Unit 3 Flashcards
Florida Financial Responsibility Law
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.
Persons found guilty of driving under the influence (DUI) must purchase limits for a minimum of three years of either:
- 100/300/50 Liability Limits (or)
- $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.
The Financial Responsibility Law can be satisfied in one of three ways
- 10/20/10 auto liability limits at the time of the occurrence
- Being a qualified self-insurer for 10/20/10 limits
- Posting a cash bond that guarantees responsibility to 10/20/10 limits
If financial responsibility did not exist at the time of the accident, two things must happen to avoid penalties:
- The legally valid claims of others must be satisfied (up to the 10/20/10 requirements).
- The owner & operator must provide certification (SR-22) of financial responsibility for future accidents.
SR-22
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.
No-Fault
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.
Elements of the No-Fault Elements law
- Immunity
- First Party Coverage
- Penalties
NOTE: The “first party” in an insurance contract/policy refers to the insured.
Immunity
Those that are subject to the law, and comply with the law, are immune from legal liability for causing bodily injuries to others
First Party Coverage
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.
Penalties
The No-Fault law requires PIP coverage be carried by the owners of motor vehicles, and imposes _______ for failing to do so.
the insured
PIP benfits follow
the motor vehicle
Tort immunity follows
90
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.
No-Fault Penalties
three penalties for non-compliance:
- Personal liability for payment of PIP benefits to those entitled to receive such benefits.
- No “immunity” from legal liabilities which are granted to those who do comply.
- Suspension of driver’s license and vehicle registration
10,000
The required limit for the package of PIP benefits is __________ per person per accident.
Medical Benefits
This PIP benefit pays for 80% of reasonable expenses for necessary medical expenses.
Work Loss
This PIP benefit reimburses up to 60% of loss of gross income or earning capacity
Replacement Services
This PIP benefit pays up to 100% of the cost for having household services performed.
$5,000
Death Benefit payable is up to
No- Fault law Other Requirements
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.
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?
FORMULA:
(Damages - Deductibles) X Coinsurance = Claims Payment
ANSWER:
($5,000 Judy’s Damage - $1,000 Judy’s Deductible) X .80 (80%) = $3,200
PIP Recovery Formula
(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.
Winston has a PIP claim with $5,000 in injuries and a $500 PIP deductible. How will Winston’s PIP claim be calculated?
($5,000 Injuries - $500 PIP Deductible) X 80%
Greg has a PIP claim with $25,000 in injuries and a $1,000 PIP deductible. How will Greg’s PIP claim be calculated
($25,000 Injuries - $1,000 PIP Deductible) X 80% = $19,200… but the maximum PIP Coverage is a $10,000 Payout
excess
PIP is ______ to Workers’ Compensation
primary
PIP is _____ to Medical Payments coverage
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?
yes, the accident occurred in Florida and she was in an insured vehicle
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?
Joe’s injuries are covered under Joe’s PIP
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?
Joe’s injures are covered under Joe’s PIP coverage
True
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”.
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?
- if the person is a Florida resident, if struck by the insured’s motor vehicle while a pedestrian
- while occupying the named insured’s motor vehicle
- neither statement is correct
- both statements are correct
Yes, as long as the accident occurred in Florida AND Hector does not have any other PIP Coverage available to him.
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?
PIP affords coverage for an occupant of an insured vehicle if that person is “not an owner of a motor vehicle, or entitled to benefits from another owner’s insurer”.
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. If Hector’s injuries are covered, why are they covered? Hector is not a residing relative of Joe
are
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.
No-Fault Law has no application
- the Named insured and relatives are occupying or are struck by “other’s” vehicles while out-of-state.
- Non-resident passengers of an insured vehicle while that vehicle is out-of-state (that is an accident not in Florida).
- Non-residents as pedestrians in Florida.
False
True or False? Non-Florida residents are covered by the PIP of the vehicle which struck them if they are struck as pedestrians.
No-Fault’s Exclusions
- 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.
Which, if any, of the following are covered by PIP?
- a permissive user involved in an accident
- use of an insured vehicle in the commission of a felony
- use of an insured vehicle to injure oneself purposefully
- a non-permissive user involved in an accident
No-Fault’s Tort Exemption
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.
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.
- Jill can sue Jack in court to recover the $3,000
- None of these apply
- Jack is exempt from any claim or suit
- Jill can make a claim against Jack’s PIP
A: 3
PIP exceptions AKA “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
- Significant and permanent scarring or disfigurement. OR
- Death.
George Todd will not be exempt for claims from injuries sustained to any third parties.
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”?
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. What dictates if George Todd is exempt or not exempt?
The rule of law is that the exemption follows the vehicle not the person operating the vehicle.
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:
- George’s only recovery is under his PIP coverage; George’s barred from any recovery from RIngo
- George can claim $1,000 from Ringo
A: #2
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. How much will Barney collect from his insurance company?
Barney recovers $4,400 from his own PIP ($6,000 - $500 x 80%)
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?
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
Susan Studip has been convicted of driving under the influence of alcohol. Has she pierced Florida’s Financial Responsibility law?
Yes, as she carries liability limits greater than or equal to 10/20/10
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
Mr. Jones, your auto insured has “triggered” Florida’s Financial Responsibility law which of the following may be that trigger?
Your insured has “triggered” Florida Financial Responsibility law which of the following may be that trigger?
- All statements are correct
- invalid registration
- parking ticket
- automobile accident involving bodily injury
A: #4
subject
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.
Comprehensive and Collision have not been purchased by the insured and are not included in the policy.
On the PAP declarations page there is no premium amount corresponding to Comprehensive and Collision coverages. What does this mean?
Jointly to the Named Insured and Loss Payee
The naming of a Loss Payee on the PAP Declarations ensures: claims payments under Coverage D will be paid
“you “ & “your” (PAP definition)
refer to the named insured and resident spouse (if any).
“owned” (PAP definition)
includes an auto leased for six months or more.
“bodily injury” (PAP definition)
means bodily harm, sickness or disease and resulting death.
“property damage” (PAP definition)
means physical injury to or loss of use of tangible property.
“business” (PAP definition)
means trade, profession or occupation.
“family member” (PAP definition)
means relatives, wards and foster children in the household of the named insured.
“occupying” (PAP definition)
means in, upon, getting in, on, out of or off
“trailer” (PAP definition)
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
any vehicle shown in the Declarations Page
Your Covered Auto in the PAP is defined as….
The PAP definition of “your covered auto” includes any trailer owned by the insured.
true
Johanna Insured’s insured vehicle is in the repair shop being repaired. Johanna has a rental vehicle (a temporary substitute) for ten days. Does the rental vehicle (temporary substitute) meet the PAP definition of a “your covered auto”?
Yes, the PAP definition of a “your covered auto” includes a temporary substitute for an insured vehicle due to that vehicle’s breakdown, servicing, or repair.
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”
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).
Coverage for a “newly acquired auto” will begin at the time you _______ the coverage; applied as follows
request
the ________ coverage of any vehicle on a current policy of the insured applies to the
new vehicle
broadest
ownership begets coverage (when you _______
the vehicle)
acquire
requires insured to add within ____
of ownership
14 days
replacement vehicles have coverage without
_______
request
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.
- broadest
2. excess
Livery
is the transportation of people and/or goods for hire
injury
Liability coverage is not provided to any insured who intentionally causes _____ or damage.
Single Limit
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”.
Split Limits
three separate limits are listed and apply as follows =
- the first number is for the maximum limit to any one person injured in an accident.
- the second number is for the maximum limit to all of the people injured in an accident.
- he third number is the limit for all property damage in an accident.
EX: 100/300/100
defense
______ costs are in addition of the policy limits (that is “not included” in the policy limits).
primary
Medical Payments coverage is ________, with respect to other available medical payments coverage, when occupying owned automobiles.
Uninsured Motorist coverage
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
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
75,000
Calculation:
25,000 x 3 = $75,000
non-owned
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.
Part C: Uninsured Motorists (UM) coverage
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
PART C: UNINSURED MOTORIST
WHO is insured?
Named Insured and
Family Members
a) In any auto
b) As a pedestrian
Others are insured
while occupying
“your covered auto”
Stacked UMBI
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
Non-stacked
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
Determination of damages for UMBI can be achieved through:
1) Agreement
2) Arbitration
3) Suit
recoverable
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.
UMBI does not pay for
duplicate payments.
punitive damages
exemplary damages
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?
$10,000
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?
$50,000
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?
$240,000 ($300,000 less the $10,000 PIP and less the $50,000 of Earnie’s liability coverage)
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?
$10,000
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?
$10,000
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?
$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).
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?
10,000
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?
$0 as they are uninsured
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?
$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.
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?
- Both statements are correct
- You advise your insured that UMBI covers lost wages
- neither state is correct
- You advise your insured that UMBI covers non-economic damages such as pain & suffering
A: #1
Unstacked Uninsured Motorists must be offered at ____
reduced rates
Uninsured Motorist coverage applies if the at-fault- party’s insurer is _______
insolvent (meaning unable to pay debts owed)
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?
250,000
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
10,000
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?
50,000
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?
$0
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?
100,000
Uninsured Motorists Bodily Injury (UMBI) coverage pays compensatory damages for _____ for amounts which otherwise should have been recovered from the Liability insurance of another.
bodily injuries
Florida law requires stacked UMBI with limits equal to the policy’s Liability limits unless the…
- insured elects non-stacked UMBI
- Insured rejects UMBI coverage
- Insured elects UMBI coverage lower than the policy’s liability limits
- Each of these statements is correct regarding stacked UMBI coverage
A: #4
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?
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).
PART D: DAMAGE TO YOUR AUTO
WHAT vehicles are covered?
- your covered auto
2. non-owned auto, including their equipment
Coverage for Damage to Your Auto covers ______ and _____ physical damage to YOUR COVERED AUTO
- direct
2. accidental
_____ _____ 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
non-owned auto
______ which covers the loss for upset or impact with another vehicle or object.
Collision
____ ____ ____ which covers all direct and accidental loss not covered by Collision coverage.
Other Than Collision
_______ ________ 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.
Part D: Transportation Expenses
____ __ _______ 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
Part D exclusions
_____ ______ 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.
Electronic Equipment
____ _____ includes tapes, records, discs, other media or any other accessories used with the “electronic equipment”
Electronic Media
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
Transportation Expenses
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
Other Than Collision
The PAP policy affords coverage only those who have the status of _____
insured
The PAP ___________ Part D coverage if the covered auto is destroyed or confiscated by governmental or civil authorities.
excludes
Medical Payments coverage is issued on an ___ basis to coordinate with PIP.
excess
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?
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).
Exclusions under Part D Physical Damage include all BUT which of the following?
- trailers not shown on the Declarations Page
- camper bodies shown on the Declarations Page
- rdar detectors
- awnings or cabanas used for additional living facilities
camper bodies shown on the Declarations Page
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?
You tell him that Medical Payments does cover injuries sustained if struck as a pedestrian
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?
$0
Medical Payments coverage in the PAP is excluded by all BUT which of the following:
- Racing or speed contest
- if the insured is struck as a pedestrian
- bracelet trajectory
- vehicles uses as residence
- if the insured is struck as a pedestrian
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?
6,500
Collision and upset or overturn is covered by the insured’s Collision coverage ($7,500 - $1,000).
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…
Not to worry because the PAP’s liability coverage includes a defense for her up to her policy limits
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?
$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
You advise an insured that their PAP provides supplementary payments such as bail bonds and pre-trial interest…
correctly advised that their PAP provides supplementary payments such as bail bonds and pre-trial interest
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
- property damage
- inconsideracies
- personal injury (e.g. slander)
- bodily injury
- bodily injury
A collision with an animal is normally covered by which Physical Damage coverage?
other than collision
What style of limits are available on the Personal Auto Policy (choose all that apply)?
- split
- unilateral
- single
- split & 3. single
Under the Part D insuring agreement, the company agrees to pay for _____ and ________ loss.
- direct
2. accidental
Transportation Expense coverage begins ____
hours after a loss (excluding Theft losses).
24
The PAP’s Medical Payments coverage is ______ when occupying owned automobile and ______
when occupying non-owned autos.
- primary
2. excess
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.
48
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?
2,000
Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).
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?
2,000
Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).
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?
2,000
Collision and upset or overturn is covered by the insured’s Collision coverage ($2,500 - $500).
WHAT are the insured’s duties after loss?
- Prompt notice
- forwarding legal papers
- cooperation
- submit to physical exam
- proof of loss
- uninsured motorist losses require the filing of a police report
Part E of the PAP requires the insured to report to the _______ if the loss is a hit and run or a theft claim.
police
The PAP “Policy Period and Territory” provisions state that coverage applies only to accidents and losses that occur during the policy period and within…..
- U.S., its territories, or possessions.
- Puerto Rico.
- Canada.
- Also, when a “your covered auto” is being transported between ports of these locations.
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?
- damage to vehicle and/or injuries to insured driver/occupant/pedestrian hit by a hit-and-run operator
- neither answer is correct
- both answers are correct
- stolen vehicle
- both answers are correct
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.
II. Part E of the PAP requires the insured to cooperate and to protect against any further loss.
________ ______ ______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)
Extended Non-owned Coverage
_____ ____ _____ covers for towing and costs of labor performed at the place if disablement for up to
$25, $50, $75, and $100 per disablement
Towing and Labor
_____ __ ______ ______ covers tapes, records,
and discs up to $200. Other customized equipment for pickup and vans for specified amounts
Coverage for Excluded Equipment
_____ _____ _____ provides Liability, Medical Payments, and Uninsured Motorist Bodily Injury
for those who do not own an auto
Named Non-owner Coverage
__________ covers motorhomes, motorcycles, golf carts, and allterrain vehicles
Miscellaneous
_____ ____ _____ required when the PAP covers two
or more relatives (whether or not residing together) or individuals residing together
Joint Ownership Coverage
____ ___ ___ ________ _____ —increases the $20/$600 to any limit selected by the insured
Increased Limits of Transportation Express Coverage
_____ _____—increase medical to 100% and Work Loss to 80%. The maximum amount of coverage
remains $10,000
Extended PIP
________ ___—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
Additional PIP
The Extended Non-Owned coverage endorsement provides coverage for the insured’s use of non-owned autos in _______
business
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.
200
What does the Extended Personal Injury Protection endorsement cover?
The endorsement extends PIP medical benefits to 100% and work loss benefits to 80%
WHAT is the standard rating plan used by insurance companies:
- territory
- age
- sex
- marital status
- use of vehicle
- driving record
WHAT are the discounts available?
- Mulit-car
- good grades
- Defensive Driving course
- Anti-lock brakes
- Anti-theft device
- safe driver / accident free
- mature driver
PAP rating usage categories includes which if any of the following (choose as many as apply):
- business usage
- caloric intake
- pleasure usage
- commuting (work/school usage)
- business usage
- pleasure usage
- commuting (work/school usage)
Automobiles are assigned a ______ which recognizes the value of a vehicle and its damageability.
symbol
Florida law permits an insurance company to cancel a personal auto policy within the first ____ days of a new policy for any reason.
60
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 –
- non-payment of premium.
- material misrepresentation or fraud.
- suspension or revocation of the drivers license or
registration of an operator.**
requirement for Cancellation Notice
- 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.
A cancellation notice must –
(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.
An insurer cancelling a policy is required to provide a
____ days’ notice for underwriting reasons and a ____ days’ notice for non-payment of premium.
45 days
10 days
Florida law requires the insurer to disclose full policy information to a claimant within 30 days upon a written request
Unfair Trade Practices and
Information Disclosure to Claimants
Any licensee who violates the law shall be subject to a fine in an amount not greater than $_____ for each non-willful violation.
$2,500
Any licensee who violates the law shall be subject to a fine in an amount not greater than $_____ for each willful violation.
$20,000
Unfair Trade Practices Penalties
(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.
If requested in writing by a claimant or claimant attorney, F.S. 627.4137 requires an insurer to _______ full policy information.
disclose
True or False? Motorcycle owners and operators are subject to Florida’s Financial Responsibility law.
True
True or False? There is currently no insurance requirement to register a motorcycle in Florida.
true
Acts of negligence or willful misconduct by a minor are _______ to the parent or guardian of the minor.
imputed
Parents or guardians of minors are ____ and _____ ______ with the minor for acts of the minor.
jointly & severally liable
An insured can be required to pay for the inspection; not to exceed $____
$5
Waiver for Inspection (an inspection not required if:)
- the policyholder has been insured for 2 years or longer with physical damage coverage on a policy verified by the new insurer.
- the vehicle is a new vehicle and a bill of sale, buyer’s order, or lease has been provided to the insurer.
- if the required inspection is not completed PHYSICAL DAMAGE COVERAGE CANNOT BE SUSPENDED.
- however, a claims payment can be withheld UNTIL the required inspection is completed.
Herman Hornblower, your insured, has cancelled his PAP policy. How many days does the insurer have to return Herman’s pro-rata unearned premium?
30 days
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?
You advise your client that non-windshield glass claims are compensable under the Other Than Collision coverage subject to her $250 deductible.
Florida law recalls an insurer to place an insured with a ___ days’ notice of non-renewal.
45
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?
You advise Little Richard that non-windshield glass claims are compensable under the Other Than Collision coverage subject to his $1,000 deductible.
MECHANICAL BREAKDOWN INSURANCE
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
Mechanical Breakdown Insurance Exclusions
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
An accident involving a bodily injury is a _______________ of the financial responsibility law?
trigger
PAP rating usage categories includes _____, business, and commuting
pleasure
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?
joint ownership coverage
Under the Part D insuring agreement, the company agrees to pay for _______ and accidental loss
direct
Which PAP endorsement provides liability coverage for a non-owned automobile furnished or available for the regular use of the insured.
extended non-owned coverage
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.
temporary
Medical Payments coverage provides payment without regard to fault or ____________ liability.
status
Which PAP endorsement Provides Liability coverage for a non-owned automobile furnished or available for the regular use of the insured.
extended non-owned coverage
Greg Grumble, your PAP insured, has suffered a loss. He may be required to complete an _______ under oath
examination
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?
Named non-owner coverage
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.
temporary
Medical Payments coverage provides payment without regard to fault or _____ liability.
legal
Other Than Collision coverage covers all loss not considered a Collision except those which are specifically _______.
excluded
Uninsured motorist coverage does not apply towards _____ or exemplary damages.
punitive
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?
Part D
____ ____ _____ covered perils include: water damage, glass breakage, and wind damage
other than collision
An insured injured by an uninsured motorists is entitiled to the ______ coverage for any insured vehicle of his auto policy’s UMBI coverages
broadest
Part E of the PAP requires the insured to cooperate and to _____ against any further loss.
protect
Which PAP endorsment covers equipment such as motor homes, motorcycles, gold carts and all-terrain vehicles
miscellaneous type vehicle
Uninsured motorist coverage applies if the at-fault party’s insurer is _______.
insolvent
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.
insuring agreement
Part A Liability of the PAP excludes coverage for a non-_______ user
permissive
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.
Temporary Substitute
This PAP definition refers to the named insured and resident spouse if any
You and Your
Transportation Expense coverage begins ___ hours after a Theft loss.
48
Mechanical Breakdown covers mechanical breakdown and specifically ______________ collision and specified perils.
Excludes
This PAP coverage pays to repair damage an insured has caused to another person’s vehicle or property.
Property Damage Liability
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.
Uninsured Motorists Bodily Injury
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.
Policy Period and Territory
This PAP endorsement adds Liability coverage for non-owned autos that are furnished and available for the regular use of the insured.
Extended Non-Owned Coverage
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.
Named Non-Owner Coverage
This PAP endorsement covers equipment such as motor homes, motorcycles, golf carts and all-terrain vehicles.
Miscellaneous Type Vehicle
This PAP endorsement increases PIP medical benefits from 80% to 100% and work loss benefits from 60% to 80%.
Extended Personal Injury Protection
This PAP endorsement increases the $10,000 per person maximum PIP benefit.
Additional Personal Injury Protection
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.
Personal Injury Protection
What is the PIP Death Benefit?
$5,000
What is the maximum per-person/per-occurrence PIP benefit?
$10,000
What percentage does PIP pay for medical expenses?
80%
What percentage does PIP pay for lost wages?
60%
What percentage does PIP pay for the performance of household services by other?
100%
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.
100%
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.
Tort Exemption
One limit applies to all claims for bodily injury and property damage arising from a single accident.
Single Limit
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
PART C- Uninsured Motorist (UM)
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”.
true
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?
$6,400 payout to Brenda ($8,000 injuries – $0 deductible = $8,000 X 80%)
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?
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.
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
- 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.
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?
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).
