Personal Auto Insurance

Question 0

What does the personal auto policy consist of?

Answer 0

A declarations page and a policy form.

Question 1

What is a PAP?

Answer 1

Personal auto policy that has both property and liability coverage.

Question 2

How many coverages does the personal auto policy form contain? What are they?

Answer 2

4 different coverages

Part A: liability coverage
Part B: medical payments coverage
Part C: uninsured motorists coverage
Part D: coverage for damage to your auto (physical damage)

Question 3

What does the definitions section of the personal auto policy contain?

Answer 3

Defines certain key terms used in the policy.

Question 4

What does part A - liability coverage cover?

Answer 4

Damages for bodily injury or property damage that an insured becomes legally responsible for because of an auto accident.

Question 5

What are the three conditions that must be met for a loss to be covered under Part A - liability coverage?

Answer 5

1. Policy only protects those who are considers insureds
2. Coverage applies only to damages for which the insured is legally responsible
3. Damages must involve bodily injury or property damage and result from an auto accident

Question 6

Who is considered an insured under Part A of an auto policy?

Answer 6

1. The named insured and members of the insureds family while using any auto
2. Anyone using the insureds car with the insureds permission or the reasonable belief that he is entitled to do so.
3. Other people or organizations to the extent that they share liability with an insured
4. Other persons or organizations for their liability arising out of an accident involving any auto or trailer used by the insured or a family member (does not apply if the auto or trailer is owned by the person or organization in question).

Question 7

What are supplementary payments included in the liability portion of the personal auto policy?

Answer 7

1. Up to $250 for the cost of bail bonds
2. Premiums on appeal bonds or bonds to release attachments
3. Postjudgment interest (prejudgment interest is included as part of the liability limit)
4. Up to $200 per day for loss of earnings because of attendance at hearings or trials at the company’s request
5. Other reasonable expenses incurred by the insured at the company’s request

Question 8

How are limits usually expressed for liability coverage?

Answer 8

Usually as a series of three numbers such as 25/50/25 this means the policy will pay

$25,000 per person for bodily injury
$50,000 per accident for bodily injury
$25,000 per accident for property damage

Question 9

What is the out of state coverage provision?

Answer 9

Modified the personal auto policy to meet other states financial responsibility requirements and other state laws concerning out of state drivers when the covered auto is being driven in that state.

Question 10

What is the other insurance clause?

Answer 10

States that the company will only pay its share of a loss that is also covered by other insurance

Question 11

What does Part B - medical payments coverage provide?

Answer 11

Protection for the named insured, family members, and passengers in the named insureds auto for injuries received in an accident, regardless of who was at fault. It is NOT a form of liability coverage for injuries sustained by passengers in another auto involved in an accident with the insured.

Question 12

What are typical limits for each person under medical payments coverage?

Answer 12

1,000
2,000
5,000
10,000

Question 13

What does Part C - uninsured motorists coverage provide?

Answer 13

This coverage indemnifies the insured for bodily injury only as a result of an accident with a legally liable uninsured motorist. Only compensatory damages are cover, punitive damages are specifically excluded.

Question 14

What are the four conditions that must be met before the insured can be indemnified under Part C?

Answer 14

1. The loss must be caused by an auto accident and involve bodily injury (in most states)
2. The loss must be sustained by an insured
3. The insured must be legally entitled to recover for BI damages
4. The other vehicle must meet the definition of an uninsured motorist

Question 15

What is the one important difference is there between the uninsured provisions in Parts A and B vs Part C?

Answer 15

The amount that the insured can be paid is limited to the highest single policy limit for uninsured motorists coverage.

Question 16

What is covered under Part D - coverage for damage to your auto (physical damage coverage)?

Answer 16

Pays for direct and accidental loss to the named insureds covered auto or any nonowned auto against loss caused by:

Collision or other than collision (OTC or comprehensive)

Question 17

What is transportation expenses coverage?

Answer 17

This coverage pays up to $20 per day, to maximum of $600, for:

Transportation expenses incurred by the insured because of physical damage losses to the insureds covered auto and loss of use expenses for which the insured becomes legally responsible because of loss to a nonowned auto.

Question 18

What is other sources of recovery?

Answer 18

Insurer will pay only its share of the loss of any other source of recovery not just insurance applies to the loss

Question 19

What does Part E - duties after an accident or loss entail?

Answer 19

Details the duties of insureds following a loss.

Question 20

What does Part F - general provisions entail?

Answer 20

Establishes conditions for the coverage and describes the duties and obligations of the insured and insurer.

Question 21

What does the termination provision entail?

Answer 21

Describes conditions for cancellation and nonrenewal. The insured may cancel the policy at any time by returning the policy or providing advance written notice of cancellation or nonrenewal.

Question 22

What does underinsured motorists coverage do?

Answer 22

Pays the difference between the insureds actual damages for bodily injury and the amount of liability insurance carried by the driver who was at fault, up to the limits of the insureds underinsured motorists coverage.

Question 23

What is the joint ownership coverage endorsement?

Answer 23

The policy can be issued to two or more people who live in the same household or two or more people who are related in another way besides being spouses.

Question 24

What is the towing and labor costs endorsement?

Answer 24

Reimburses the insured for the cost of having a vehicle towed.

Question 25

What is the miscellaneous type vehicle endorsement?

Answer 25

Provides coverage for motorcycles, mopeds, and recreational vehicles such as motor homes and golf carts.

Question 26

What is the extended nonowned coverage - vehicles furnished or available for regular use endorsement?

Answer 26

Expands the extensive coverage automatically provided under the personal auto policy for the insured and the family while driving cars other than the insureds covered autos.

Question 27

What is the optional limits transportation expenses coverage endorsement?

Answer 27

Allows the insured to select the daily and maximum limits of coverage provided for transportation and loss of use expenses for scheduled and nonowned autos.

Question 28

What is the excess electronic equipment endorsement?

Answer 28

Allows the insured to add coverage for tapes, records, and disks used with electronic media and increase the limits of insurance for electronic equipment that is permanently installed in an area of the auto not normally used for installing this equipment

Question 29

What is the named nonowner coverage endorsement?

Answer 29

May be issued to someone who does not own an automobile but drives borrowed or rented autos. It might be used to provide coverage for an individual who drives a corporate owned auto furnished for his use by an employer.

Question 30

What is a no fault law?

Answer 30

Under these laws, an insured driver is reimbursed by his own insurance company for medical expenses and loss of wages, regardless of who was at fault in the auto accident.

Question 31

What are assigned risk plans? (Auto insurance plans)

Answer 31

Voluntary agreements between insurance companies licensed in a particular state. These companies agree to share the poor risks among themselves.