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
