deductible. The insured vehicle has $2,500 in damages how much will the insured collect after applying the correct coverage and deductible?

Answer 133

2,000

Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).

Question 134

Your insured has had a one vehicle accident with a tree. The policy has Other Than Collision coverage with a $250 deductible and Collision coverage with a $500 deductible. The insured vehicle has $2,500 in damages how much will the insured collect after applying the correct coverage and deductible?

Answer 134

2,000

Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).

Question 135

Your insured has had a one vehicle accident with a tree. The policy has Other Than Collision coverage with a $250 deductible and Collision coverage with a $500 deductible. The insured vehicle has $2,500 in damages how much will the insured collect after applying the correct coverage and deductible?

Answer 135

2,000

Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).

Question 136

WHAT are the insured’s duties after loss?

Answer 136

1. Prompt notice
2. forwarding legal papers
3. cooperation
4. submit to physical exam
5. proof of loss
6. uninsured motorist losses require the filing of a police report

Question 137

Part E of the PAP requires the insured to report to the _______ if the loss is a hit and run or a theft claim.

Answer 137

police

Question 138

The PAP “Policy Period and Territory” provisions state that coverage applies only to accidents and losses that occur during the policy period and within…..

Answer 138

• U.S., its territories, or possessions.
• Puerto Rico.
• Canada.
• Also, when a “your covered auto” is being transported between ports of these locations.

Question 139

What types of loss require the insured to file a police report to satisfy the conditions of his policy when making a claim under the PAP?

1. damage to vehicle and/or injuries to insured driver/occupant/pedestrian hit by a hit-and-run operator
2. neither answer is correct
3. both answers are correct
4. stolen vehicle

Answer 139

3. both answers are correct

Question 140

Which, if any, of the captioned statements are correct?

I. Part E of the PAP requires the insured to retain legal counsel and precludes the insured from having any future losses.

II. Part E of the PAP requires the insured to cooperate and to protect against any further loss.

Answer 140

II. Part E of the PAP requires the insured to cooperate and to protect against any further loss.

Question 141

________ ______ ______for a non-owned auto which is furnished or available for the regular
use of the insured (Liability and optional Medical can be added by endorsement)

Answer 141

Extended Non-owned Coverage

Question 142

_____ ____ _____ covers for towing and costs of labor performed at the place if disablement for up to
$25, $50, $75, and $100 per disablement

Answer 142

Towing and Labor

Question 143

_____ __ ______ ______ covers tapes, records,

and discs up to $200. Other customized equipment for pickup and vans for specified amounts

Answer 143

Coverage for Excluded Equipment

Question 144

_____ _____ _____ provides Liability, Medical Payments, and Uninsured Motorist Bodily Injury
for those who do not own an auto

Answer 144

Named Non-owner Coverage

Question 145

__________ covers motorhomes, motorcycles, golf carts, and allterrain vehicles

Answer 145

Miscellaneous

Question 146

_____ ____ _____ required when the PAP covers two

or more relatives (whether or not residing together) or individuals residing together

Answer 146

Joint Ownership Coverage

Question 147

____ ___ ___ ________ _____ —increases the $20/$600 to any limit selected by the insured

Answer 147

Increased Limits of Transportation Express Coverage

Question 148

_____ _____—increase medical to 100% and Work Loss to 80%. The maximum amount of coverage
remains $10,000

Answer 148

Extended PIP

Question 149

________ ___—only available to the named insured and family members only, and only if the Extended PIP is purchased. PIP coverage can be increased by either
$10,000, $25,000, $40,000, or $90,00 of additional coverage

Answer 149

Additional PIP

Question 150

The Extended Non-Owned coverage endorsement provides coverage for the insured’s use of non-owned autos in _______

Answer 150

business

Question 151

Fill in the missing dollar amount (e.g. 100, 200,300,500).

The PAP’s Audio Visual endorsement provides coverage for tapes, records, disc, and media up to
$______ while contained in an insured auto.

Answer 151

200

Question 152

What does the Extended Personal Injury Protection endorsement cover?

Answer 152

The endorsement extends PIP medical benefits to 100% and work loss benefits to 80%

Question 153

WHAT is the standard rating plan used by insurance companies:

Answer 153

• territory
• age
• sex
• marital status
• use of vehicle
• driving record

Question 154

WHAT are the discounts available?

Answer 154

1. Mulit-car
2. good grades
3. Defensive Driving course
4. Anti-lock brakes
5. Anti-theft device
6. safe driver / accident free
7. mature driver

Question 155

PAP rating usage categories includes which if any of the following (choose as many as apply):

1. business usage
2. caloric intake
3. pleasure usage
4. commuting (work/school usage)

Answer 155

1. business usage
2. pleasure usage
3. commuting (work/school usage)

Question 156

Automobiles are assigned a ______ which recognizes the value of a vehicle and its damageability.

Answer 156

symbol

Question 157

Florida law permits an insurance company to cancel a personal auto policy within the first ____ days of a new policy for any reason.

Answer 157

60

Question 158

After 60 days of a new policy — and for the remainder of a new term, and from the inception of a renewal, an insurer may cancel only for –

Answer 158

• non-payment of premium.
• material misrepresentation or fraud.
• suspension or revocation of the drivers license or
  registration of an operator.**

Question 159

requirement for Cancellation Notice

Answer 159

• a 45 days’ notice is required when cancelling for
  underwriting reasons.
• a 10 days’ notice is required when cancelling for non-
  payment of premium.
• a maximum of 30 days is permitted to return any
  unearned premium paid to the insured.

Question 160

A cancellation notice must –

Answer 160

(a) state the reason(s) for the cancellation.
(b) notify the insured of a right to an Insurance
Department hearing to contest the cancellation.
(c) advise the insured of possible Florida Joint
Underwriting Association (FJUA) eligibility.

Question 161

An insurer cancelling a policy is required to provide a

____ days’ notice for underwriting reasons and a ____ days’ notice for non-payment of premium.

Answer 161

45 days

10 days

Question 162

Florida law requires the insurer to disclose full policy information to a claimant within 30 days upon a written request

Answer 162

Unfair Trade Practices and

Information Disclosure to Claimants

Question 163

Any licensee who violates the law shall be subject to a fine in an amount not greater than $_____ for each non-willful violation.

Answer 163

$2,500

Question 164

Any licensee who violates the law shall be subject to a fine in an amount not greater than $_____ for each willful violation.

Answer 164

$20,000

Question 165

Unfair Trade Practices Penalties

Answer 165

(1) Licensees are precluded from any/all unfair methods of competition and/or unfair or deceptive act or practice involving the business of insurance.
(2) Any licensee who violates the law shall be subject to a fine in an amount not greater than $2,500 for each non-willful violation and not greater than $20,000 for each willful violation.

Question 166

If requested in writing by a claimant or claimant attorney, F.S. 627.4137 requires an insurer to _______ full policy information.

Answer 166

disclose

Question 167

True or False? Motorcycle owners and operators are subject to Florida’s Financial Responsibility law.

Answer 167

True

Question 168

True or False? There is currently no insurance requirement to register a motorcycle in Florida.

Answer 168

true

Question 169

Acts of negligence or willful misconduct by a minor are _______ to the parent or guardian of the minor.

Answer 169

imputed

Question 170

Parents or guardians of minors are ____ and _____ ______ with the minor for acts of the minor.

Answer 170

jointly & severally liable

Question 171

An insured can be required to pay for the inspection; not to exceed $____

Answer 171

$5

Question 172

Waiver for Inspection (an inspection not required if:)

Answer 172

1. the policyholder has been insured for 2 years or longer with physical damage coverage on a policy verified by the new insurer.
2. the vehicle is a new vehicle and a bill of sale, buyer’s order, or lease has been provided to the insurer.
3. if the required inspection is not completed PHYSICAL DAMAGE COVERAGE CANNOT BE SUSPENDED.
4. however, a claims payment can be withheld UNTIL the required inspection is completed.

Question 173

Herman Hornblower, your insured, has cancelled his PAP policy. How many days does the insurer have to return Herman’s pro-rata unearned premium?

Answer 173

30 days

Question 174

Your auto insured has suffered a cracked driver’s side window. She has a $250 Other Than Collision deductible but she was told that glass claims are not subject to a deductible. How will you advise your client?

Answer 174

You advise your client that non-windshield glass claims are compensable under the Other Than Collision coverage subject to her $250 deductible.

Question 175

Florida law recalls an insurer to place an insured with a ___ days’ notice of non-renewal.

Answer 175

45

Question 176

Little Richard, your auto insured has suffered a cracked driver’s side window. He has a $1,000 Other Than Collision deductible but he was told that glass claims are not subject to a deductible. How will you advise your client?

Answer 176

You advise Little Richard that non-windshield glass claims are compensable under the Other Than Collision coverage subject to his $1,000 deductible.

Question 177

MECHANICAL BREAKDOWN INSURANCE

Answer 177

The coverage is for failure by a part, notably: engine, transmission, drive axle, steering assembly, air conditioning, and front suspension.

Coverage is similar to extended warranty coverage. Some policies cover rentals for up to $15 a day with a maximum of $75

Question 178

Mechanical Breakdown Insurance Exclusions

Answer 178

1) Lack of maintenance
2) Fire, theft, or collision
3) Odometer tampering
4) Towing
5) Tune-­‐ups
6) Seals or gaskets
7) Racing
8) Towing Trailer
9) Public Livery

Question 179

An accident involving a bodily injury is a _______________ of the financial responsibility law?

Answer 179

trigger

Question 180

PAP rating usage categories includes _____, business, and commuting

Answer 180

pleasure

Question 181

Your insured has advised you that she lives with he fiance and wants to make sure that her policy will cover a vehicle which she and her fiance own. What endorsment does she need on her policy?

Answer 181

joint ownership coverage

Question 182

Under the Part D insuring agreement, the company agrees to pay for _______ and accidental loss

Answer 182

direct

Question 183

Which PAP endorsement provides liability coverage for a non-owned automobile furnished or available for the regular use of the insured.

Answer 183

extended non-owned coverage

Question 184

The PAP defines a “your covered auto” to include ______________substitutes if an insured vehicle is unavailable due to: breakdown or repair, servicing, loss or destruction.

Answer 184

temporary

Question 185

Medical Payments coverage provides payment without regard to fault or ____________ liability.

Answer 185

status

Question 186

Which PAP endorsement Provides Liability coverage for a non-owned automobile furnished or available for the regular use of the insured.

Answer 186

extended non-owned coverage

Question 187

Greg Grumble, your PAP insured, has suffered a loss. He may be required to complete an _______ under oath

Answer 187

examination

Question 188

What PAP endorsement provides liability, medical payments and UM coverages for a named individual who does not own an automobile, to cover for operaton of autos owned by others?

Answer 188

Named non-owner coverage

Question 189

The PAP defines a “your covered auto” to include ______ substitutes if an insured vehicle is unavailable due to: breakdown or repair, servicing, loss or destruction.

Answer 189

temporary

Question 190

Medical Payments coverage provides payment without regard to fault or _____ liability.

Answer 190

legal

Question 191

Other Than Collision coverage covers all loss not considered a Collision except those which are specifically _______.

Answer 191

excluded

Question 192

Uninsured motorist coverage does not apply towards _____ or exemplary damages.

Answer 192

punitive

Question 193

By listing the Loss Payee on the PAP’s Declarations page the Loss Payee is jointly paid with the insured for losses incurred under which coverage part?

Answer 193

Part D

Question 194

____ ____ _____ covered perils include: water damage, glass breakage, and wind damage

Answer 194

other than collision

Question 195

An insured injured by an uninsured motorists is entitiled to the ______ coverage for any insured vehicle of his auto policy’s UMBI coverages

Answer 195

broadest

Question 196

Part E of the PAP requires the insured to cooperate and to _____ against any further loss.

Answer 196

protect

Question 197

Which PAP endorsment covers equipment such as motor homes, motorcycles, gold carts and all-terrain vehicles

Answer 197

miscellaneous type vehicle

Question 198

Uninsured motorist coverage applies if the at-fault party’s insurer is _______.

Answer 198

insolvent

Question 199

The PAP _____ _____ states the policy pays on behalf of the insured money damage for which the insured is legally liable to others for Bodily Injury and Property Damage.

Answer 199

insuring agreement

Question 200

Part A Liability of the PAP excludes coverage for a non-_______ user

Answer 200

permissive

Question 201

A vehicle used for any insured vehicle because the insured vehicle is out of normal use because of its breakdown, repair, servicing, loss, or destruction.

Answer 201

Temporary Substitute

Question 202

This PAP definition refers to the named insured and resident spouse if any

Answer 202

You and Your

Question 203

Transportation Expense coverage begins ___ hours after a Theft loss.

Answer 203

48

Question 204

Mechanical Breakdown covers mechanical breakdown and specifically ______________ collision and specified perils.

Answer 204

Excludes

Question 205

This PAP coverage pays to repair damage an insured has caused to another person’s vehicle or property.

Answer 205

Property Damage Liability

Question 206

Automobile coverage designed to provide protection for the insured should he or she be included in an accident in which the driver at fault has no insurance (or not enough insurance) to cover the loss.

Answer 206

Uninsured Motorists Bodily Injury

Question 207

This PAP provision states the coverage applies only to accidents and losses that occur during the policy period and within the United States, Puerto Rico, or Canada.

Answer 207

Policy Period and Territory

Question 208

This PAP endorsement adds Liability coverage for non-owned autos that are furnished and available for the regular use of the insured.

Answer 208

Extended Non-Owned Coverage

Question 209

This PAP endorsement provides Liability, Medical Payments, and UMBI coverages for a “named individual” who does not own an automobile to cover for the operations of autos owned by others.

Answer 209

Named Non-Owner Coverage

Question 210

This PAP endorsement covers equipment such as motor homes, motorcycles, golf carts and all-terrain vehicles.

Answer 210

Miscellaneous Type Vehicle

Question 211

This PAP endorsement increases PIP medical benefits from 80% to 100% and work loss benefits from 60% to 80%.

Answer 211

Extended Personal Injury Protection

Question 212

This PAP endorsement increases the $10,000 per person maximum PIP benefit.

Answer 212

Additional Personal Injury Protection

Question 213

The coverage provided in a Florida Auto policy that provides coverage for the insured’s own injuries on a first-party basis, without regard to fault.

Answer 213

Personal Injury Protection

Question 214

What is the PIP Death Benefit?

Answer 214

$5,000

Question 215

What is the maximum per-person/per-occurrence PIP benefit?

Answer 215

$10,000

Question 216

What percentage does PIP pay for medical expenses?

Answer 216

80%

Question 217

What percentage does PIP pay for lost wages?

Answer 217

60%

Question 218

What percentage does PIP pay for the performance of household services by other?

Answer 218

100%

Question 219

If a motor vehicle is subject to the law, and there is compliance through insuring for PIP, then anyone legally responsible for bodily injuries arising from that motor vehicle is EXEMPT from legal liability claims, to the extent PIP was paid or payable.

Answer 219

100%

Question 220

If a motor vehicle is subject to the law, and there is compliance through insuring for PIP, then anyone legally responsible for bodily injuries arising from that motor vehicle is EXEMPT from legal liability claims, to the extent PIP was paid or payable.

Answer 220

Tort Exemption

Question 221

One limit applies to all claims for bodily injury and property damage arising from a single accident.

Answer 221

Single Limit

Question 222

Pays compensatory damages for bodily injuries, under one’s own policy for amounts which woud otherwise have been recovered from the liability insurance of another person

Answer 222

PART C- Uninsured Motorist (UM)

Question 223

True or False: As regards PIP benefits to the named insured’s residing relatives for accidents that occur outside of the state of Florida; the residing relative is covered only when the relative is occupying the named insured’s “motor vehicle”.

Answer 223

true

Question 224

Brenda has a PIP claim with $8,000 in injuries and a $0 PIP deductible. How much will Brenda receive as a claims payment from her insurance company?

Answer 224

$6,400 payout to Brenda ($8,000 injuries – $0 deductible = $8,000 X 80%)

Question 225

Kevin has four vehicles and he insures all of them with $10,000 per person and $20,000 per occurrence of ‘stacked’ Uninsured Motorists Bodily Injury. Kevin was involved in an auto accident with a hit and run driver (the accident was the other driver’s fault). Kevin was alone in his car, what is the maximum recoverable amount Kevin could receive under his Uninsured Motorist Bodily Injury coverage?

Answer 225

40,000

As Kevin carries $10,000 per person and has “stacked” Uninsured Motorists cover on four vehicles he has up to $40,000 per person of UM coverage available.

Question 226

PIP exceptions also known as “thresholds” permit the recovery of non-economic loss (i.e. action for pain, suffering, mental anguish and inconvenience) if the injury results in all EXCEPT which of the following?
1. significant and permanent loss of a bodily function
2. permanent injury other than scarring and
disfigurement
3. significant and permanent scarring or disfigurement
4. loss of work longer than 21 days

Answer 226

4. loss of work longer than 21 days

PIP exceptions also known as “thresholds” permit the recovery of non-economic loss (i.e. action for pain, suffering, mental anguish and inconvenience) if the injury results in: significant and permanent loss of a bodily function; or permanent injury other than scarring and disfigurement; or permanent injury other than scarring and disfigurement; or death.

Question 227

Herbert was permanently injured in an auto accident caused by the negligence of John. Herbert’s injuries were valued at $200,000. Herbert has PIP and has recovered his full $10,000 limit, and he has a $300,000 single limit Uninsured Motorist coverage in his Personal Auto Policy (PAP). John has a Personal Auto Policy (PAP) with Bodily Injury Liability limits of $50,000 per person and $100,000 per occurrence. What is the dollar amount of Herbert’s Uninsured Motorist Bodily Injury claim?

Answer 227

140,000

Herbert will receive $140,000 under his Uninsured Motorists coverage ($200,000 of injuries – $10,000 PIP recovery less the $50,000 of Bodily Injury coverage from John’s policy).

Question 228

Three Triggers of the FR law.

Answer 228

This includes resident and nonresident drivers.

Three Triggers of the law:

1. Accident involving bodily injury
2. Accident involving property damage when vehicle is inoperative
3. Accident involving traffic violations such as DUI and committing a felony

Question 229

10/20/10 must be carried.

Answer 229

When 10/20/10 is not carried, the owner and operator to avoid penalties must:

1. Pay legally valid claims up to 10/20/10
2. Provide certification of financial responsibility

Question 230

Penalties for not showing financial responsibility:

Answer 230

1. Driver’s license suspended
2. Registration of all vehicles suspended
3. Owner or operator responsible for up to 10/20/10
4. File SR-22 that certifies coverage is in effect (filed for three years)

Question 231

SR-22

Answer 231

A “Named Non owner Policy” is required if the operator of a vehicle does not own a vehicle and needs an SR-22 filing. This coverage is only when they are operating a vehicle owned by others.

I00/300/50 or $350,000: Limits required of anyone found guilty of DUI. If a person has gone 3 years without being guilty of a DUI or a felony traffic offense, they are allowed to go back to standard coverage limits.

Question 232

QUICK REVIEW:

Answer 232

How is the FINANCIAL RESPONSIBILITY R law triggered?

What happens when the FR law does not exist at the time of the accident?

Question 233

NO-FAULT

Answer 233

Simply put…it doesn’t matter who is at fault. No one likes to get sued. That is the reasoning behind No­ Fault. If you carry the state required minimum (10/20/10), then you cannot be sued because of the accident UNLESS a certain threshold is met.

Elements

Personal Injury Protection (PIP), the coverage under the No-Fault Law, is MANDATORY for all owners of a motor vehicle.

PIP ONLY APPLIES to Bodily Injury claims.

Definitions

“Motor vehicles:’ which is defined to include all self-propelled vehicles with four or more wheels which are of a type both designed and required to be licensed for use on Florida highways, and trailers and semitrailers designed for use with such vehicles.

The following are EXEMPT from the requirement of carrying PIP:
1. Taxicabs
2. Mobile homes
3. Limousines
4. Government-owned vehicles used to transport more than 5 passengers (city bus).
5. School buses

( Remember: You can access your PIP on all the above vehicles EXCEPT mobile homes and city buses
Who is an owner under the PIP law? LOAD:
1. .Legal title is held
2. Option to purchase lease
3. Agreement to lease six months or more
4. Debtor in possession

For enforcement of this requirement, evidence of insurance has to be provided at the time of registration annually.

Substitutes for insurance are:
I. Certificate of deposit for $30,000
2. Self-insurance

Nonresidents

Nonresidents are not required to register their vehicle in Florida but are still subject to the law if the vehicle has been PHYSICALLY present in Florida for more than 90 of the preceding 365 days.

Penalties

There are 3 penalties for not complying with the No-Fault law:

1. Denied immunities from legal liability
2. Personally liable for payment of PIP benefits
3. Driver’s license and registration are subject to suspension

PIP Benefits

The TOTAL Benefit of PIP is $10,000 ($2,500 limit if individual not diagnosed with emergency conditions)­
DRIM:
1. Death Benefit of $5,000 in addition to $10,000.
2. Replacement Services, 100%.
3. Income from Work, 60%.
4. Medical, 80%.

An Extended PIP endorsement can be purchased for only the named insured and family members. The endorsement raises:

1. Medical from 80% to 100%
2. Work loss from 60% to 80%

Additional PIP Endorsement increases $10,000 limit to:

1. $20,000
2. $25,000
3. $40,000
4. $90,000

Increase does not affect the $5,000 death benefit.

For any economic loss over the maximum benefits, the injured party has the right to legal action.

Primary/Excess

PIP is PRIMARY against ALL other medical and disability coverages EXCEPT WC. PIP is EXCESS over WC.

Question 234

(l) QUICK REVIEW:

Answer 234

Who is considered an owner?

Explain the PIP benefits.

Question 235

Who is Covered:

Answer 235

I. Named Insured
a. In Florida:the named insured is covered while occupying ANY defined motor vehicle OR if struck by a defined motor vehicle as a pedestrian

b. Outside Florida: the named insured is occupying his/her OWN insured motor vehicle or motor vehicle owned by RESIDENT RELATIVE (must be insured for PIP).
2. Relative who resides with named insured
a. In Florida: same as named insured
b. Outside Florida: ONLY while occupying the named insured’s PIP-covered motor vehicle
3. Other than Named Insured or Resident Relative

If not an owner or entitled to benefits from another owner’s insurer, then covered if:

1. Occupying named insured’s motor vehicle in Florida
2. Struck by insured’s motor vehicle while a pedestrian if Florida resident

Exclusions -VOS:

l. .Vehicles owned and not covered by insured’s policy
2. Operating insured’s vehicle without consent
3. Self-injury intentionally inflicted or injured committing a felony

Tort Exemption

The threshold (FS 627.737) is:

l. Loss of major bodily function
2. Permanent injury within a reasonable degree of medical probability
3. Death
4. Significant scarring or disfigurement

Unless you have one of the above, you can’t sue someone for your future pain, suffering, etc. You will use your OWN insurance.

Tort exemption tied to vehicle NOT the person.

Example: If you borrow your friend’s vehicle and that vehicle is not insured for PIP, then you are NOT tort exempted.

Example: You let your friend borrow your vehicle. That vehicle has PIP coverage, but your friend does not have PIP coverage. Your friends do not get your PIP benefits but they do get your tort exemption.

Question 236

QUICK REVIEW:

Answer 236

What vehicles are eligible for the PAP policy? Name the different sections of the PAP policy.

Question 237

PERSONAL AUTO POLICY (PAP)

Answer 237

Covers:
I. Individual
2. Related persons
3. Unrelated who reside together

Will not be issued to a:

1. Corporation
2. Partnership
3. Combination of interests

Eligibility

Type of Vehicle:
Private passenger auto and a pickup truck or van that has a Gross Vehicle Weight (GVW) of less than 10,000 pounds.

The vehicle cannot be used to deliver or transport goods or materials, except for those incidental to the insured’s business of furniture or equipment installation, maintenance or repair, or for farming or ranching.

Ownership

Intended for private family exposure, issued only to an individual or related persons, or unrelated persons who reside together.

If a non owner of auto, then they must obtain a Named Non Owner Policy.

PAP Sections

1. Declarations
2. Agreement and Definition
3. Part A-Liability Coverage
4. Part B-Medical Payments
5. Part C-Uninsured Motorists
6. Part D-Damage to Your Auto
7. Part E-Duties After an Accident or Loss
8. Part F-General Provisions
9. PIP is added by endorsement

■	3.4 PAP DECLARATIONS
Identifies and states:
l.  Named insured
2.	Mailing address
3.	Policy period
4.	Coverages that apply
5.	Limits
6.	Premiums
7.	Loss payees
Loss payee" is someone who has an interest in a vehicle, such as a bank or finance company.

Question 238

3.5 PAP DEFINITIONS

Answer 238

■
“Named Insured” is referred to as “you” and “your” and includes resident spouse.

Example: An insured and his spouse are insured under a PAP policy. The couple split up and the wife leaves the residence (husband was the named insured). The wife is no
longer a named insured.

“Owned” is defined as any auto leased for six months or more.

“Bodily Injury” is bodily harm, sickness, or disease resulting in death. “Property Damage” is physical injury to or loss of use of tangible property. “Business” means trade, profession, or occupation.
“Family Member”is defined to include relatives, wards, and foster children in the named insured’s house.

“Occupying” means in, upon, getting in, on, out, or off.

“Trailer”means a vehicle designed to be pulled by private passenger, pickup, or van, or a farm wagon or farm implement while towed by any such vehicle.

“Your Covered Auto (YCA)” is defined as follows:
l. Any vehicle in the Declarations
2. Newly acquired auto{14 days to declare if additional vehicle)
3. Any trailer you own
4. Any auto or trailer you do not own while used as a temporary substitute. Only Part A, Part B, and
UM will follow the insured in temporary substitute while the vehicle is:
a. Broken down
b. Being repaired
c. Being serviced
d. Considered a Loss
e. Destruction of vehicle
(D Remember:If the auto is non owned, then PIP and Part D will also follow the insured regardless of the reason the auto is being driven.

“Newly Acquired Auto” is defined to include any of the following lypes of vehicles you become the owner of during the policy period:

l. A private passenger auto
2. A pickup or van, for which no other insurance policy provides coverage, that:
a. Has a GVW of less than 10,000 lbs
b. Is not used for delivery or transportation of goods and materials unless it is:
i. Incidental to your “business” of installing, maintaining, or repairing furnishings or equipment
ii. Farming or ranching

Question 239

Coverage for the “newly acquired auto”

Answer 239

For Liability, Medical Payments, Uninsured Motorists, or any other coverage, EXCEPT for coverage for damage to your auto (Part D), the newly acquired auto automatically receives coverage that is equal to the broadest coverage that the insured has for any vehicle on the Declarations page.

If the “newly acquired auto” is an ADDITIONAL auto, the vehicle has coverage for 14 days. After 14 days, the insured must request coverage.

If the “newly acquired auto” is a REPLACEMENT VEHICLE, then the vehicle is covered until the policy expires, even if the insured did not request coverage.

For Part D-Damage to Your Auto, a “newly acquired auto” is covered IF the insured has collision coverage or other than collision coverage on at least one vehicle, then the insured receives automatic coverage for at least 14 days. Coverage is equal to the broadest coverage (smallest deductible) on any vehicle on the policy. After 14 days, the insured needs to request the vehicle be added to the policy.

If the insured does not carry collision or other than collision on at least one of the vehicles on the insured’s policy, then the insured receives physical damage on a “newly acquired auto” for four days with a $500 deductible. After four days, the insured must request that the vehicle be added to the policy for coverage to
continue.

Question 240

QUICK REVIEW:

Answer 240

Define ‘‘your covered auto.”

Define “newly acquired auto.”

Question 241

PART A-LIABILITY

Answer 241

Coverage
Part A pays on behalf of the insured for Bodily Injury (BI) and Property Damages(PD). Along with BI and PD, Part A pays for defense against claims.
Cost associated with defense is called Supplementary Payments. These payments are in addition to the policy limits.
{S) Example: Bill’s PAP policy has a limit of $100,000 (limits are discussed further down).
Bill hit a car at an intersection after running a red light. The total amount in damages is
$95,000 and$15,000 in defense costs. Bill’s PAP policy will pay$110,000.

Supplementary Payments-LIABLE:
1. Loss of earnings of $200 per day
2. Interest on judgments
3. Appeal bonds
4. B.ail bonds up to $250
5. Legal expenses
6. Expenses incurred at insured’s request

Who is insured:
1. Named Insured and family members for the ownership, maintenance or use of any auto or trailer
Example: Sixteen-year-old son borrows the neighbor’s 1963 Corvette to impress his girlfriend. On the way to her house, he causes an accident and is sued for
BI & PD. The 16-year-old’s PAP provides Liability coverage because he is a FAMILY MEMBER and coverage is for ANY auto. Keep this in mind; you can substitute ANY vehicle in the place of the 1963 Corvette and you would still be covered, EVEN an 18-wheeler.

2. Any person using your covered auto with permission
   (S) Example: Jack’s auto is stolen. The thief causes a wreck. There is no liability protection for the thief because he did not have permission to use the auto.
3. Anyone legally responsible for your covered auto (vicariously liable)

Exclusions

Example: Your boss asked you to run an errand for the company. Running the errand, you cause an accident that causes BI and PD.If you had not been running that errand for your company, the accident would not have happened. Because of that, your employer is VICARIOUSLY LIABLE for your accident. The policy covers you and your employer.

Example: Using above example, you run an errand for your employer but instead of your car, you borrow your friend’s car. You are covered and your employer is covered, BUT the friend is not covered under your PAP

Insured Not Protected for:

1. Intentional injury
2. Damaged property that is owned or transported by insured
3. Damage to property rented to, used by, or in the care of the insured, EXCEPT damage to residence or private garage
4. Injury to employee in the course of employment (does not apply to domestic workers not covered by WC)
5. Using vehicle as public livery EXCEPT car pools
6. Selling, repairing, servicing, storing, or parking vehicles EXCEPT named insured, family member, partner or employee of insured or family member for use of your covered auto
7. Business use, EXCEPT farming or ranching or use of nonowned pickup or van
8. Stealing the auto
9. Nuclear Energy liability policy

Vehicle Not Protected:

1. Has fewer than four wheels
2. Furnished regularly
3. Furnished regularly to family member, EXCEPT named insured or spouse
4. Housed in a facility designed for racing or speed contests

Question 242

QUICK REVIEW

Answer 242

Who is an insured under Part A?

Question 243

PART A Limits

Answer 243

Limits

Single Limits: Only one limit applies. Minimum single limit is $30,000.
Split Limit: Limits are split into three limits. The minimum split limit is 10/20/10. The first 10 means $10,000 per person for bodily injury.
The 20 means $20,000 per accident total for ALL bodily injury.
The last 10 means $10,000 per accident for property damage.

Liability limits apply as PRIMARY coverage for vehicles OWNED by the insured. Coverage is EXCESS for vehicle NOT OWNED by the insured.

Example: Tom borrows Jim’s car. Tom is an insured under both his and Jim’s policy. If
an accident occurs, Jim’s policy will respond first and Tom’s policy will respond once Jim’s limits are exhausted.

Question 244

PART B-MEDICAL PAYMENTS

Answer 244

Coverage
Part B covers necessary medical and funeral expenses for up to three years from the date of the accident. Part B pays without regard to fault.

Unlike Part A, which is a third party coverage, Part B is a first party coverage.

Example: Sam, who has PAP policy, runs his auto into Terry at a stop sign in October of 2010. Sam receives cuts to the face, which needs surgery. In June of 2012, Sam is still have complications from the cuts he received in the accident and Sam’s doctor believes more surgery is needed. Sam’s medical expenses in June would still be covered because Part B pays within three years from the date of the accident.
Insured under Part B:
l. The named insured and family members while: occupying (remember the definition) any car or as a pedestrian while struck by any motor vehicle designed for road use or by any type of trailer
2. Others while: occupying “your covered auto” (remember the definition)

Example: Jessica ran a red light while driving her covered auto and ran into another vehicle. The passengers in the other vehicle were badly hurt. The named insured, her son, and two of her son’s friends were also badly injured. Part B would pay the medical bills for the named insured, her son, and her son’s friends. It would not cover the medical bills for the other vehicle’s passengers. If the other car sued, then Jessica’s Part A could apply.

Question 245

PART B Exclusions

Answer 245

Exclusions

1. Fewer than four wheels
2. Public/Livery
3. Workers’ compensation is payable
4. Auto which is furnished or available for regular use
5. Used without permission
6. Business use of non-private passenger auto
7. Racing facility

How losses are paid

Part B is PRIMARY when occupying an owned auto. Part B is EXCESS when occupying a non owned auto.
Any amount payable under Part Bis reduced by any amounts payable under Part A-Liability, Part C-UM, or PIP.

Remember, EXCESS means that Part B will pay some or all of the 20% medical not paid by PIP (PIP pays 80% medical) and amounts over the $10,000 PIP maximum. Part B also doesn’t pay the PIP deductible.

How it works:
Steve has an accident and has $5,000 in medical bills. PIP pays 80% of $5,000 = $4,000. Steve has no PIP deductible, so $4,000 is paid.

Part B (Steve’s policy has $2,000 limits) will pay $1,000 to cover the $5,000 in medical bills. Why will PIP and Part B combine to meet the $5,000?

Because of the Principle of Indemnity which is to put the insured back in the same financial condition they were in before the accident.

The common limits under Part Bare $500 to $5,000 and they are PER PERSON/PER ACCIDENT.

Question 246

■ 3.8 PART C-UNINSURED MOTORIST

Answer 246

Coverage
PartC protects the insured for Bodily Injury caused by an uninsured or underinsured motor vehicle. The Florida Statute that governs the UM law is FS 627.727.
@ Example: A jury awards $200,000. The atjault party had $50,000 (they would be considered underinsured). The Insured had $10,000 PIP and $5,000 Part B Med Pay. Payments would be as follows:

$200,000 - $50,000 - $10,000 - $5,000 = $135,000.
$135,000 is what would be payable under UM.

Insureds:

1. Named Insured and Family members:
   a. In any auto
   b. As a pedestrian
2. Others while occupying “your covered auto”

What is considered an UM vehicle:

1. No insurance
2. Limits are lower than damages
3. Insolvent carrier
4. Hit-and-run vehicle

Limits

There can be a single limit, which is $20,000 per accident OR there can be split limits with $10,000 per person, $20,000 per accident (10/20) being the minimum.

Unlike Part A-Liability, you will notice that UM doesn’t pay for property damage, just bodily injury.

The UM law (FS 627.727) requires that every policy that provides Part A-Liability Coverage must include “stacked” UM at the same limits as apply for Liability coverage, unless the insured, in writing:

1. Rejects UM coverage; or ·
2. Elects UM coverage at limits lower than those for Liability; or
3. Elects non-stacked UM coverage

Stacked vs. Non-stacked

“stacked” is when the coverage for two or more vehicles is added together to determine the limit of coverage available to an injured person in any one accident.
(S) Example: Two autos with $100,000 each equals $200,000 stacked UM coverage.
“Non-stacked” equals the limit shown on the declarations page, but differs from stacked in the following ways:
1. Coverage available to injured person while occupying motor vehicle is only limit applicable for that vehicle.
2. When the insured is occupying a nonowned vehicle, any UM on that vehicle is primary. The maximum UM paid under the insured’s policy is the highest limit on any vehicle for which they are the named insured or family member.
3. UM does not apply to the insured while occupying any vehicle owned by the insureds for which UM was not purchased.
4. A person who is injured in an accident while not occupying a motor vehicle may select limits of UM applicable to any vehicle afforded UM to which they are a named insured or family member.
5. Non-stacked coverage must be offered at reduced rates.

The UM law (FS 627.727) requires that insurers annually send a notification to all insureds of their options under the UM law.

Umbrella policies are not required to include UM, but the insurer must offer at least $1,000,000 in limits.

Determination of damages for UM can be achieved through:

1. Agreement
2. Arbitration
3. Suit

Question 247

QUICK REVIEW:

Answer 247

What are the differences between Stacked and Non-Stacked?

Question 248

PART C-UNINSURED MOTORIST

Answer 248

Coverage
Part C protects the insured for Bodily Injury caused by an uninsured or under insured motor vehicle. The Florida Statute that governs the UM law is FS 627.727.
@ Example: A jury awards $200,000. The at fault party had $50,000 (they would be considered under insured). The Insured had $10,000 PIP and $5,000 Part B Med Pay. Payments would be as follows:

$200,000 - $50,000 - $10,000 - $5,000 = $135,000.
$135,000 is what would be payable under UM.

Insureds:

1. Named Insured and Family members:
   a. In any auto
   b. As a pedestrian
2. Others while occupying “your covered auto”

What is considered an UM vehicle:

1. No insurance
2. Limits are lower than damages
3. Insolvent carrier
4. Hit-and-run vehicle

Limits:
There can be a single limit, which is $20,000 per accident OR there can be split limits with $10,000 per person, $20,000 per accident (10/20) being the minimum.

Unlike Part A-Liability, you will notice that UM doesn’t pay for property damage, just bodily injury.

The UM law (FS 627.727) requires that every policy that provides Part A-Liability Coverage must include “stacked” UM at the same limits as apply for Liability coverage, unless the insured, in writing:

1. Rejects UM coverage; or ·
2. Elects UM coverage at limits lower than those for Liability; or
3. Elects non-stacked UM coverage

Question 249

PART C - Stacked vs. Non-stacked

Answer 249

Stacked” is when the coverage for two or more vehicles is added together to determine the limit of coverage available to an injured person in any one accident.
(S) Example: Two autos with $100,000 each equals $200,000 stacked UM coverage.
“Non-stacked” equals the limit shown on the declarations page, but differs from stacked in the following ways:
1. Coverage available to injured person while occupying motor vehicle is only limit applicable for that vehicle.
2. When the insured is occupying a nonowned vehicle, any UM on that vehicle is primary. The maximum UM paid under the insured’s policy is the highest limit on any vehicle for which they are the named insured or family member.
3. UM does not apply to the insured while occupying any vehicle owned by the insureds for which UM was not purchased.
4. A person who is injured in an accident while not occupying a motor vehicle may select limits of UM applicable to any vehicle afforded UM to which they are a named insured or family member.
5. Non-stacked coverage must be offered at reduced rates.

The UM law (FS 627.727) requires that insurers annually send a notification to all insureds of their options under the UM law.

Umbrella policies are not required to include UM, but the insurer must offer at least $1,000,000 in limits.

Determination of damages for UM can be achieved through:

1. Agreement
2. Arbitration
3. Suit

Question 250

QUICK REVIEW:

Answer 250

What are the differences between Stacked and Non-Stacked?

Question 251

PART D-DAMAGE TO YOUR AUTO

Answer 251

Covers:

1. Your covered auto
2. Nonowned auto, including their equipment

“Nonowned auto” is a private passenger auto, pickup, van, or trailer that is not owned by or furnished for regular use while being operated or in the care of the named insured or family member.

Two Part D coverages:
I. Collision
2. Other Than Collision

“Collision” is the upset (simple rollover) or impact with another object

Other Than Collision-FEW TRAVEL:

1. Falling objects, Fire
2. Earthquake
3. Windstorm, Water, Hail, Flood
4. Theft, Glass
5. Riot, Civil Commotion, Missiles
6. Animal/Bird Collision
7. Vandalism
8. Explosion
9. Larceny

“Other Than Collision” covers all direct and accidental losses not covered by collision except as excluded. Part D includes Transportation Expenses to Your Covered Auto or loss of use to a Nonowned Auto.
Transportation Expenses state:
1. $20 per day/$600 maximum
2. 24 or 48 (total theft) hour waiting period
3. No Deductible
4. Benefit begins 24 hours after loss and ends when vehicle is returned or company pays for loss

» Example: John’s vehicle is stolen on August 5. The vehicle was found and returned to the insured on August 29. John had rented a car at $20 per day. The insurer will pay John 23 days of rental (August 5 and 6 are within the 48-hour waiting period).

Part D Exclusions-MTWTFSS + CCN:

1. Mechanical Breakdown
2. Tires, road damage, racing and transportation for hire
3. Wear and tear, war and nuclear
4. Iapes, records, etc.
5. freezing, fancy fixtures, fuzz buster
6. Sound reproducing equipment.
   a. Permanently installed
   b. $1,000 limit for non-factory installed items
7. Seizure by the government

PLUS

8. Camper body/trailer not on the declaration page
9. Custom furnishings on pickup/van and awnings and cabanas
10. Nonowned auto in the auto business
    How Losses Are Paid:
11. Lesser of ACY or cost to repair or replace
12. $I ,500 for any nonowned trailer

Question 252

PART E & F-OTHER PROVISIONS

Answer 252

Part E Duties after loss imparts the responsibilities on the insured after a loss or accident. Duties include:

1. Prompt notice
2. Forwarding legal papers
3. Cooperation
4. Submit to physical exam
5. Proof of loss

If it is an Uninsured Motorist loss, then all the above apply and report it to the police.
(D Remember: The Insurance Policy is a conditional contract. If the insured does not comply with the contract conditions, the insurer is not obligated to pay.

Part F are General Provisions.

The policy territory includes:

1. U.S.
2. Canada
3. Puerto Rico
4. U.S. territories and possessions

Question 253

ENDORSEMENTS

Answer 253

“Extended nonowned Coverage” is for a nonowned auto which is furnished or available for the regular use of the insured. (Liability and optional Medical is added with the endorsement.)

“Towing and Labor” covers for towing and costs of labor performed at the place of disablement for up to $25, $50, $75, and $100 per disablement.

“Coverage for Excluded Equipment” covers tapes, records, and discs up to $200. Other customized equipment for pickup and vans for specified amounts.

“Named Nonowner Coverage” provides Liability, Medical, and UM for those who do not own an auto.

“Miscellaneous Type Vehicle” covers motor homes, motorcycles, golf carts, and all-terrain vehicles.

“Joint Ownership Coverage” covers individuals residing together.

“Increase Limits of Transportation Expense” increase the $20/$600 to any limit selected by insured.

“Extended PIP”increase medical to 100% and Work Loss to 8%. The max remains$10,000.

“Additional PIP”is only available if Extended PIP is purchased. The endorsement is fornamed insured and family members only and increases the amounts to $10,000, $25,000, $40,000, and $90,000.

Question 254

RATING

Answer 254

The standard rating plan by insurance companies use:

1. Territory
2. Age
3. Sex
4. Marital status
5. Use of vehicle
6. Driving record

Discounts are given for the following:

1. Multi-cars
2. Good grades
3. Defensive Driving course
4. Antilock brakes
5. Anti-theft
6. Safe driver

Question 255

MISCELLANEOUS FLORIDA AUTOMOBILE LAWS

Answer 255

Cancellation/Nonrenewal

First 60 days when PAP provides mandatory PIP and PD:

1. Insurance Company: any reason except discrimination.
2. Insured: limited reasons such as total destruction, purchasing with insurer, or selling vehicle.

After 60 days, a 45-day notice for cancellation or nonrenewal EXCEPT 10 days for non-payment.

If insured cancels an auto policy, the insurer must return unearned premium within 30 days.

Information Disclosure to Claimants

Florida law requires the insurer to disclose full policy information to a claimant within 30 days upon a written request.
Glass Breakage

There is no deductible for windshield glass breakage per F.S. 627.7288.

Question 256

MECHANICAL BREAKDOWN

Answer 256

Coverage is similar to an extended warranty coverage.

Some policies cover rentals for up to $15 day with a maximum of $75.

Exclusions:

1. Lack of maintenance
2. Fire, theft, or collision
3. Odometer tampering
4. Towing
5. Seals or gaskets
6. Tune-ups
7. Racing
8. Towing trailer
9. Public/Livery

Policy Term:

1. New car: 36 months, 36,000 miles
2. Used car: 12 months, 12,000 miles

Question 257

Name the three triggers of the Financial Responsibility Law.

Answer 257

Operation of the law is triggered by an accident which involves: bodily injury; or property as drivingunder the influence and committing a felony with a motor vehicle.

Question 258

The financial responsibility law includes and drivers.

Answer 258

Residents and nonresidents.

Question 259

What are the minimum limits that an insured must carry?

Answer 259

10/20/10.

Question 260

David has just caused an accident driving his uninsured vehicle. The accident injured the driver of the vehicle David hit. What must David do to avoid penalties for not complying with Florida’s Financial Responsibility Law?

Answer 260

If financial responsibility did not exist at the time of the accident, two things must happen to avoid penalties:

(1) the legally valid claims of others must be satisfied (up to the 10/20/10 requirements) and (2)the owner and operator must provide certification of financial responsibility for future accidents.

Question 261

David could not show proof of the accident he caused. What penalties does David now face?

Answer 261

Driver’s license and registration are suspended.

Question 262

Name the type of policy required if an operator of a vehicle does not own a vehicle.

Answer 262

Named Nonowner Policy.

Question 263

Jim has been found guilty of a DUI. Jim is required to carry what limits?

Answer 263

100/300/50

Question 264

Who administers the Financial Responsibility Law?

Answer 264

The Department of Highway Safety and Motor Vehicles

Question 265

What is the required filing an insurer must make to prove coverage is in effect?

Answer 265

Form SR-22

Question 266

How long must the SR-22 certification remain on file?

Answer 266

Three years

Question 267

If the insured ever terminates his proof of coverage, the insured is then subject to what?

Answer 267

If the coverage is terminated within that time, a notice of cancellation must be filed and the person againbecomes subject to license/registration suspension.

Question 268

What happens when an insured drives to another state with different minimum limits?

Answer 268

The Personal Auto Policy provides limits afforded will meet the minimum requirements of law in other states.

Question 269

What are the main elements of the No-Fault Law?

Answer 269

Those who are subject to the law, and comply with the law, are not subject to legal liability for causing bodily injuries to others, regardless of fault (subject to exceptions). As one may not be able to seck legal liability damages against another for bodily injuries, the law substitutes, under one’s own insurance, a coverage named “Personal Injury Protection’ (PIP). This coverage provides first party benefits for economic loss, without regard to fault.

The law requires that PIP insurance be carried by the owners of motor vehicles, and imposes penalties for failing to do so.

Question 270

No-Fault applies to bodily injury. It does not apply to ______

Answer 270

property damage

Question 271

Define “motor vehicle” under the No-Fault Law.

Answer 271

Includes all self-propelled vehicles with four or more wheels which are of a type both designed and required to be licensed for use on Florida highways, and trailers and semitrailers designed for use with such vehicles.

Question 272

What vehicles are specifically exempted from the No-Fault Law?

Answer 272

Specifically exempted from the law are mobile homes, and governmentally owned vehicles used in mass transit if designed to transport more than five passengers. Additionally, while taxicabs, limousines, and public school buses are defined “motor vehicles’ for payment of PIP benefits, they are specifically exempted from the requirement to carry the no-fault coverage

Question 273

Define “owner” under the No-Fault Law.

Answer 273

One who holds legal title, a debtor in possession, one who leases (lessee) with an option to purchase, and other lessees under agreement of six months or more when lessor and lessee agree that the lessee will be treated as the owner.

Question 274

When must evidence of insurance be provided?

Answer 274

At the time the automobile must be registered each year.

Question 275

What can substitute for evidence of insurance?

Answer 275

Substitutes for insurance (cash, bonds, and qualified self-insurance) are permitted.

Question 276

Nonresidents are subject to the law if any defined motor vehicle has been physically present in Florida for more than____ days preceeding ____ days.

Answer 276

90 of the preceding 365 days.

Question 277

Name three penalties for noncompliance with the No-Fault Law.

Answer 277

(1) the owner is denied the immunities from legal liabilities that are granted to those who comply;
(2) the owner is personally liable for payment of PIP benefits to those entitled to such benefits;
(3) the owner’s driver’s license and vehicle registration are subject to suspension, as under the Financial Responsibility Law

Question 278

Name the four categories of benefits for Personal Injury Protection and the percentage each category will pay.

Answer 278

(1) medical 80% (2) work loss 60%, (3) replacement services 100% and (4) death $5,000.

Question 279

How much can an Extended PIP endorsement increase benefits?

Answer 279

An Extended PIP endorsement can be purchased that increases benefits for medical reimbursement from 80% to 100% and from 60% to 80% for income loss. These extensions apply only for the named insured and family members.

Question 280

What is the required limit for PIP benefits?

Answer 280

The required limit for the total package of PIP benefits is $10,000 per person. Effective January 1, 2013 an individual who is not diagnosed with an emergency medical condition, the PIP medical limit is $2,500.

Question 281

How much can an Additional PIP endorsement increase limits?

Answer 281

An Additional PIP endorsement increases this $10,000 limit by amounts such as $10,000, $25.000, S40,000 and s90,000. These increases do not affect the $5,000 death benefit limit. As in Extended Pl? the increased limit applies only to the named insured and family members.

Question 282

PIP is primary coverage for all other forms of medical and disability insurance
except___________benefits.

Answer 282

Workers’ Compensation benefits.

Question 283

Who is entitled to PIP benefits in Florida and outside Florida?

Answer 283

** Injuries to named insured:**

If the accident occurs in Florida, while occupying any defined motor vehicle, or if struck by a
defined motor vehicle while not occupying any self-propelled vehicle.

If the accident occurs outside Florida, while occupying the insured motor vehicle or a vehicle
owned by a resident relative, if it is insured for PIP

Injuries to relatives of named insured who reside with named insured:
Same as for named insured, except as to accidents outside Florida, the named insured’s
benefits apply to the relative only when the relative is occupying the named insured’s “motor
vehicle”

Persons other than named insured and relatives:
If the person is not an owner of a motor vehicle, or entitled to benefits from another owner’s
insurer, and if the accident occurs in Florida, the owner’s benefits are payable to such persons
(1) while occupying the named insured’s motor vehicle or (2) if the person is a Florida
resident, if struck by the insured’s motor vehicle while not occupying a self- propelled vehicle
(i.e., while a pedestrian).

An analysis of person’s entitlement to PIP benefits reveals the general approach intended
by the law: (1) One who owns a motor vehicle is expected to fund PIP for oneself and all
residing family members provided the family members are not themselves owners of a
motor vehicle (rather than looking to others who may have caused injury); (2) those who do
not own motor vehicdes or belong to a family which owns a motor vehicle are entitled to the
PIP benefits of the owner of the motor vehicle they were occupying or by which they were
struck.

In those situations wherein PIP does not apply -named insured and relatives occupying or
struck by others vehicles out-of-state; nonresident passengers out-of-state; nonresidents as
pedestrians in Florida - the No- Fault Law has no applicability and usual legal remedies and
other insurance coverages are to be relied upon

Question 284

Name the exclusions under which PIP benefits are denied.

Answer 284

1. Named insureds and relatives are not covered while occupying a motor vehicle owned by the insured and not covered under the insured’s policy. In other words, one cannot own two automobiles, insure only one for PIP, and receive benefits when injured in the other one.
2. 2. Persons operating the insured’s automobile without the insured’s consent are excluded.
3. There is no coverage for persons who intentionally inflict self-injury or who are injured during the commission of a felony.

Question 285

How does one “pierce the threshold”?

Answer 285

An action for pain, suffering, mental anguish and inconvenience may be brought if the injury results in (1) significant and permanent loss of a bodily function, or (2) permanent injury other than scarring and dishgurement, or (3) significant and permanent scarring or disfigurement, or (4) death.

Question 286

The tort exemption under No-Fault is tied to the ______________________?

Answer 286

Vehicle not the person.

Question 287

The person who is granted tort exemption is immune from suit for noneconomic loss such as pain and suffering unless there is_______________ .

Answer 287

A permanent injury or one of the other specific elements of the threshold

Question 288

Who is eligible for the PAP policy?

Answer 288

Eligibility rules provide for issuance only to an individual, or related persons, or unrelated persons who reside together.

Question 289

What types of vehicles are eligible for the PAP policy?

Answer 289

Eligible types are a private passenger auto and a pickup or van that has a Gross Vehicle Weight ofless than I 0,000 pounds and is not used to deliver or transport goods or materials, except for those incidental to the insured’s business of furniture or equipment installation, maintenance or repair, or for farming or ranching.

Question 290

Name all the sections to the PAP policy.

Answer 290

Declarations
Agreement and Definitions
Part A-Liability Coverage
Part B-Medical Payments Coverage
Part C-Uninsured Motorists Coverage
Part D-Damage to Your Auto
Part E-Duties After an Accident or Loss
Part F-General Provisions
No-Fault Personal Injury Protection (PIP) coverage is added by endorsement.

Question 291

How do the PAP Declarations define a loss payee?

Answer 291

A loss payee is one who has an interest in a vehicle, such as a lender with a security interest, and the naming of a loss payee means any losses under Part D will be payable jointly to the named insured and the loss payee.

Question 292

How does the PAP define “occupying”?

Answer 292

“Occupying” means in, upon, getting in, on, out or off.

Question 293

How does the PAP define “your covered auto”?

Answer 293

“Your covered auto” means:
1. Any vehicle shown in the Declarations.
2. A “newly acquired auto:’
3. Any “trailer” you own.

Question 294

What reasons would make an auto or trailer a temporary substitute?

Answer 294

Any auto or “trailer” you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its:
a. Breakdown;
b. Repair;
c. Servicing;
d. Loss; or
e. Destruction.

Question 295

How long does the insured have to insure the “newly acquired auto” and what coverage will the new auto have?

Answer 295

Coverage for a “newly acquired auto” is provided as described below. If you ask us to insure a “newly acquired auto” after a specified time period described below has elapsed, any coverage we provide for a “newly acquired auto” will begin at the time you request the coverage. For any coverage provided in this policy except Coverage For Damage To Your Auto, a “newly acquired auto” will have the broadest coverage we now provide for any vehicle shown in the Declarations. Coverage begins on the date you become the owner. However, for this coverage to apply to a “newly acquired auto” which is in addition to any vehicle shown in the Declarations, you must ask us to insure it within 14 days after you become the owner.

Question 296

How is coverage provided for a replacement vehicle?

Answer 296

If a “newly acquired auto” replaces a vehicle shown in the Declarations, coverage is provided for this vehicle without your having to ask us to insure it.

Question 297

How does Collision and Other Than Collision apply to “newly acquired autos”?

Answer 297

Collision Coverage for a “newly acquired auto” begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within:

1. 14 days after you become the owner if the Declarations indicate that Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations.
2. Four days after you become the owner if the Declarations do not indicate that Collision Coverage applies to at least one auto. If you comply with the 4 day requirement and a loss occurred before you asked us to insure the “newly acquired auto;’ a Collision deductible of $500 will apply.

Other Than Collision Coverage for a “newly acquired auto” begins on the date you become the owner. However, for this coverage to apply, you must ask us to insme it within:

1. 14 days after you become the owner if the Declarations indicate that Other Than Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations.
2. Four days after you become owner if the Declarations do not indicate that Other Than Collision Coverage applies to at least one auto. If you comply with the 4 day requirement and a loss occurred before you asked us to insure the “newly acquired auto;’ an Other Than Collision deductible of $500 will apply.

Question 298

What will auto liability pay for?

Answer 298

To pay on behalf of the insured money damages for which the insured becomes legally liable to others for bodily injuries or property damages. Also included is defense against claims or suits for such liabilities

Question 299

What triggers payment of Part A-Liability?

Answer 299

To trigger payment, the legal liability must be for “bodily injury or property damage”

Question 300

Define Bodily Injury and Property Damage under Part A.

Answer 300

Bodily injury is generally defined as physical harm, sickness or disease, or death resulting from any of these. Property damage means physical injury to tangible property, incuding loss of use of such property.

Question 301

What are the supplementary payments under Part A-Liability?

Answer 301

Interest accruing after judgments, premiums for appeal bonds and bonds to release attachments. In addition, the company must pay for the cost of bail bonds, up to $250, which are required of the insured because of accidents including related traffic law violations, and up to $200 per day for the insured’s loss of earnings because of attendance at trials or hearings at the insurer’s request.

Question 302

Coverage for defense against claims ceases when

Answer 302

Coverage no longer exists and the policy limits have been exhausted

Question 303

Who is insured under Part A-Liability?

Answer 303

1. The named insured and family members for the ownership, maintenance or use of any auto or trailer.
2. Any person using “your covered auto”
3. Anyone legally responsible for “your covered auto,” but only for acts or omissions of one who is otherwise an insured.
4. For any auto or trailer other than “your covered auto?” anyone else who does not own or hire the vehicle, if liability is from an act or omission of the named insured or a family membe

Question 304

What are the exclusions not provided to any insured under Part A?

Answer 304

Liability coverage is not provided to any insured:
1. Who intentionally causes injury or damage.
2. For damage to property owned or being transported by that insured.
3. Except for damage to a residence or private garage, for damage to property rented to, used by or in the care of that insured.
4. For injury to an employee in the course of employment (but the exclusion does not apply to domestic employees not covered by workers’ compensation).
5. For an insured’s liability arising from use of a vehicle as a public or livery conveyance. This does not include share-the-expense car pools.
6. While employed or engaged ina business ofselling, repairing, servicing, storing or parking vehicles. The exclusion does not apply to the named insured, a family member, or a partner, agent or employee of the named insured or a family member, for use of a “your covered auto?”
7. Except as to a private passenger auto, pickup or van, or a trailer used with any of these, for using any vehicle in a business other than farming or ranching or as described in #6.
8. Using a vehicle without a reasonable belief of permission.
9. For bodily injury or property damage for which that insured is an insured under a nuclear energy liability policy to the named insured or a family member.

Question 305

What vehicles are excluded under Part A?

Answer 305

Vehicles for which Liability coverage is not afforded include the following:
1. Any vehicle with less than four wheels, or designed mainly for use off public (unless vehicle is a trailer, or being used in a medical emergency) roads.
2. A vehicle owned by or furnished or available for the regular use of the named insured, other than your covered auto.”
3. A vehicle owned by or furnished or available for the regular use of a family member, other than “your covered auto? But this exclusion does not apply while the named insured or resident spouse is maintaining or occupying sucha vehicle.
4. Any vehicle located inside a facility designed for racing, for the purpose of competing in or
practicing/ preparing tor any prearranged or organized racing or speed contest.

Question 306

Auto liability limits are issued on either two bases: ________________ or ___________________.

Answer 306

Single limit or split limits.

Question 307

What does each number represent in split liability limits? For example use 10/20/10.

Answer 307

Split limits means three separate limits apply: one for each person injured, another for the claims of all persons injured in one accident, and another for all property damage in one accident.

Question 308

Vehicles owned by the insured apply as _________________. coverage. If a vehicle is not owned by the insured, coverage is ____________________.

Answer 308

Primary coverage; excess over other coverages available.

Question 309

What expenses does Part B-Medical Payments pay for?

Answer 309

Incurred for necessary medical and funeral services to persons injured by accident. Payments are without regard to fault or legal liabilities.

Question 310

Who is insured under Part B?

Answer 310

1. The named insured and family members, while occupying, or as a pedestrian if struck by, any motor vehicle designed for use mainly on public roads or any type of trailer equipment
2. Other persons while occupying a “your covered auto”

Question 311

Name the exclusions under Part B.

Answer 311

1. While occupying a motorized vehicle with less than four wheels.
2. While using the “your covered auto” as a public or livery vehicle (carpooling excepted).
3. If workers’ compensation benefits are payable.
4. While occupying an auto, other than a “your covered auto,’ which is owned by or furnished or available for the regular use of the named insured, spouse, or a family member (except the named insured or resident spouse is not excluded while occupying such an automobile of a family member).
5. While occupying a vehicle without reasonable belief of permission.
6. While occupying an auto for business purposes, other than a private passenger auto, pickup or van, or trailer used with one of these.
7. While occupying any vehicle, located inside a facility designed for racing, for the purpose of
   competing in or practicing/preparing for any prearranged or organized racing or speed contest

Question 312

What other coverages reduce the amount paid under Part B?

Answer 312

Any amount payable for Medical Payments coverage is reduced by any amounts payable for the same expense under Liability, PIP or Uninsured Motorists coverages

Question 313

Medical limits apply _______________?

Answer 313

per person

Question 314

What does the UM coverage pay for?

Answer 314

Pay for compensatory damages for bodily injuries, under ones own policy, for amounts which would otherwise have been recovered from the liability insurance of another- either an uninsured motorist, or one who carries liability limits that are lower than the insured’s damages

Question 315

Who is insured under the UM coverage?

Answer 315

The law is not entirely specific about who is subject to UM benefits under an insured’s policy. Generally, however, coverage applies to the named insured and family members in their own vehicles, in any other vehicle, and as pedestrians. Other persons are covered while occupying the named insured’s vehicle.

Question 316

In order for UM to respond, the injury must be caused by what?

Answer 316

The injury must be caused by a vehicle that does not have liability insurance (or its equivalent, such as qualifed self-insurance) or liability insurance with a limit that is lower than the insured’s damages. In addition, coverage applies if the other party’s liability insurer is insolvent or if the other vehicle is a “hit-and-run’ (and thus cannot be identified)

Question 317

UM damages do not pay for___ or ____damages.

Answer 317

Punitive or exemplary damages.

Question 318

How are UM limits offered?

Answer 318

Limits of coverage are offered in the same way as auto Liability coverage. There may be a single limit, the minimum being $20,000 per accident, or there may be split limits with a minimum of $10,000 per person, $20,000 per accident (10/20). Any higher limits are permissible

Question 319

The law states that every policy with Liability coverage must include “stacked” coverage at the same limits as Liability unless the insured, in writing, does what three things?

Answer 319

(1) Rejects UM coverage, or
(2) elects UM coverage at limits lower than those that apply for Liability, or
(3) elects “Non-stacked” UM coverage

Question 320

Define “stacked” coverage

Answer 320

“Stacked” coverage means the coverage limits provided for two or more vehicles are added together in determining the limit of insurance coverage available to an injured person in any one accident.

Question 321

Describe how “non-stacked” differs from “stacked:

Answer 321

1. The coverage available to a person injured while occupying a motor vehicle is only the limit
   applicable to that motor vehicle.
2. An injured person is entitled to the highest limits of UM coverage that apply to any vehicle for which he or she is a named insured or family member, if the injured person is occupying a motor vehicle that he or she does not own or that is not owned by a member of his or her family who resides in the same household. This coverage is excess over coverage on the vehicle the injured person is occupying.
3. UM coverage does not apply to an insured injured while occupying any vehicle owned by insureds for which no UM coverage was purchased under this policy.
4. A family member is not insured for UM coverage while occupying any vehicle owned by the named insured which is insured on a primary basis under another policy. The UM available would be the amount of coverage on that particular vehicle.
5. A person who is injured in an accident while not occupying a motor vehicle may select the limit of UM coverage that is applicable to any vehicle afforded UM coverage by a policy under which he or she is a named insured or insured resident of the named insured’s household.
6. “Non-stacked” coverage must be offered at reduced rates. If the insured or applicant signs a department approved form, there is presumed to be informed, knowing acceptance of the limitations in coverage. The signing of the form by the named insured, whether it’s a selection or rejection, is assumed for all insureds.

Question 322

What does the UM law require insurers send annually to the insured?

Answer 322

The UM Law also requires that insurers send at least annually, and “attached to the notice of premium,” a notification to insureds of all options available to them under the law and provide them a means to respond

Question 323

How are determinations of damages achieved?

Answer 323

Determination of damages may be achieved through (1) agreement between the insured and the UMM insurer, or (2) arbitration proceedings between the insured and the UM insurer, or (3) if the insurer refuses to arbitrate, by suit jointly against the other party and the UM insurer.

Question 324

Under Part D, the company agrees to pay for direct and accidental loss to or to any including their equipment

Answer 324

A your covered car or to any nonowned auto

Question 325

Define “nonowned auto” under Part D.

Answer 325

A “nonowned auto” (not included in the policy’s general definitions section) is defined as a private passenger auto, pickup, van or trailer not owned by or furnished or available for the regular use of the named insured or a family member, while being operated or in the care of the named insured or a family member.

Question 326

Name the two coverages under Part D.

Answer 326

Other than collision and Collision

Question 327

Define collision

Answer 327

Collision means upset or impact with another object

Question 328

Name the perils under Other Than Collision

Answer 328

Missiles, falling objects, fire, theft, larceny, explosion, earthquake, windstorm, hail, water, flood, vandalism, riot, civil commotion, contact with bird or animal, breakage of glass.

Question 329

What are the transportation limits? When do the benefits begin? When do they end?

Answer 329

The company agrees to pay up to $20 per day, to a maximum of $600, for (1) transportation expenses incurred because of covered loss to a “your covered auto” or (2) loss of use expenses incurred because of a covered loss to a “nonowned auto’ A deductible does not apply. The benefit begins 24 hours after a loss. (Exception: 48 hour waiting period applies if loss is a total theft of a vehicle.) Coverage ends when your covered auto” or the “nonowned auto” is returned to use or the company pays for its loss

Question 330

List Part D exclusions for owned vehicles.

Answer 330

1. Electronic equipment designed for the reproduction of sound, including but not limited to radios, stereos, tape decks, citizens band radios, telephones, two-way mobile radios, scanning monitor receivers, television monitor receivers, video cassette recorders, audio cassette recorders, compact disc systems, navigation systems, Internet access systems and personal computers. However, coverage is provided if such equipment is: permanently installed in the auto. A limit of S1,000 applies for permanently installed equipment located in a spot not designed by the manufacturer for such equipment.
2. Tapes, records, discs, other media or any other accessories used with equipment described above.
3. A “your covered auto” or any “nonowned auto” that is destroyed or confiscated by governmental or civil authorities.
4. A camper body or trailer not shown in the declarations (coverage applies to those acquired during the policy period, if vehicle reported to carrier within 14 days of purchase).
5. Awnings or cabanas or equipment designed to create additional living facilities.
6. Equipment designed or used for the detection or location of radar (“fuzz buster”) or laser.
7. Custom furnishings or equipment in a pickup or van, including but not limited to special carpeting and insulation, furniture, bars, cooking and sleeping facilities, height-extending roofs, and custom murals, paintings, decals and graphics.

Question 331

List Part exclusions for nonowned vehicles.

Answer 331

As to nonowned autos only, there is no coverage for those associated with the business of selling, repairing, servicing, storing or parking of vehicles; use in other business except for a private passenger auto or trailer by the named insured or a family member; using without reasonable belief there is permission; or loss to a rented vehicle if the rental agreement provides the named insured or family member is not liable.

Question 332

What are the exclusions for both owned and nonowned vehicles?

Answer 332

Coverage also excludes use of a “your covered auto” or any “nonowned auto’” as a public or livery conveyance (carpooling excepted), or (while located inside a facility designed for racing) for competing in or practicing for any prearranged or organized racing or speed contests

Question 333

How are losses paid under Part D?

Answer 333

Part D’s limit of liability provision calls for payment of the lesser of actual cash value or the cost to repair or replace, and a special limit of $1,500 applies to any nonowned auto that is a trailer.

Question 334

List the various responsibilities under Part E.

Answer 334

Prompt notice and forwarding of legal papers, cooperation, submission to physical exams and to examination under oath, provide proof of loss, report to police if it is a UM hit-and-run claim or theft claim, protect against further loss, allow inspection and appraisal of damage before repair or disposal all are required,depending upon the type of claim, to enable the company to properly process the claim.

Question 335

When may an insurer cancel during the first 60 days?

Answer 335

During the first 60 days of a new policy, ES. 627.728 states an insurer may cancel for any reason except discrimination with respect to race, colo, national origin, creed, marital status, or sex. Unless there is a reasonable relationship between such characteristic and the coverage being issued, cancellation is also prohibited based upon residence, age, lawful occupation of the individual, or location of the risk. For policies providing mandatory PIP and property damage liability, F.S. 627.7295 prohibits cancellation:
(1) by the insurer for nonpayment of premium unless payment was made by a dishonored check or the insured failed to respond to a valid notice of additional premium.

Question 336

When may an insurer cancel after the first 60 days?

Answer 336

After 60 days, an insurer may cancel only for nonpayment of premium, material misrepresentation or fraud, or suspension or revocation of the drivers license or registration of an operator during the policy term or within the previous 180 days

Question 337

Insurer must give______ days’ written notice to cancel, except______ days for nonpayment of the premium.

Answer 337

45 days; 10 days

Question 338

What is the deductible for windshield glass breakage?

Answer 338

No deductable

Question 339

What is the purpose of Mechanical Breakdown Insurance?

Answer 339

To provide coverage against the failure of an original or replacement part, when properly cleaned or serviced, to perform any function for which it was designed.

Question 340

What is the rental reimbursement provision?

Answer 340

Some policies have a rental reimbursement provision, paying up to $15 per day, up t0 a maximum of $75, for a substitute vehicle during the period of repair.

Question 341

How is the deductible handled under Mechanical Breakdown?

Answer 341

Coverage is subject to a deductible which is subtracted from the cost incurred to remedy each breakdown per assembly. A single deductible applies if more than one covered part is involved in the same breakdown

Question 342

What is the policy term and territory?

Answer 342

Generally, the policy term is 36 months after delivery or 36,000 miles, whichever comes first, for new cars, and 12 months or 12,000 miles for used cars. The policy territory, within which the breakdown must occur during the policy period, is usually the United States, its territories or possessions, and Canada

Question 343

3.1 FINANCIAL RESPONSIBILITY

Answer 343

3.1 FINANCIAL RESPONSIBILITY
Any analysis of auto liability insurance should include an understanding of the Florida Financial Responsibility Law. Chapter 324, §324.011 F.S., Purpose of the Law, states:

Question 344

3.1 FINANCIAL RESPONSIBILITY

Answer 344

3.1 FINANCIAL RESPONSIBILITY
It is the intent of this unit to recognize the existing privilege to own or operate a motor vehicle on the public streets and highways of this state when such vehicles
are used with due consideration for others and their property, and to promote safety and provide. Financial security requirements for such owners or operators whose
responsibility is to recompense others far injury to person or property caused by the operation of a motor vehicle. 1herefore, it is required herein that the operator of a motor vehicle involved in an accident or convicted of certain traffic offenses meeting the operative provisions of §324.051(2) shall respond for such damages and show proof of .financial ability to respond far damages in future accidents as a requisite to his or her future exercise of such privileges.

The unit continues with specifics on the conditions under which financial responsibility must be shown, the amount of responsibility, and penalties for failure to comply.

Question 345

3.1 FINANCIAL RESPONSIBILITY

Answer 345

Operation of the law is triggered by an accident that involves: bodily injury; property damage when a vehicle is rendered inoperative; or certain serious traffic violations, such as driving under the influence and committing a felony with a motor vehicle.

Question 346

3.1 FINANCIAL RESPONSIBILITY

Answer 346

3.1 FINANCIAL RESPONSIBILITY
If, at the time of the occurrence, there is auto liability insurance in effect with limits of not less than Sl0,000 per person and $20,000 per incident for bodily injury and 10,000 per incident for property damage (10/20/10), the law’s requirements are satisfied. Alternate ways that satisfy the law include being a qualified self-insurer or obtaining a certificate of deposit in the amount of
$30,000 cash that guarantees responsibility for the 10/20/10 limits.
If financial responsibility did not exist at the time of the accident, two things must happen to avoid penalties:
1. the legally valid claims of others must be satisfied (up to the 10/20/10 requirements), and
2. the owner and operator must provide certification of financial responsibility for future accidents.
If these two requirements are not satisfied, the driver’s license of the operator, and the registrations of all vehicles of the owner are suspended.
The first requirement may be satisfied by the owner or operator securing and filing a release from liability by all injured parties, the owner or operator being finally adjudicated not liable by a court, or the owner or operator depositing cash in an amount sufficient to compensate for all injuries in the accident (up to the equivalent of 10/20/10).

Question 347

3.1 FINANCIAL RESPONSIBILITY

Answer 347

3.1 FINANCIAL RESPONSIBILITY
Persons found guilty of driving under the influence (DUI) must purchase limits of 100/300/50 or post a bond in the amount of $350,000 for a minimum period of three years. If the person has not been found guilty of a DUI or felony traffic offense during the three-year period, he or she is allowed to return to the standard coverage limits. Additionally, those directed to maintain higher limits are required to keep proper proof of insurance in his or her possession at all times.
As to required proof for future accidents by purchase of auto liability insurance, the insurer must make a filing (Form “SR-22”) certifying that coverage is in effect, and this certification must remain on file for three years. If the coverage is terminated within that time, a notice of cancellation must be filed and the person again becomes subject to license/registration suspension.

Question 348

3.1 FINANCIAL RESPONSIBILITY

Answer 348

3.1 FINANCIAL RESPONSIBILITY

When an operator who does not own an automobile needs a SR-22 filing, a form of coverage known as a Named Nonowner policy is required.111is form of policy covers only while the insured is operating automobiles owned by others.

Question 349

3.1 FINANCIAL RESPONSIBILITY

Answer 349

3.1 FINANCIAL RESPONSIBILITY
Nonresidents are subject to the Florida’s Financial Responsibility (FR) Law, their operating privileges being suspended in Florida if they do not comply. Under reciprocal arrangements with other states, when an uninsured Florida resident has an accident in another state that would have resulted in license/registration suspension had the accident occurred in Florida, the resident is subject to the same enforcement as though the accident had happened in Florida.

Question 350

3.1 FINANCIAL RESPONSIBILITY

Answer 350

3.1 FINANCIAL RESPONSIBILITY
When an owner becomes subject to vehicle registration suspension, it is unlawful to transfer the registration to another person for the purpose of circumventing the intent of the law.

Question 351

3.1 FINANCIAL RESPONSIBILITY

Answer 351

Violations of the law, such as making misstatements, committing forgery, or filing false affidavits, are punish­ able as second-degree misdemeanors.

Question 352

3.1 FINANCIAL RESPONSIBILITY

Answer 352

The FR law is administered by the Florida Department of Highway Safety and Motor Vehicles.

Question 353

3.1 FINANCIAL RESPONSIBILITY

Answer 353

3.1 FINANCIAL RESPONSIBILITY
The Personal Auto Policy, as well as other standard policies, provides that limits afforded will meet the minimum requirements of law in other states. Thus, for example, a Florida insured with limits of 10/20/10 may be in a state that requires 25/50/10; the policy will be interpreted as affording such limits under those conditions wherein it is required of the insured.

Question 354

3.2 NO-FAULT

Answer 354

Currently, there are about a dozen states that have “no-fault” laws of one type or another. These laws, no two of which are identical, attempt to remove certain claims from the tort liability system and to substitute a system of benefits payable by one’s own insurer. In most (if not all) instances, the primary impetus was to contain rising costs of Auto Liability insurance.
The Florida No-Fault Motor Vehicle Law, F.S.627.730- 627.7405, is the subject of this section.

Question 355

3.2 NO-FAULT
Elements

Answer 355

3.2 NO-FAULT
Elements
The main elements of the Florida law include:

1. Those who are subject to and comply with the law are not subject to legal liability for causing bodily injuries to others, regardless of fault (subject to important exceptions, discussed below).
2. As one may not be able to seek legal liability dam­ ages against another for bodily injuries, the law substitutes, under one’s own insurance, a coverage named “Personal Injury Protection” (PIP).This coverage provides first-party benefits for economic loss, without regard to fault.
3. 1ne law requires that PIP insurance be carried by the owners of motor vehicles and imposes penalties for failing to do so.

Question 356

3.2 NO-FAULT

Answer 356

An important point: the law has nothing to do with property damage. It applies to bodily injury claims only. In this area, the traditional legal liability system applies.

Question 357

3.2 NO-FAULT
Definitions

Answer 357

3.2 NO-FAULT
Definitions
The law applies to “motor vehicles,” defined to include all self-propelled vehicles with four or more wheels that are of a type both designed and required to be licensed for use on Florida highways, and trailers and semi-trailers designed for use with such vehicles. Specifically exempted from the law are mobile homes and governmentally owned vehicles used in mass transit if designed to trans­ port more than five passengers.
Additionally, while taxicabs, limousines, and pub­ lic-school buses are defined as “motor vehicles” for payment, they are specifically exempted from the require­ ment to carry the no-fault coverage.
This definition is important because it is those who are injured by motor vehicles who are entitled to PIP bene­ fits; it is the owners of motor vehicles who must comply with compulsory insurance requirements; it is those who own, register, operate, or occupy motor vehicles who may be granted exemptions from legal liability to others to the extent that PIP benefits are payable for injuries sustained in an accident.

Question 358

3.2 NO-FAULT

Answer 358

3.2 NO-FAULT

The “owner” of a motor vehicle is required to provide PIP insurance as to such vehicle. An owner is defined as one who holds legal title, a debtor in possession, one who leases (lessee) with an option to purchase, and other lessees under agreement of six months or more when lessor and lessee agree that the lessee will be treated as the owner. Said succinctly, PIP benefits follow the “insured” while tort immunity follows the “motor vehicle.”

Question 359

3.2 NO-FAULT

Answer 359

3.2 NO-FAULT
The means for enforcement of the compulsory insurance requirement is to require that evidence of insurance be provided at the time the automobile must be registered each year. Substitutes for insurance (cash, bonds, and qualified self-insurance) arc permitted.

Question 360

3.2 NO-FAULT

Answer 360

3.2 NO-FAULT

Nonresidentss
Nonresidents, who may not be required to register their vehicles in Florida, are subject to the law if any defined motor vehicle has been physically present in Florida for more than 90 of the preceding 365 days. The 90 days do not have to be consecutive.

Question 361

3.2 NO-FAULT

Penalties

Answer 361

3.2 NO-FAULT

Penalties

There are three penalties for noncompliance with the compulsory insurance requirements: (1) the owner is denied the immunities from legal liabilities that are granted to those who comply; (2) the owner is personally liable for payment of PIP benefits to those entitled to such benefits; (3) the owner’s driver’s license and vehicle registration are subject to suspension, as under (and through the machinery of) the FR law.

Question 362

3.2 NO-FAULT

PIP Benefits

Answer 362

3.2 NO-FAULT

PIP Benefits
Personal Injury Protection coverage has four categories of benefits: (1) medical, (2) work loss, (3) replacement services, and (4) death.
PIP medical benefits pay for 80% of reasonable expenses for (1) all reasonable expenses for necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices; (2) necessary ambulance, hospital, and nursing services; and (3) necessary remedial treatment and services permitted by law for an injured person who relies on spiritual means through prayer alone for healing, in accordance with religious beliefs.
Individuals seeking PIP medical benefits are required to receive initial services and care within 14 days after the motor vehicle accident. Benefits are reimbursable only if provided by a licensed physician, osteopathic physician, chiropractic physician, dentist, or rendered in a hospital or facility that is owned by a hospital, or a licensed emergency transportation and treatment provider. The law also provides a PIP medical benefit of $2,500 for an individual who is not diagnosed with an emergency medical condition.

Question 363

3.2 NO-FAULT

Answer 363

The law states it will not reimburse massage and acupuncture regardless of the type of provider administering the service. Work loss benefits reimburse for 60% of loss of gross income or earning capacity, and 100% of the cost for having household services performed by others, which the injured person would normally have done but for the injury. Currently, the death benefit pays $5,000 and the required limit for the total benefit package is
$10,000. For example, if the PIP coverage has already paid $8,000 in medical benefits, then the injured person dies, there is only $2,000 available to be paid as the death benefit. Effective January 1, 2013, the death benefit will be $5,000 in addition to the $10,000 in medical and disability benefits.
An Extended PIP endorsement can be purchased that increases benefits for medical reimbursement from 80% to 100% and from 60% to 80% for income loss. These extensions apply only for the named insured and family members.
An Additional PIP endorsement increases this $10,000 limit by amounts such as $10,000, $25,000, $40,000 and $90,000.These increases do not affect the $5,000 death benefit limit. As in Extended PIP, the increased limit applies only to the named insured and family members.

Question 364

3.2 NO-FAULT
Other Requirements

Answer 364

3.2 NO-FAULT
Other Requirements

The law requires that certain forms of modified coverage be· offered at the time of original application and at each renewal. First, insureds must be offered deductibles of
$250, $500, and $1,000.111ese deductibles are subtracted from the total medical expense before the percentage of payment is applied for a claim and do not reduce the total $10,000 maximum benefit by the deductible amount.
Insurers must also offer coverage with work loss benefits excluded. In return for excluding work loss benefits, the insured receives a premium reduction. Insureds with no earned income sources, such as retirees who receive Social Security and/or a company pension, are candidates for such reduction in coverage.
Insureds may elect coverage modifications to apply only to themselves, or to themselves and dependent family members. Others who might be eligible for the insured’s PIP benefits are not subjected to the elections.

Question 365

3.2 NO-FAULT
Primary/Excess

Answer 365

3.2 NO-FAULT
Primary/Excess
PIP is primary against all other forms of medical and disability insurance coverages, except workers’ compensation benefits. Florida courts have held PIP is excess over WC. To eliminate duplicate recoveries, the law prohibits persons who have received PIP from recovering the same amounts from others in legal liability actions. Medical Payments coverage is issued on an excess basis to coordinate with PIP coverage. For example, Medical Payments would cover only amounts in excess of the 80% of reasonable expenses covered by PIP.

Question 366

3.2 NO-FAULT
Who Is Covered

Answer 366

3.2 NO-FAULT
Who Is Covered

Persons entitled to the PIP benefits an owner has secured for a specific motor vehicle may be outlined as follows:
1. Injuries to named insured

• If the accident occurs in Florida, while occupying any defined motor vehicle, or if struck by a defined motor vehicle while not occupying any self-propelled vehicle.
• If the accident occurs outside Florida, while occupying the insured motor vehicle or a vehicle owned by a resident relative, if it is insured for PIP.
  2. Injuries to relatives of named insured who reside with named insured
• Same as for named insured, except as to accidents outside Florida, the named insured’s benefits apply to the relative only when the relative is occupying the named insured’s “motor vehicle.”
  3. Persons other than named insured and relatives
• If the person is not an owner of a motor vehicle, or entitled to benefits from another owner’s insurer, and if the accident occurs in Florida, the owner’s benefits are payable to such persons (1) while occupying the named insured’s motor vehicle or
  (2) if the person is a Florida resident, if struck by the insured’s motor vehicle while not occupying a self- propelled vehicle (i.e.., while a pedestrian).

Question 367

3.2 NO-FAULT

Answer 367

3.2 NO-FAULT
An analysis of persons’ entitlement to PIP benefits reveals the general approach intended by the law:
(1) One who owns a motor vehicle is expected to fund PIP for oneself and all residing family members pro­ vided the family members are not themselves owners of a motor vehicle (rather than looking to others who may have caused injury); (2) those who do not own motor vehicles or belong to a family that owns a motor vehicle are entitled to the PIP benefits of the owner of the motor vehicle they were occupying or by which they were struck.
In the situations where PIP does not apply-named insured and relatives occupying or struck by others vehicles out-of-state; nonresident passengers out-of-state; nonresidents as pedestrians in Florida-the No- Fault

Question 368

3.2 NO-FAULT

Answer 368

3.2 NO-FAULT
Law has no applicability and usual legal remedies and other insurance coverages are to be relied upon.

Question 369

3.2 NO-FAULT
Exclusions

Answer 369

3.2 NO-FAULT
Exclusions

There are a limited number of exclusions, under which benefits are denied:
* Named insureds and relatives are not covered while occupying a motor vehicle owned by the insured and not covered under the insured’s policy. In other words, one cannot own two automobiles, insure only one for PIP, and receive benefits when injured in the other one.
* Persons operating the insured’s automobile without the insured’s consent are excluded.
* There is no coverage for persons who intentionally inflict self-injury or who are injured during the commission of a felony.

Question 370

3.2 NO-FAULT

Tort Exemption

Answer 370

3.2 NO-FAULT

Tort Exemption

The final portion of the Florida No-Fault Law that deserves close attention is the “tort exemption.” Bearing in mind that the overall scheme is for families who own motor vehicles to fund for their own injuries (and for injuries to those who don’t own motor vehicles) with­ out regard to fault, those who comply with the law are granted a limited immunity from suits of others through PIP coverage.
Generally summarizing the tort exemption: if a motor vehicle is subject to the law, and there is compliance through insuring for PIP, then anyone legally responsible for bodily injuries arising from that motor vehicle is exempt from legal liability claims, to the extent PIP was paid or payable. Exception: an action for pain, suffering, mental anguish, and inconvenience may be brought if the injury results in (1) significant and permanent loss of a bodily function, (2) permanent injury other than scarring and disfigurement, (3) significant and permanent scarring or disfigurement, or (4) death.
The exceptions allowed for recovery of noneconomic loss are known as the “threshold.” One who falls into one of these categories has “pierced the threshold” and retains rights against others, except for a prohibition against duplicate recoveries.

Question 371

3.2 NO-FAULT

Answer 371

3.2 NO-FAULT

Note the law does not speak of taking away rights; rather it grants an exemption to those who comply and denies an exemption to those who should, but do not, comply.
The exemption is tied to the vehicle rather than the person. Thus, one who owns an uninsured vehicle, in violation of the law, is given the exemption as to operation of an insured vehicle. Correspondingly, one who complies with the law by insuring an owned vehicle is not tort exempt if operating someone else’s uninsured vehicle.
The exemption is “to the extent PIP was paid or payable…” Given the limits of PIP-80% of medical expenses, 60% of income loss, $10,000 maximum-the injured party has a right to legal action against another to the degree that economic loss exceeds these amounts. Under this scheme, no one is denied the right to recover 100% of economic loss from the combination of PIP and legal rights against an at-fault party.
The “paid or payable” wording also means, for example, if an insured motorist injured someone on a motorcycle, there would be no tort exemption, because PIP does not apply to one occupying a self-propelled vehicle that is not a “motor vehicle” as defined. If the insured motorist caused injuries to a motor vehicle owner who had not insured, then PIP is “payable” although not paid by an insurance company, and the insured motorist has the same exemption as though the uninsured motorist had PIP.

Question 372

3.2 NO-FAULT

Answer 372

If the injured person had complied by having PIP, but came under one of the exclusions, the insured motorist’s exemption is the same as if PIP had been fully payable. However, if the injured person had selected a deductible under PIP, then the entire unpaid medical expense can be collected from the at-fault party.
Example: Jill is injured by Martha; who was at fault? Jill had $4,000 in medical bills and had purchased PIP with Sl,000 deductible. Jill recovers $2,400 from her own PIP ($4,000 - Sl,000 x 80%) and has a tort right against Martha for $1,600-the full amount of the eco­ nomic loss.
No matter how great the economic loss-for example,
$50,000 in medical bills-the person who is granted a tort exemption is immune from suit for noneconomic loss such as pain and suffering, unless there is a permanent injury or one of the other specific elements of the threshold.

Question 373

3.3 PERSONAL AUTO POLICY

Answer 373

3.3 PERSONAL AUTO POLICY
The Personal Auto Policy (PAP) offers broad coverage specifically geared for the personal exposure. Eligibility rules provide for issuance only to an individual, or related persons, or unrelated persons who reside together. It may not be issued to a corporation, partnership or other combination of interests.
Eligible types are private passenger auto and a pickup or van that has a Gross Vehicle Weight of less than 10,000 pounds and is not used to deliver or transport goods or materials, except for those incidental to the insured’s business of furniture or equipment installation, maintenance or repair, or farming or ranching. Vehicle types eligible for coverage are restricted to 4-wheel private passenger types, not used for public or livery purposes, and to pickup or van type vehicles not used in any business other than farming or ranching (subject to an exception that permits insuring of other types of personal auto­ motive equipment with restrictive coverage, discussed under Endorsements).
The eligible vehicle may either be owned by the insured, or long-term leased for a period of six months or more.

Question 374

3.3 PERSONAL AUTO POLICY

Answer 374

3.3 PERSONAL AUTO POLICY
The Personal Auto Policy is divided into sections:
* Declarations
* Agreement and Definitions
* Part A-Liability Coverage
* Part B-Medical Payments Coverage
* Part C-Uninsured Motorists Coverage
* Part D-Coverage For Damage To Your Auto
* Part E-Duties After an Accident or Loss
* Part F-General Provisions
No-Fault Personal Injury Protection (PIP) coverage is added by endorsement, as required by Florida Statute. PIP coverage, which applies to other auto policies as well, will be discussed in a later Section.

Question 375

3.4 PAP DECLARATIONS

Answer 375

3.4 PAP DECLARATIONS
PAP Declarations identify the named insured and mailing address; state the policy period; list the coverages that apply and their limits and premiums; and identify “loss payees.”
A loss payee is one who has an interest in a vehicle, such as a lender with a security interest, and the naming of a loss payee means any losses under Part D will be payable jointly to the named insured and the loss payee. This enables a lender to control claim proceeds in a way that insures that its collateral is restored to its prior value after damage, or to be protected for its equity if the vehicle is destroyed.

Question 376

3.5 PAP DEFINITIONS

Answer 376

3.5 PAP DEFINITIONS
In the Definitions section, several terms used in the policy are subject to the precise definitions stated here:
* “you” and “your” refer to the named insured and resident spouse (if any),
* an auto leased for six months or more shall be treated as “owned,”
* “bodily injury” means bodily harm, sickness, or disease and resulting death,
* “property damage” means physical injury to or loss of use of tangible property,
* “business” means trade, profession or occupation,
* “family member” means relatives, wards and foster children in the household of the named insured (but the spouse of a named insured has the status of named insured, even if not named in the Declarations),
* “occupying” means in, upon, getting in, on, out or off,
* “trailer” means a vehicle designed to be pulled by a private passenger auto, pickup, or van; or a farm wagon or farm implement while towed by any such vehicle.

Question 377

3.5 PAP DEFINITIONS

Answer 377

3.5 PAP DEFINITIONS

The most important definition, however, is that for “your covered auto. “There are numerous policy references to this term, but it is well to recognize at this stage that policy coverage is not limited to vehicles that are within the definition.
The PAP defines “your covered auto” as follows:
j. Your covered auto” means:
1. Any vehicle shown in the Declarations.
2. A ‘‘newly acquired auto.”
3. Any “trailer”you own.
4. Any auto or “trailer”you do not own while used as a temporary substitute for any other vehicle described in this definition that is out ofnormal use because ofits:
a. Breakdown,
b. Repair,
c. Servicing,
d. Loss, or
e. Destruction.

(Note: J.4 does not apply to Coverage for Damage to Your Auto.)
K ‘‘Newly acquired auto”:
1. ‘‘Newly acquired auto” means any of the following types ofvehicles you become theowner ofduring the policy period.·

a. A private passenger auto; or

b. A pickup or van, for which no other insurance policy provides coverage, that:
(l}Hasa Gross Vehicle Weight ofless than 10,000 lbs.; and
(2}Is not used far the delivery or transportation of goods and materials unless such use is:
(a) Incidental to your “business” of installing, maintaining or repairing furnishings or equipment; or
(a) For, farming or ranching.

2. Coverage far a “newly acquired auto” is provided as described below. If you ask us to insure a “newly acquired auto” after a specified time period described below has elapsed, any coverage we provide far a “newly acquired auto” will begin at the time you request the coverage.

a. For any coverage provided in this policy except Coverage For Damage To Your Auto, a “newly acquired auto” will have the broadest coverage we now provide for any vehicle shown in the Declarations. Coverage begins on the date you become the owner. However, for this coverage to apply to a “newly acquired auto” which is in addition to any vehicle shown in the
Declarations, you must ask us to insure it within 14 days after you become the owner. If a “newly acquired auto” replaces a vehicle shown in the Declarations, coverage is provided for this vehicle without your having to ask us to insure it.
b. Collision Coverage for a “newly acquired auto” begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within:
(1}14 days after you become the owner if the Declarations indicate that Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations.
(2) Four days after you become the owner if the Declarations do not indicate that Collision Coverage applies to at least one auto. If you comply with the 4-day requirement and a loss occurred before you
asked us to insure the “newly acquired auto, “a Collision deductible of $500 will apply.
c. Other Than Collision Coverage for a “newly acquired auto” begins on the date you become the owner. How­ ever, for this coverage to apply, you must ask us to insure it within:
(1) 14 days after you become the owner if the Declarations indicate that Other Than Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations.
(2) Four days after you become owner if the Declarations do not indicate that Other Than Collision Coverage
applies to at least one auto. If you comply with the
4-day requirement and a loss occurred before you asked us to insure the “newly acquired auto, “an Other Than Collision deductible of $500 will apply.

Coverage l_ Added Vehicle

AcquiredVehicles

Replacement Vehicle

Liability, Medical Payments, UM, PIP

Other Thon Collision

Collision

Must ask to insurwe ithin14 days to receive broadest coverage on any insured vehicle.

If “Other Thon Collision” coverage on any insuredvehicle, must ask to insure within 14 days for the broadest coverage on any insured vehicle to apply.
If NO “Other Than Collision” coverage on any insured vehicle, must ask to insurwe ithin 4 days* for”Other Than Collision” coverage to apply.
If “Collision” coverage on any insuredvehicle, must ask to insure within14 days for the broadest coverage on any insured vehicle to
apply.

Broadest coverage on any insuredvehicle appliews ithout having to ask to insure but onlyfor the remainderof the policy period. Insuredmust report vehicle for coverage to apply at renewal.
If “OtherThon Collision” coverage onanyinsuredvehicle, must ask to insure within 14 days for the broadest coverage on any insured vehicle to apply.
If NO “OtherThan Collision” coverage on any insuredvehicle, must ask to insurwe ithin4 days* for”OtherThan Collision” coverage lo apply.
If “Collision” coverage on any insuredvehicle, must ask to insure within14days for the broadestcoverage on any insuredvehicle to
apply.

If NO “Collision” coverage on any insuredvehiclem,

usl osk to

If NO “Collision” coverage on any insuredvehiclem, ust oskto

insure within 4 days* for “Collision” coverage to apply. insure within 4 days* for “Collision” coverage toapply.

• If 4-day reporting requirement mel and o loss precedes report, $500 deductible applies.

Question 378

3.6 PART A-LIABILITY COVERAGE

Answer 378

3.6 PART A-LIABILITY COVERAGE
The function of auto liability insurance is to pay on behalf of the insured money damages for which the insured becomes legally liable to others for bodily injuries or property damages. Also included is defense against claims or suits for such liabilities.
Please note:
1. The policy protects only those who have the status of”insured,” the definition of which varies by policy form.
2. Payment is only for “legal liability. “Generally, legal liability arises from a negligent act or omission arising out of the ownership, maintenance, or use of an automobile.
3. To trigger payment, the legal liability must be for “bodily injury” or “property damage. “Bodily injury is generally defined as physical harm, sickness or disease, or death resulting from any of these. Claims for bodily injury may be for damages such as medical bills, loss of income, pain and suffering, and other results of the physical harm incurred. Property damage means physical injury to tangible property, including loss of use of such property. Prejudgment interest awarded against the insured in a liability suit is also considered “damages.”
4. When a claim is made against one who is an insured, for ap occurrence wherein there is policy coverage, the insurer “becomes the insured’s defense lawyer.” In other words, if another party files a suit against an insured, the insurer cannot take a hands-off position and simply pay the even­ tual claim. With this duty to defend, the insurer also has the right to settle claims in a manner it deems to be most advantageous.

Question 379

3.6 PART A-LIABILITY COVERAGE

Answer 379

3.6 PART A-LIABILITY COVERAGE
Auto Liability insurance also contains coverage for “supplementary payments.” In providing a defense against claims, the company must pay various associated costs, such as prejudgment interest and interest accruing after judgments, premiums for appeal bonds, and bonds to release attachments. In addition, the company must pay for the cost of bail bonds (up to S250) that are required of the insured because of accidents, including related traffic law violations, and for the insured’s loss of earnings because of attendance at trials or hearings at the insurer’s request (up to S200 per day).

Question 380

3.6 PART A-LIABILITY COVERAGE
Who Is Insured

Answer 380

3.6 PART A-LIABILITY COVERAGE
Who Is Insured
ll1e Insuring Agreement for Part A-Liability contains the company promise to pay for bodily injuries or prop­ erty damages to others, and to defend the insured, as discussed previously.
Those who have the status of “insured,” and thus receive the protection of the policy, include:
1. The named insured and family members for the ownership, maintenance, or use of any auto or trailer.
2. Any person using “your covered auto.”
3. Anyone legally responsible for “your covered auto,” but only for acts or omissions of one who is otherwise an insured.
4. For any auto or trailer other than “your covered auto,” anyone else who does not own or hire the vehicle, If liability is from an act or omission of the named insured or a family member.
Note that (subject to limitations that follow), the named insured and family members are covered for operating all types of vehicles-not only those declared, but those owned by others, and whether or not of a type eligible for PAP coverage.
An example of a #3 insured would be the named insured’s employer, who might be vicariously liable when an acci­ dent occurs during a time when the insured is using the covered auto in the business of the employer. If this “business” accident occurred when the named insured was operating a borrowed car (not a “your covered auto”), the employer would be an insured under #4.

Question 381

3.6 PART A-LIABILITY COVERAGE
Exclusions

Answer 381

3.6 PART A-LIABILITY COVERAGE
Exclusions
Part A exclusions are divided into two parts: (1) insureds not protected and (2) vehicles to which coverage does not apply.
Liability coverage is not provided to any insured:
1. Who intentionally causes injury or damage.
2. For damage to property owned or being trans­ ported by that insured.
3. Except for damage to a residence or private garage, for damage to property rented to, used by or in the care of that insured.
4. For injury to an employee in the course of employment (but the exclusion does not apply to domestic employees not covered by Workers’ Compensation).
5. For an insured’s liability arising from use of a vehi­ cle as a public or livery conveyance. This does not include share-the-expense car pools.
6. While employed or engaged in a business of selling, repairing, servicing, storing or parking vehicles. The exclusion does not apply to the named insured, a family member, or a partner, agent or employee of the named insured or a family member, for use of a “your covered auto.”
7. Except as to a private passenger auto, pickup or van, or a trailer used with any of these, for using any vehicle in a business other than farming or ranching or as described in #6.
8. Using a vehicle without a reasonable belief of permission.
9. For bodily injury or property damage for which that insured is an insured under a nuclear energy liability policy to the named insured or a family member.

Question 382

3.6 PART A-LIABILITY COVERAGE

Answer 382

3.6 PART A-LIABILITY COVERAGE

Vehicles for which Liability coverage is not afforded include the following:
1. Any vehicle with less than four wheels, or designed mainly for use off public (unless vehicle is a trailer, or being used in a medical emergency) roads.
2. A vehicle owned by or furnished or available for the regular use of the named insured, other than “your covered auto.”
3. A vehicle owned by or furnished or available for the regular use of a family member, other than “your covered auto.” But this exclusion does not apply while the named insured or resident spouse is maintaining or occupying such a vehicle.
4. Any vehicle located inside a facility designed for racing, for the purpose of competing in or practicing/ preparing for any prearranged or organized racing or speed contest.

Question 383

3.6 PART A-LIABILITY COVERAGE
Limits

Answer 383

3.6 PART A-LIABILITY COVERAGE
Limits
Auto liability insurance is issued subject to coverage limit(s) on either of two bases: (1) “single limit” or (2) “split limits.”
Single limit means one limit will apply to all claims for bodily injury and property damage arising from a single accident.1he lowest single limit offered is $30,000. Limits such as $50,000, $100,000, S300,000, or S500,000 or higher are in common usage.
Split limits means three separate limits apply: one for each person injured, another for the claims of all persons injured in one accident, and another for all property damage in one accident. The minimum limits are, respectively, Sl0,000, $20,000 and Sl0,000. Split limits are usually expressed in that sequence, in thou­ sands: 10/20/10. Commonly issued higher limits are, for example, for bodily injury: 15/30, 25/50, 50/100, 100/300, 250/500, 500/1,000; for property damage: 25, 50, 100, 250, 500.Thus, a selected combination might be 100/300/50.
Which is a better choice, single or split limits? There is no clear answer, as the results may vary with the specific details of the claim. For example, if one compared the two minimums-S30,000 vs.10/20/10-the total available,
$30,000, would be the same for all injuries and damage in a single accident. If, however, the insured were liable only for one person’s bodily injuries, the single limit form could still pay S30,000, but the split limits could pay only Sl0,000.
What if one compared the minimum single limit against a higher split limit-for example, 15/30/10? That split limit could pay a total of $40,000 for multiple persons injured and property damaged, against the
$30,000 available from a single limit. On the other hand, if, again, liability is only for one person injured, the full
$30,000 is available under the single limit, but only
$15,000 is available for bodily injury, with the split limits.

The policy limits apply only to damages. Costs of defending the insured against claims, and all the supplementary payments, are payable in addition to the policy limits, and there is no separate limit applicable to this part of the coverage. Thus, the total cost of a claim for the insurer may substantially exceed the policy limits.
Coverage for defending against claims exists only so long as coverage exists and the policy limits have not been exhausted. For example, if the single limit of S30,000 applied, and this were paid to a claimant, and another person injured in the same accident later made a claim against the insured, there would be no duty on the part of the insurer to provide a defense.
There is no aggregate limit of protection; i.e. the full coverage limits are available for each separate accident.
All of the standard policies provide that limits afforded will meet the minimum requirements of law in other states. Thus, for example, a Florida insured with limits of 10/20/10 may be in a state that requires motorists to carry 15/30/10, or another that requires 25/50/10; the policy will be interpreted as affording such limits under those conditions wherein it is required of the insured.
Personal Auto Policy liability insurance limits apply as primary coverage for vehicles owned by the insured. To the extent the policy may also provide coverage on vehicles not owned by the insured, coverage is excess over other available coverage. For example, if Juan is driving a car owned by, and with the permission of, Julia, Juan is an insured under both his and her auto liability insurance policies. In a claim against Juan, Julia’s policy will apply first and Juan’s policy will not have to respond until after Julia’s limits are exhausted.

Question 384

3.7 PART B-MEDICAL PAYMENTS COVERAGE

Answer 384

3.7 PART B-MEDICAL PAYMENTS COVERAGE
Medical Payments is an auto insurance coverage that pays reasonable expenses incurred for necessary medical and funeral services to persons injured by accident. Payments are without regard to fault or legal liabilities.
The Medical Payments section of the auto policy pays for expenses incurred for services rendered within three years from the date of accident to “insureds” who, for this part, are defined as:
1. The named insured and family members, while occupying, or as a pedestrian if struck by, any motor vehicle designed for use mainly on public roads or any type of trailer equipment.
2. Other persons while occupying a “your covered auto.”

Exclusions

Several of the Part B exclusions coincide with those found in Part A. There is no coverage for injuries:
1. While occupying a motorized vehicle with fewer than four wheels.
2. While using the “your covered auto” as a public or livery vehicle (carpooling excepted).
3. If workers’ compensation benefits are payable.
4. While occupying an auto, other than a “your covered auto,” which is owned by or furnished or available for the regular use of the named insured, spouse, or a family member (except the named insured or resident spouse is not excluded while occupying such an automobile of a family member).
5. While occupying a vehicle without reasonable belief of permission.
6. While occupying an auto for business purposes, other than a private passenger auto, pickup or van, or trailer used with one of these. This exclusion’s intent is to exclude vehicles that should be insured under a commercial auto policy.
7. While occupying any vehicle, located inside a facility designed for racing, for the purpose of competing in or practicing/preparing for any prearranged or organized racing or speed contest.
Additionally, Medical Payments coverage excludes injuries while occupying a vehicle located for use as a residence or premises, or from causes related to war or nuclear reaction.

Question 385

3.7 PART B-MEDICAL PAYMENTS COVERAGE
How Losses Arc Paid

Answer 385

3.7 PART B-MEDICAL PAYMENTS COVERAGE
How Losses Arc Paid

Any amount payable for Medical Payments coverage is reduced by any amounts payable for the same expense under Liability, PIP, or Uninsured Motorists coverages.
An insured’s Medical Payments coverage is primary, with respect to other available medical payments coverage, when occupying owned automobiles, and excess when occupying nonowned autos.
Medical Payments limits apply “per person.” Common limits are $500, $1,000, S2,000 and $5,000; various other limits are often available. There is no limit for each accident.
Because Florida requires a special coverage called Per­ sonal Injury Protection, or PIP, Medical Payments coverage is offered on an excess basis in Florida.1his means it covers only medical expenses in excess of those covered by PIP benefits.

Question 386

3.8 PART C-UNINSURED MOTORISTS COVERAGE

Answer 386

3.8 PART C-UNINSURED MOTORISTS COVERAGE

While liability insurance protects an insured against claims of others, Uninsured Motorists (UM) coverage is a form of coverage to pay compensatory damages for bodily injuries, under one’s own policy, for amounts that would otherwise have been recovered from the liability insurance of another-either an uninsured motorist, or one who carries liability limits that are lower than the insured’s damages.

Question 387

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Florida UM Law

Answer 387

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Florida UM Law
UM coverage in Florida is governed by the provisions of F.S. 627.727. This law is rather complete as to what the coverage shall be, how it shall be offered, and various other details. To the extent any differences may be found between insurance policy provisions and those of the law, the requirements of the law govern.
The way in which UM recoveries are based upon one’s tort rights may best be illustrated by an example:
Fred, permanently injured by Mark in an accident, has total damages valued at SS0,000. Fred has PIP and has recovered the full Sl0,000 limit, and has UM coverage with a limit of $100,000. Mark has liability insurance with limits of 10/20/10.
Fred’s UM recovery is $30,000: the SS0,000 in damages less $10,000 recovered from PIP less $10,000 available from Mark’s liability insurer.
Note the example states Fred was permanently injured. As UM relates to Fred’s tort rights against Mark, Fred would have to pierce the no-fault tort threshold for the measurement of recoverable damages to include any noneconomic loss.

Question 388

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Duplicate Coverage

Answer 388

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Duplicate Coverage
UM is not intended to duplicate payments otherwise available. If Fred has already recovered from Workers’ Compensation, a disability benefit or a similar law, or from auto Medical Payments coverage, those amounts would be deducted from the damages to reduce the UM payment. Also, UM coverage does not pay for punitive or exemplary damages.

Question 389

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Insureds

Answer 389

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Insureds
The law is not entirely specific about who is subject to UM benefits under an insured’s policy. Generally, how­ ever, coverage applies to the named insured and family members in their own vehicles, in any other vehicle, and as pedestrians. Other persons are covered while occupy­ ing the named insured’s vehicle.
The injury must be caused bya vehicle that does not have liability insurance (or its equivalent, such as qualified self-insurance), or liability insurance with a limit that is lower than the insured’s damages. In addition, coverage applies if the other party’s liability insurer is insolvent or if the other vehicle is a “hit-and- run’’ (and thus cannot be identified).

Question 390

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Limits

Answer 390

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Limits
Limits of coverage are offered in the same way as auto Liability coverage. There may be a single limit, the minimum being S20,000 per accident, or there may be split limits with a minimum of Sl0,000 per person, $20,000 per accident (10/20). Any higher limits are permissible.

Question 391

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Other Requirements

Answer 391

3.8 PART C-UNINSURED MOTORISTS COVERAGE
Other Requirements

UM coverage is generally only available in conjunction with auto liability insurance. The UM law requires that every policy that provides primary Liability coverage for a specific motor vehicle must include “stacked” UM at the same limits as apply for Liability coverage, unless the insured, in writing, (1) rejects UM coverage, elects UM coverage at limits lower than those that apply for Liability, or (3) elects “Non-stacked” UM coverage.
“Stacked” coverage means the coverage limits pro­ vided for two or more vehicles are added together in determining the limit of insurance coverage available to an injured person in any one accident.
“Non-stacked” UM coverage d.mrrers firom “stacked.” in the following ways:
1. The coverage available to a person injured while occupying a motor vehicle is only the limit appli­ cable to that motor vehicle.
2. An injured person is entitled to the highest limits of UM coverage that apply to any vehicle for which he or she is a named insured or family member, if the injured person is occupying a motor vehicle that he or she does not own or that is not owned by a member of his or her family who resides in the same household. This coverage is excess over cover­ age on the vehicle the injured person is occupying.
3. UM coverage does not apply to an insured injured while occupying any vehicle owned by insureds for which no UM coverage was purchased under this policy.
4. A family member is not insured for UM coverage while occupying any vehicle owned by the named insured which is insured on a primary basis under another policy. The UM available would be the amount of coverage on that particular vehicle.
5. A person who is injured in an accident while not occupying a motor vehicle may select the limit of UM coverage that is applicable to any vehicle afforded UM coverage by a policy under which he or she is a named insured or insured resident of the named insured’s household.
6. “Non-stacked” coverage must be offered at reduced rates. If the insured or applicant signs a department approved form, there is presumed to be informed, knowing acceptance of the limitations in coverage. The signing of the form by the named insured, whether it’s a selection or rejection, is assumed for all insureds.
The UM law also requires that insurers send at least annually, and “attached to the notice of premium,” a notification to insureds of all options available to them under the law and provide them a means to respond. However, receipt of the notice will not constitute a waiver of coverage, where the insured has not signed a selection or rejection form.
Determination of damages may be achieved through(1) agreement between the insured and the UM insurer, or
(2) arbitration proceedings between the insured and the UM insurer, or (3) if the insurer refuses to arbitrate, by suit jointly against the other party and the UM insurer.
Policies that provide only excess coverage, such as umbrella policies, are not required to automatically include UM coverage, but the insurer is required to make UM coverage available under such a policy, up to $1 million limits, at the written request of the insured.

Question 392

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE

Answer 392

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
Under the Part D Insuring Agreement of the Personal Auto Policy, the company agrees to pay for direct and accidental loss to a “your covered auto” or to any “non­ owned auto,” including their equipment. This type of coverage is sometimes called physical damage coverage.
A “nonowned auto” (not included in the policy’s general definitions section) is defined as a private passenger auto, pickup, van or trailer not owned by or furnished or available for the regular use of the named insured or a family member, while being operated or in the care of the named insured or a family member.
The coverage that applies to a nonowned auto is the broadest coverage applicable to any “your covered auto” in the Declarations and is excess over any other collectible insurance.

Question 393

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE

Answer 393

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
Part D has two coverages, Other Than Collision and Collision. Customarily, Other Than Collision Coverage may be issued without Collision Coverage, but Collision Coverage is not issued alone.
Collision means upset or impact with another object, with the provision that loss caused by the following perils are considered Other Than Collision: missiles, falling objects, fire, theft, larceny, explosion, earthquake, wind­ storm, hail, water, flood, vandalism, riot, civil commotion, contact with bird or animal, breakage of glass. Other Than Collision Coverage covers all direct and accidental loss not covered by Collision Coverage, except as excluded.

An additional benefit automatically included under Part D is “Transportation Expenses.” It only applies if Collision and/or Other Than Collision Coverage is provided for the applicable auto. The company agrees to pay up to S20 per day, to a maximum of $600, for
(1) transportation expenses incurred because of covered loss to a “your covered auto,” or (2) loss of use expenses incurred because of a covered loss to a “nonowned auto.” A deductible does not apply. The benefit begins 24 hours after a loss. (Exception: 48 hour waiting period applies if loss is a total theft of a vehicle.) Coverage ends when “your covered auto” or the “nonowned auto” is returned to use or the company pays for its loss.

Question 394

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
Exclusions

Answer 394

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
Exclusions

The Part D exclusions relate principally to equipment. The policy does not cover:
1. Electronic equipment designed for the reproduction of sound, including but not limited to radios, stereos, tape decks, citizens band radios, telephones, two-way mobile radios, scanning monitor receivers, television monitor receivers, video cassette recorders, audio cassette recorders, compact disc systems, navigation systems, Internet access systems, and personal computers.
However, coverage is provided if such equipment is permanently installed in the auto. A limit of Sl,000 applies for permanently installed equipment located in a spot not designed by the manufacturer for such equipment.
2. Tapes, records, discs, other media or any other accessories used with equipment described in 1 above.
3. A “your covered auto” or any “nonowned auto” that is destroyed or confiscated by governmental or civil authorities.
4. A camper body or trailer not shown in the Declarations (coverage applies to those acquired during the policy period, if vehicle reported to carrier within 14 days of purchase).
5. Awnings, cabanas, or equipment designed to create additional living facilities.
6. Equipment designed or used for the detection or location of radar (“fuzz buster”) or laser.
7. Custom furnishings or equipment in a pickup or van, including but not limited to special carpeting and insulation; furniture; bars; cooking and sleep­ ing facilities; height-extending roofs; and custom murals, paintings, decals, and graphics.

Question 395

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE

Answer 395

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
As to nonowned autos only, there is no coverage for those associated with the business of selling, repairing, servicing, storing, or parking of vehicles; use in other business except for a private passenger auto or trailer by the named insured or a family member; using without reasonable belief there is permission; or loss to a rented vehicle if the rental agreement provides the named insured or family member is not liable.
Coverage also excludes use of a “your covered auto” or any “nonowned auto” as a public or livery conveyance (car-pooling excepted), or (while located inside a facility designed for racing) for competing in or practicing for any prearranged or organized racing or speed contests.
Finally, causes of loss excluded are wear and tear; freezing, mechanical or electrical breakdown; failure or road damage to tires (unless any of those result from total theft of a “your covered auto” or any “nonowned auto”); and war or nuclear causes.

**

Question 396

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
How Losses Are Paid

Answer 396

3.9 PART D-COVERAGE FOR DAMAGE TO YOUR AUTO COVERAGE
How Losses Are Paid

Part D’s limit of liability provision calls for payment of the lesser of actual cash value or the cost to repair or replace, and a special limit of $1,500 applies to any nonowned auto that is a trailer.

Question 397

3.10 PARTS E AND F-OTHER PROVISIONS

Answer 397

3.10 PARTS E AND F-OTHER PROVISIONS

Part E imposes various responsibilities on the insured after an accident or loss. All of the following are required, depending upon the type of claim, to enable the company to properly process the claim: Prompt notice and forwarding of legal papers; cooperation; submission to physical exams; submission to examination under oath; providing proof of loss; reporting to police if it is a UM hit-and-run claim or theft claim; protecting against further loss; and allowing inspection and appraisal of damage before repair or disposal.

The General Provisions of Part F contain contract conditions about policy changes, coverage denial for fraud, how the company may be sued, company subrogation rights, and transfers of interest. There are two provisions, however, that require special attention.
“Policy Period and Territory” states that coverage applies only to accidents and losses that occur during the policy period and within the U.S., its territories or possessions, Puerto Rico, or Canada. Losses or accidents involving a “your covered auto” while it is being transported between ports of these locations are also covered. Coverage on automobiles driven outside of the territorial limits is automatically suspended.
Policy termination and nonrenewal provisions are governed by Florida laws and are reviewed later in this unit.

Question 398

3.11 ENDORSEMENTS

Answer 398

3.11 ENDORSEMENTS
There are numerous optional endorsements available for the Personal Auto Policy that expand or restrict coverage, or operate to serve special purposes. Those commonly used are described below.
Extended Nonowned Coverage: This endorsement modifies some of the PAP exclusions as to how they apply to the named insured or a family member if named in the endorsement. Liability coverage (and optionally, Medical Payments) is added for a nonowned auto that is furnished or available for the regular use of the person. A separate endorsement is available to cover the individual named using a nonowned vehicle as a public or livery conveyance.
Towing and Labor: This endorsement covers towing and costs of labor performed at the place of disablement. Limits usually available are $25, $50, $75, or $100 per disablement.
Coverage For Excluded Equipment (several endorsements): Several endorsements are available that allow the insured to “buy back’’ coverage that is normally excluded by paying an additional premium.
Sound Receiving and Transmitting Equipment: ]his endorsement adds coverage, with no deductible applying, for such equipment if it is permanently installed in the auto (i.e., it covers without requiring that installation be in the dash or console designed by the manufacturer).

Part D of the Personal Auto Policy excludes loss to equipment for reproduction of sound, such as stereo tape decks, unless it is permanently installed. In addition, loss to sound receiving and transmitting equipment, such as CB radios, mobile radios or phones is excluded unless it is permanently installed in dash.
The “Tapes and Records” endorsement covers tapes and records owned by the insured, while they are contained in a covered auto, for up to $200, with no deductible. A CB radio and similar equipment may also be covered for their actual cash value. The “Audio, Visual and Data Electronic Equipment and Tapes, Records, Discs and Other Media” endorsement adds coverage, with no deductible applying, for such equipment if it is permanently installed in the auto (i.e., it covers with­ out requiring that installation be in the dash or console designed by the manufacturer).Tapes, records, disc and media owned by the insured, while contained in a covered auto, may be covered for loss up to $200.
Customizing Equipment: This endorsement adds a specified amount of coverage to pickups and vans for the additional equipment otherwise excluded, such as awnings and cabanas.
Named Nonowner Coverage: This endorsement pro­ vides Liability, Medical Payments and UM coverages for a named individual who does not own an automobile, to cover for operation of autos owned by others. (For those who own an auto, this coverage is already included in the PAP.)
Miscellaneous Type Vehicle: With this endorsement, a PAP may be issued to cover equipment such as motor homes, motorcycles, golf carts and all-terrain vehicles. The endorsement imposes some restrictions on the definition of “your covered auto” and the definition of insured.
Joint Ownership Coverage: Required when a PAP is issued to cover two or more relatives (whether or not residing together) or individuals residing together. 1l1e endorsement imposes some restrictions on liability cov­ erage for nonresident relatives and their family members.
Increased Limits Transportation Expenses Coverage:
With this endorsement, the “transportation expense”

basic limits of $20 day/$600 maximum is increased to any limit selected by the insured.
Extended Personal Injury Protection: For the named insured and family members only, this increases PIP medical benefits from 80% to 100% and work loss ben­ efits from 60% to 80%.The maximum limit per person remains Sl0,000.
Additional Personal Injury Protection: (Only available if Extended PIP is purchased.) For the named insured and family members only, this endorsement increases the Sl0,000 per person maximum PIP benefit. Additional amounts commonly available include $10,000, $25,000, 540,000 and 590,000.

Question 399

3.12 RATING

Answer 399

3.12 RATING
The “standard” rating plan provided by Insurance Ser­ vices Office, from which there are numerous variances by individual companies, primarily recognizes the territory in which the vehicle is garaged, the age, sex, and mari­ tal status of the operators, how the automobile is used, and the prior driving records of operators. For physical damage coverages, the value of the car is measured.
Territorial rating reflects differing accident rates and loss costs in different areas. Generally, rates in urban areas are higher than in rural areas.
Rates are highest when the principal operator is a youthful unmarried male and lowest when there are no youthful operators and the auto is garaged on a farm. In between these extremes, there is separate rating for youthful unmarried males who are occasional rather than principal operators, youthful unmarried females, married youthful males, senior operators, and those who do not fall into any of these special categories.
As to usage, rating variations occur for pleasure use only, commuting use, use for business purposes, and farm use.
Under the “Safe Driver Insurance Plan,” lowest rates apply if all the family operators have had no accidents or serious traffic violations during a prior three-year period. “Points” are assigned for at-fault accidents and violations such as driving under the influence, but not for minor infractions.
For physical damage coverages, each make and model of private passenger automobile is assigned a “symbol” that

recognizes both the value of the car and its damageability in accidents. Pickups and vans are rated based on their original cost new, with rates declining with age.
Beyond those basic elements of rating, numerous other factors are recognized. If the family owns two or more cars, there are multi-car discounts. Reductions apply when youthful drivers have completed an approved driver-training course or are “good students” (B average or better) in school. There is a credit for senior drivers who complete an approved defensive driving course. There are discounts for PIP and Medical Payments if the vehicle contains a passive restraint system. Discounts apply for Other Than Collision Coverage if there is an anti-theft device.
Once all these criteria that enter into rating are established, a final premium depends upon the coverage limits and deductibles selected.

Question 400

3.13 MISCELLANEOUS FLORIDA AUTOMOBILE LAWS
Cancellation, Nonrenewal

Answer 400

3.13 MISCELLANEOUS FLORIDA AUTOMOBILE LAWS
Cancellation, Nonrenewal

F.S. 627.728 (For full statute reference see 19.8) limits companies’ cancellation and nonrenewal options as to policies covering private passenger autos and nonbusiness light commercial autos and issued to individuals or relatives who reside together.
During the first 60 days of a new policy-F.S. 627.728 states an insurer may cancel for any reason except dis­ crimination with respect to race, color, national origin, creed, marital status, or sex. Unless there is a reasonable relationship between such characteristic and the coverage being issued, cancellation is also prohibited based upon residence, age, lawful occupation of the individual, or location of the risk. For policies providing mandatory PIP and property damage liability, F.S. 627.7295 (For full statute reference see 19.8) prohibits cancellation:
(1) by the insurer for nonpayment of premium unless payment was made by a dishonored check or the insured failed to respond to a valid notice of additional premium; or (2) by the insured except for total destruction of the vehicle, transfer of ownership, or after purchasing at least the mandatory coverages for the same vehicle from another insurer, or (if military personnel) when insured is deployed outside the United States.

After 60 days of a new policy-For the remainder of a new term, and from inception of a renewal, an insurer may cancel only for nonpayment of premium, material misrepresentation or fraud, or suspension or revocation of the driver’s license or registration of an operator during the policy term or within the previous 180 days.
When cancellation is permitted, 45 days’ notice to the insured is required, except 10 days’ notice is permitted for nonpayment of premium.
F.S. 627.728 also prohibits nonrenewal except with 45 days prior notice, unless the insurer has manifested a willingness to renew the policy or the premium is not paid. Insurers may not refuse to renew the policy based on sex, occupation, marital status, residence, military service, age, or place of principal garaging in Florida, or because of race, color, creed, or national origin.
A valid cancellation notice must state the reason and must also notify the insured of a right to an Insurance Department hearing to contest the cancellation. Both cancellation and nonrenewal notices must advise the insured of possible eligibility for coverage in the Florida Joint Underwriting Association.
For all auto insurance policies not subject to F.S. 627.728, cancellation rights are limited under F.S. 627.7281 (For full statute reference see 19.8).This section requires 45 days’ notice to cancel or nonrenew, except 10 days’ notice for nonpayment of premium. The notice must state the reasons for termination or nonrenewal.
As provided by F.S. 627.7283 (For full statute reference see 19.8), if the insured cancels a policy of motor vehicle insurance, the insurer must return the unearned portion of any premium paid within 30 days of receipt of the notice of cancellation. If the insurer cancels the policy it must mail the unearned premium within 15 days after the effective date of cancellation.
Unfair Trade Practices
F.S. 626.9541(For full statute reference sec 19.8) contains a variety of prohibitions on refusal to insure or renew, and premium surcharges, for certain factors. Generally, these concentrate on forbidding discrimination based on factors such as race, color, creed, marital status, handicap, disability, and no-fault accidents, but

also addresses such illegal practices as sliding, coercion, misrepresentation, defamation, and false advertisement..
Information Disclosure to Claimants
F.S. 627.4137 (For full statute reference see 19.8) requires a liability insurer to disclose full policy information to a claimant within 30 days, upon written request. If requested in writing by the claimant or claimant’s attorney, an agent is also required to disclose the “name and coverage of each known insurer” and to forward the request to all affected insurers.
Glass Breakage-Deductibles
F.S.627.7288 (For full statute reference see 19.8) prohibits application of any deductible in adjustment of breakage of windshield glass.

Question 401

3.14 MECHANICAL BREAKDOWN INSURANCE
Coverage

Answer 401

3.14 MECHANICAL BREAKDOWN INSURANCE
Coverage
The purpose of mechanical breakdown insurance is to provide coverage against the failure of an original or replacement part, when properly cleaned or serviced, to perform any function for which it was designed.
Typically, the following parts are covered: engine, trans­ mission, drive axle, steering assembly, air conditioner, and front suspension. These terms are more precisely defined in the policy contract; for example, the steering assembly parts are the steering gear housing and all internal parts, power steering, valve body, piston, and rack.
Payment is for the usual and fair charge for parts and labor to repair or replace a covered part with like kind and quality. A specific dollar limit of coverage may be specified with the company’s responsibility limited to not more than the actual cash value of the vehicle.
Some policies have a rental reimbursement provision, paying up to SlS per day, up to a maximum of S75, for a substitute vehicle during the period of repair.
Exclusions
Principal exclusions may include:

1. Mechanical breakdown caused by lack of customary maintenance.

FLORIDA PROPERTY AND CASUALTY INSURANCE LICENSING STUDY MANUAL

2. Breakdown caused by collision, fire, theft, vandalism, riot, explosion, lightning, earthquake, windstorm, hail, or flood.
3. If the odometer or any covered part has been altered in any way.
4. Towing, road service, or storage charges.
5. Seals, gaskets, oil, grease, or refrigerant unless required in connection with the repair of a covered part.
6. Motor tune-ups.
7. Breakdown resulting from racing or other competition.
8. Breakdown caused by towing a trailer or another vehicle, unless the covered vehicle is equipped for this as recommended by the manufacturer.
9. If the covered vehicle is used to carry passengers for hire or if it is rented to another.
   Deductible
   Coverage is subject to a deductible that is subtracted from the cost incurred to remedy each breakdown per assembly. A single deductible applies if more than one covered part is involved in the same breakdown.
   Policy Term and Territory

Generally, the policy term is 36 months after delivery or 36,000 miles, whichever comes first, for new cars; and 12 months or 12,000 miles for used cars. The policy territory, within which the breakdown must occur during the policy period, is usually the United States, its territories or possessions, and Canada.
Conditions

The insured is required to service and maintain the automobile in accordance with the manufacturer’s maintenance guide. Receipts for work done may establish proof of proper maintenance.
Further policy conditions require the insured to notify the insurer promptly of how, when, and where the mechanical breakdown occurred; to take reasonable precautions to prevent additional cost of repairs after the breakdown has occurred; to permit inspection of the vehicle by a company representative before the repairs are performed; to submit a proof of loss; and to cooperate in any investigation.
A Mechanical Breakdown policy contains a subrogation clause, assigning to the insurer any rights of the insured against others, to the extent of loss payments. Arbitration only addresses the value of a claim. It does not apply or address the issue of coverage of a claim.
An arbitration clause will apply to resolve disagreements between insurer and insured as to the amount payable for a claim.
For cancellation of the policy, statutory requirements prevent termination by the company except with 45 days prior notice, except 10 days’ notice for nonpayment of premium.