Unit 8: Personal Auto Insurance Flashcards
Casualty Coverages
- Liability
- Medical payments
- Uninsured/underinsured motorists
Property Coverages
- Collision
- Other than Collision (comprehensive)
You and your
Refer to the named insured shown in the declarations and the named insured’s spouse (must reside in same house)
Family member
Any person related to the named insured or spouse who is a resident of the named insured’s household. Includes those related by blood, marriage, or adoption and includes a ward or foster child
Bodily injury
Bodily harm, sickness, or disease, including resulting death
Occupying
- in a vehicle
- upon a vehicle
- getting into, onto, out of, or off a vehicle
Property damage
Physical injury to, destruction of, or loss of use of tangible property
Covered auto
Includes private passenger autos, which are four-wheeled motor vehicles and pickup trucks, and vans that are under a certain weight and are not used for business purposes. Vehicles must be owned or leased under a long-term contract of six months or more
Termination Provision
- Insured may cancel at any time
- Insurer must provide written notice of cancellation or nonrenewal
Policy Period and Policy Territory
Policy period: shown in the declarations; accidents and losses only applicable during this period
Policy Territory: US, its territories and possessions, Puerto Rico, and Canada
Assigned Risk Plans
- High-risk insureds
- Assigned to an insurance company
- Usually only liability coverage
Insureds
- Named insured and resident spouse
- Resident family members
- Any person who borrows a covered auto with the permission of any insured
Supplementary (Additional) Payments
BAILED
- Bonds
- Aid
- Interest on judgments or appeals
- Loss of earnings
- Expenses
- Defense attorney cost
Liability Exclusions
- Intentional injury or damage
- Injury to an insured
- Damage to property owned or transported by an insured
- Injury to an employee
- Using the vehicle as a taxi (carpool is ok)
- Using the vehicle without permission
- Vehicles less than four wheels or not licensed for road use
- Vehicles used for racing
Limits of Liability
- Split limits (separate limits for bodily injury and property damage)
- Combined single limit
- Limits vary by state
Financial Responsibility Laws
- State-required proof of ability to pay for damages
- Usually mandated auto liability insurance
Out-of-State Liability Coverage
Higher of
- policy limits
- other state’s required limits
Other Insurance
- Pro rata share
- (policy limits / total limits) x loss
- If driving a nonowned: the auto is primary coverage; insured’s policy is excess (if needed)
Medical Payments (aka First-Party Benefits)
- Covers medical and funeral expense
- No fault (insured, family and guests while occupying any vehicle)
- Occupying (in, on, or getting in, out, or off)
- Also covers insured and family as a pedestrian
Medical Payments Exclusions
- Sustained while occupying a motor vehicle with fewer than four wheels
- Sustained while using a covered auto as a public or livery conveyance
- Losses covered under workers’ compensation
- Sustained while the insured is occupying a vehicle without the reasonable belief that he is entitled to do so
- Sustained while occupying a vehicle that is being used in the insured’s business
- Sustained during prearranged racing or speed event
Limits of Liability
Single limit of liability applies to each person injured
Other Insurance
If medical bills are paid by the insureds liability policy, they will not be paid again
Uninsured Motorists
- Has no liability insurance at the time of the accident
- Has liability limits lower than the state requirements
- Is a hit-and-run driver
- Insurance company insolvent
- Insurance company denies coverage
- Uninsured driver is at fault
- Covers: insured, family, guest passenger
Subrogation
Insurance company can sue the at-fault party
Limits of Uninsured Motorists
- Can be split or combined single limit
- Usually can’t be greater than insured’s liability limits
Other Insurance
- Limited to the highest single policy limit for uninsured motorists coverage
- Prevents stacking of limits
Underinsured Motorists Coverage
- Pays when the at-fault driver has liability insurance
- Liability is less than the injured, family or guest passengers’ bodily injury
Appraisal
A settlement option regarding value of loss disputes
- Insured and insurer each select an appraiser
- Each party pays cost of its own appraiser
- Two appraisers then select an umpire
- Cost of the umpire split between the two parties
- Amount agreed upon by two out of the three is amount paid for the loss
Newly Acquired Auto
Automatically has the same coverage as current covered autos for 14 days; must be specifically added within those 14 days
Collision and Other Than Collision
For newly acquired auto
- If coverage is already on the policy, report within 14 days
- If no coverage, must request coverage within 4 days
- If loss occurs within first four days and insured has complied with notification, $500 deductible will apply
Physical Damage to Your Auto
Covers insured’s vehicle and nonowned vehicles
Collision: contact with another object; overturn
Other than Collision (Comprehensive)
- Missiles or falling objects
- Fire
- Theft or larceny
- Windstorm
- Hail, water, or flood
- Malicious mischief or vandalism
- Riot or civil commotion
- Contact with a bird or animal
- Breakage of Glass
Doesn’t cover any personal property in the vehicle
Transportation Expense
- Covers temporary transportation expenses (rental car, bus, taxi, train)
- $30/per day
- 48-hour waiting period for theft losses
- 24-hour waiting period all other type losses
Damage to Your Auto Exclusions
- Auto used as a public or livery conveyance
- Wear and tear, freezing, mechanical or electrical breakdown, or road damage to tires
- Electronic equipment that reproduces, receives, or transmits audio, visual, or data signals
- Tapes, records, disks, and other media used with electronic equipment
- Destruction or confiscation by government or civil authorities
- Custom furnishings or equipment in a pickup or van
- Radar or laser detection equipment
- Nonowned autos being used by any person engaged in an auto business
- Autos being used in a prearranged racing or speed event
Other Provisions
- The lesser of ACV, repair, or replace
- Maximum of $1,500 for damage to a nonowned trailer
- Maximum of $1,000 for electronic equipment permanently installed in an area not normally used by the manufacturer for this equipment
- Collision and OTC (comprehensive) have deductibles
- No benefit to bailee
- Insured must allow company to inspect damage
- Insured must notify police if vehicle is stolen
Personal Auto Endorsements
Joint ownership coverage
Insureds are not married or are unrelated
Personal Auto Endorsements
Towing and labor costs
- Covered auto is disabled
- Labor must be performed at the place of disablement
- Repair work is not covered
Personal Auto Endorsements
Miscellaneous type vehicles
- Motorcycles
- Scooters
- Golf carts
- Motor homes
Personal Auto Endorsements
Extended nonowned coverage
Vehicles furnished or available for regular use
- Covers insured and the family while driving nonowned autos on a regular basis
Personal Auto Endorsements
Named nonowner coverage
- Covers someone who does not own an automobile but may drive borrowed or rented autos
- Only covers the person named in the endorsement
