ExamFX (Auto Insurance)

Auto Insurance

Bailee

A person or entity that temporarily takes care of another's property under a bailment agreement, typically responsible for its safety and return.

Financial responsibility

Proof that one can pay for damages caused, often fulfilled by purchasing insurance.

Lessor

A person or entity who leases property to another under a lease agreement, with rights to receive rent and maintain possession until the lease expires.

Livery

The business of providing transportation for passengers or freight, typically involving the use of vehicles like cars or taxis.

Mutually exclusive

describes two or more events that cannot occur at the same time, where the occurrence of one event excludes the possibility of the others.

Private passenger vehicle

A type of vehicle designed primarily for transporting passengers, typically used for personal or family transportation.

Personal Auto Policy (PAP)

Insurance policy for the owners of private passenger vehicles.

The policy combines physical damage insurance with liability insurance for claims of used of the auto.

Parts of PAP

Part A - Liability coverage

Part B - Medical payments coverage

Part C - Uninsured motorist coverage

Part D - Coverage for damage to your auto

Part E - Duties after an accident or loss

Part F - General provisions

PAP provides protection under these circumstances

Legal liability (for injuries and/or property damage to others)

Injury to the insured or members of the insureds family.

Damage to or loss of the auto itself.

Bodily Injury

Physical injury to a person resulting from an accident or incident, for which the insured may be held liable.

Property damage

Physical damage to someone else's property due to an accident for which the insured may be responsible.

You and Your

Named insured shown on declarations page

Spouse of insured if a resident on the same household

If spouse resides somewhere else: will only be considered under the definition of you and your until the earlier of:

The end of 90 days following the change of residency

The effective date of another policy

The end of policy period.

Covered Auto includes

Any vehicle shown on the declarations

A newly acquired vehicle

Any trailer owned

Any auto or trailer not owned by the insured but used as a temporary substitute for a vehicle (breakdown, repair, or servicing)

Any person qualifies as an insured while using a covered vehicle as defined in Part A.

Trailer

A vehicle designed to be towed by a motor vehicle, often used to transport goods or other vehicles.

Newly acquired auto

A vehicle added to the insured's policy after the effective date, typically within a specified time frame, and often covered under existing terms.

Must be notified withing 14 days of becoming owner

If insured incurs a loss before notifying the insurer, coverage may still apply but may be limited, loss within the first 4 days and a $500 deductible will apply.

Types of Vehicle (PAP)

Private passenger auto

Pickup or van for which no other insurance provides coverage

Has a gross weight of 10,000 pounds or less.

Not used for delivery or transportation of goods and materials unless its use is incidental and does not include any vehicle used for a commercial purpose.

Not used for farming or ranching

Collision

Is the upset or impact of a covered vehicle or nonowned auto with another vehicle or object.

Other-than-collision

Missile or falling objects

Fire

Theft or larceny

Explosion or earthquake

Windstorm

Hail, water or flood

Vandalism or malicious mischief

Riot or civil commotion

contact with birds or animals

Breakage of glass

Other-than-collision is a property insurance coverage

Occupying

In, upon, getting in, on, out of, or off a vehicle

PART A - Liability coverage

Protects the insured against loss arising from legal liability when an auto is involved in an accident.

Bodily injury and property damage

Defense costs as long as the policy covers a particular loss (these costs are paid in addition to the policy limits)

Costs for settling or defending the insured as deemed appropriate (these costs end when the limits of insurance are exhausted)

In liability: an Insured is

The insured or any family memberwho resides in the same household and is covered under the policy.

Any person using an insured covered auto with permission

Supplementary Payments

Up to $250 for the cost of bail bonds

Premiums on appeal bonds and bonds to release attachments in suits covered

Interests on a judgement after the judgement has been entered

Up to $200 per day for loss of earnings for assisting in legal proceedings (attendance for hearings or trials)

Other reasonable expenses incurred at the request of the insurer

Amounts payable under supplementary payments provision are payable in addition to the liability limit.

Exclusions

Intentional injury or damage

Damage to property owned or being transported

Damage to property rented or used by the insured (except a home or private garage)

Bodily injury to an employee during the course of employment , except domestic employees not required to be covered by workers' compensation policies.

Use of vehicle as public or livery conveyance (except carpools or used for volunteer charitable purposes)

Use of a vehicle by an insured who is logged into a transportation network platform as a driver

Damage caused by any person while engaged in the business of selling, repairing, servicing, or storing vehicles.

Use of commercial-type vehicles in any business

Person using auto without permission

Person insured under a nuclear energy policy

Ownership, maintenance or use of:

Any motorized vehicle with less than 4 wheels

Any vehicle for used off public roads

Any other vehicle owned or available for regular use by the insured other than covered auto

Any vehicle owned by or furnished for regular use by a family member, other than a covered auto; the named insured is covered while maintaining or occupying vehicle

Any vehicle located inside a racing facility for the purpose of racing or speed contest

Used or designed for filght.

Limits of Liability (PAP)

Split limit

Combined single

Split limit

Coverage uses 3 dollar amounts:

1. Bodily injury for each person involved

2. Bodily injury for the entire accident (regardless of total of persons involved)

3. Property damage for each accident.

ex. $25,000/$50,000/$10,000

Combined single

Coverage providing a single limit for all bodily injury and property damage claims arising from an accident, rather than separable limits for each.

Out of State coverage

If state has higher limits of liability than limits shown in the declarations page; the insureds policy will provide the higher specified limits.

If the state has a compulsory insurance requiring a nonresident to maintain insurance whenever the vehicle is used in that state, the insured’s policy will provide at least the required minimum amounts and types of coverage.

No one is entitled to duplicate payments for the same loss.

PAP other insurance clause

If there is other insurance available to pay for a covered loss, the insurer will only pay its share for the loss. The insurer’s share is the proportion that the limit of insurance bears to the total of all available limits.

For nonowned vehicles, the insurance will be considered excess over any other collectible insurance.

Part B - Medical Payments Coverage

Coverage for medical expenses resulting from injuries sustained in an accident.

Expenses and services must be rendered within 3 years of accident.

Part B - Insured is defined as

the named insured and any family members, as well as any other person occupying the covered auto.

named insured or family member as a pedestrian if struck by a motor vehicle

Part B - Medical payments EXCLUSIONS

While occupying any of following vehicles:

Fewer than 4 wheels

Used as public livery (except carpool, or used for charitable purposes)

Used as a residence or premises

Used without permission

Used in the business of an insured (except for private pass auto, pickup or van or trailer)

Located inside a facility designed for racing or speed contest or driver skill training or event

While occupying or struck by other vehicle (other than the covered auto)

While occupying or struck by any vehicle used for flight

In the course of employment if workers compensation is required.

Other exclusions:

Nuclear weapon, war, insurrection, rebellion or revolution or by nuclear reaction, radiation, or radioactive contamination

Uninsured motorist

Coverage that protects insured drivers from losses due to accidents with drivers who do not have insurance.

Uninsured Motor Vehicle

Vehicle that does not carry the required insurance

The accident is a hit-and-run and driver cannot be identified

Bonding company or insurance company denies coverage or is insolvent.

Does not include any vehicle or equipment:

Owned or used by the insured or family members, or any vehicle with liability insurance in effect.

Owned by a self-insurer unless self-insurer becomes insolvent

Owned by a government agency

Operated on rails or crawler treads

Designed mainly for off-road use or not licensed for use on public roads.

While used as a residence or premises.

Part D - Coverage for damage to your auto

Commonly called physical damage coverage, includes both collision and other-thancollision coverage for damages to your vehicle.

Non owned auto

Auto, which is operated by or in the custody of, but is not owned or furnished for regular used of the name insured or a family member.

like a rental car, borrowed vehicle, or any other vehicle not owned by the insured that is being used temporarily.

Transportation expenses

Will be paid if the loss is caused by collision or other than collision, as long as the corresponding coverage is indicated in the declarations.

Up to $20 a day, up to a maximum of $600

Expense payments begin after a 24-hour waiting period for reasons other than theft.

In the event of theft, expenses are covered beginning after 48 hours after the theft.

Not subject to deductible and are limited to the period of time reasonable required to repair or replace covered auto.

Exclusions

See Photo

Limit of Liability

Limit of liability is the lesser of:

The ACV of the vehicle at the time of loss (which includes an adjustment for depreciation and physical condition)

The amount necessary to repair or replace the vehicle.

Non owned trailers are limited to $1500

Electronic equipment that is permanently installed in a location not normally used by the auto manufacturer is covered up to $1000

Other Provisions

Payment of loss

No benefit to the bailee

Other sources of recovery

Appraisal

Payment of loss

The insurer has the option of paying money, repairing or replacing the damage or stolen property. In addition, if a stolen property is recovered, the insurer may return the property to the insured, paying for any damage, or they keep all or part of the property at an agreed or apprised amount.

Other sources of recovery

If other insurance is applicable, the insurer will pay on a proportional basis. Coverage for any non-owned auto is excess of any other collectible source which includes insurance and any other source of recovery available to the owner of the non owned auto

Appraisal

If the insured and the insurer cannot agree on a settlement. either party can demand appraisal. Each party will then select and pay for its own appraiser. The appraiser in turn, will jointly select a third appraiser, called an umpire. The decision reached by at least 2 of the appraisers will be binding on both parties.

Part E- Duties After An Accident or Loss

Prompt notification of loss

Cooperating with the insurer

Forwarding any legal paper received

Submitting to a physical exam, examination under oath when requested, and recorded statements

Allowing the insurer access to medical records

Submitting a proof of loss

Notifying the police of a hi-and-run accident or a vehicle is stolen

Protecting the property from further loss

Allowing the insurer to inspect and appraise the damaged property.

Par F - General Provisions

Bankruptcy

Policy changes (only by endorsement)

Fraud

Legal action against the insurer

Insurer right to recover payment (subrogation)

Policy period and territory (USA, PR, or Canada)

Termination

Transfer of insured’s interest in the policy (assignment)

Two or more auto policies

Termination

The insurer is required to provide 10 days’ notice if for nonpayment of premium or if the policy is cancelled within the first 60 days of initial coverage

20 days’ notice for all other reasons.

If the policy has been in effect for more than 60 days, the insurer can only cancel because of nonpayment of premium, if an insurers driver’s license has been suspended or revoked, or if policy was obtained through material misrepresentation.

If the insurer decides to nonrenew coverage, the insured must provide at least 20 days’ notice before renewal date.

If the insured obtains other insurance on a covered auto, the policy will terminate on the effective date of the new policy.

Selected Endoresements

Towing and labor costs (basic limit of $25) higher limits available for additional premium

Miscellaneous type vehicle (motorcycles, motor homes, golf carts, dune buggies, other recreational vehicles) Coverage not provided for vehicles borrowed or rented unless temporary substitute.

Named Nonowner (coverage for individuals who do not own a car, but borrow or rent cars as needed. coverage is considered excess and is only for individual named on endorsement) Physical damage coverage usually not provided

Rental reimbursement (only in the US, territories, and Canada) Rental agreement no longer than 30 continuous days

Joint ownership coverage (individuals other than spouses, who reside in the same household and nonresident relatives. Vehicle must be listed in the endorsement and will not be extended to any vehicle owned by any party that is not listed or included.

(LAWS) Required limits of liability in New York

$25,000 for bodily injury, or $50,000 for death of one person as a result of any one accident.

$50,000 for bodily injury or $100,000 for death of 2 or more persons

$10,000 for destruction of property damage

Required proof of insurance

Policy of liability insurance

A financial security bond

A financial security deposit

Qualification as a self-insurer

Transportation network company(TNC)

A company that connects passengers with drivers through an app or platform, providing ride-sharing services.

Ex. Uber or Lyft

In New York, TNC’s may not operated without obtaining a license from the Dept. of Financial Services. Must also comply with financial responsibility requirements set by regulatory authorities.

$75,000 for bodily injury/death to any one person per accident

$150,000 for bodily injury/death to 2 or more persons per accident

$25,000 for property damage per accident.

While engaged in a pre-arranged trip $1,250,000 for bodily injury/death of one or multiple persons or property damage per accident

Within 15 days of filing a claim, a TNC and respective insurer must provide relevant information to involved parties. This includes times the TNC driver was logged into the TNC digital network, occurring 12 hours before or after the accident, description of coverage, exclusions, and motor vehicle insurance limits. Furthermore, all TNC trip records must be maintained for a period of at least 6 years.

TNC not hired applicants

Under 19 years of age

Does not possess a valid driver's license

Does not possess proof of auto liability insurance used for TNC prearranged trips.

Is a match in the US Dept. of Justice National Sex Offender public website.

Is listed in the Sex offender registry.

Insurance Information and Enforcement System (IIES)

IIES is a database started to monitor the insurance status of vehicles registered in NY with the goal of identifying, sanctioning and eventually removing uninsured and vehicles from the road.

Insurer must notify the Commissioner of State Dept. of Motor Vehicles within 30 days of an insurance policy termination, whether it was cancellation or nonrenewal.

Not required if policy was replaced by another insurance contract.

Or insured surrendered the registration certificate or number plates before contract ended.

New York Automobile Insurance Plan (Assigned Risk)

To provide insurance for applicants who are unable to obtain it through ordinary methods.

Eligibility:

Must have valid drivers license,

Must be able to purchase insurance in the normal market

Coverage:

$50,000 for bodily injury/death for 1 person per accident

$100,000 for bodily injury/death for 2 or more persons per accident

$10,000 for property damage

Up to $10,000 ACV to automobile insured on the policy with a deductible of no less than $100

Medical payments up to $1000 because of bodily injury or death to any person insured.

Supplementary uninsured motorist insurance

Binding authority

See photo

Comprehensive Motor Vehicle Insurance Reparation Act (PIP)

Personal Injury Protection (PIP)

Requires motorist to carry first party coverage for basic economic loss with an aggregate limit of $50,000 per person for:

Notice of Claim (minus 20% of lost earning, social security disability benefits, workers compensation, amounts deductible under the applicable insurance policy) Must be paid within 30 days after proof of loss. After 30 days payment would be considered overdue and will start accruing an interest rate of 2% per month

Medical (within 1 year or accident)

Rehabilitation

Loss of earnings (up to $2000 per month and no more than 3 years)

Funeral (up to $2000)

Substitution services

Tort limitation or verbal threshold (within 2 years of accident)

Optional Coverages (OBEL)

Optional Basic Economic Loss (OBEL) offers an additional $25,000 of coverage for injuries or lost wages that are incurred due to a serious accident.

When coverage is put in place, the owner of OBEL policy chooses which out-of-pocket expenses would be covered under the policy.

Additional PIP

Policy owners in NY also have the option of purchasing additional Personal Injury Protection in the amount of $50,000, raising the total PIP to $100,000

See photo

Motor Vehicle Accident Indemnification Corporation Act

Purpose:

To fill in gaps in coverage for victims of motor vehicle accidents without adequate insurance. This act ensures that individuals can receive compensation for injuries sustained in accidents.

Membership:

Every insurer who is authorized to write motor vehicle insurance in NY must join

Board of Directors:

9 members, 7 of whom are representatives of motor vehicle liability insurers. They will not be compensated and will be elected by the members of the corporation. In addition, the Superintendent will appoint 2 directors as representing broad segments of the public, 1 as a licensed insurance agent or broker and 1 who has no affiliation with insurers or insurance agents.

Each director serves for a term of 2 years

Powers of the Corporation:

see photo

Assessment against Members:

If Board decides that they require funds to continue operating, the board can levy an assessment against the members of the corporation. Each member will be liable to pay a portion of the assessment based on the total number of policies.

Notice of Claim: