Unit 8 - Personal Auto Insurance Activities

personal auto policy (PAP)

policy containing property and liability coverages

you/your

used to refer to the named insured and the named insured's spouse

family member

any person related to the named insured or spouse who is a resident of the named insured's household

occupying

in a vehicle, upon a vehicle; or getting into, onto, out of, or off of a vehicle

covered auto

any vehicle listed in the declarations, private passenger autos, newly acquired autos, trailers, and any auto or trailer not owned being used as a temporary substitute

private passenger autos

four wheel motor vehicles, pickup trucks, and vans that are under 10,000 pounds of gross vehicle weight and are not used for business purposes. Must be owned or leased under a long-term contract of six months or more

newly acquired autos

private passenger auto, pickup, or van the named insured acquires during the policy period

termination provision

describes conditions for cancellation and nonrenewal

assigned risk plan/automobile insurance plan (AIP)

voluntary agreements between insurance companies that agree to share the poor risks among themselves. Usually only liability coverage.

part a - liability coverage

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

financial responsibility laws

require each driver to prove that he can pay for bodily injury or property damage liability losses arising out of auto accidents.

out-of-state coverage provision

modifies the personal auto policy to meet other states' financial responsibility requirements.

other insurance clause

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

part b - medical payments

covers reasonable expenses for necessary medical and funeral services incurred within three years of the date of the injury, regardless of fault

part c - uninsured motorists coverage

pays the insured, family, and guest passengers for bodily injury, and in some states property damage, as a result of an accident with a legally liable uninsured motorist or hit-and-run driver

uninsured motor vehicle

vehicle that has no liability coverage at the time of the accident or less than the state min., a vehicle operated by a hit-and-run driver who cannot be identified, or a vehicle that has invalid liability coverage at the time of the accident.

underinsured motorists coverage

coverage that compensates the injured when the negligent driver does not have sufficient insurance to cover damages

appraisal condition

when parties agree there is a valid claim but cannot agree on the amount they choose appraisers to settle the amount and an umpire if they disagree.

arbitration condition

used when the insurer refuses to honor and pay a claim filed by the insured.

newly acquired autos coverage

receives broadest coverage provided for any vehicle already listed for 14 days as long as the insured requests coverage within 14 days after acquiring the auto. If no coverage D, then the coverage must be requested within 4 days. If loss occurs within the 4 days, a $500 deductible applies.

part d - physical damage coverage

pays for direct and accidental loss to the named insured's covered auto or any nonowned auto for which they are responsible such as rental cars and borrowed cars. Covering collision: or other than collision (Comprehensive)

collision

the impact of an auto covered by the policy with another object or vehicle, or the upset (overturn) of a vehicle

other than collision (comprehensive)

covers almost every other type of direct, accidental loss to the vehicle that is not specifically excluded by the policy.

transportation expenses coverage (rental reimbursement)

includes any rental cars, bus fares, train fares, or cab fares for expenses needed when a covered auto or nonowned auto is undrivable due to a covered loss.

other provisions

lesser of ACV, repair or replace; max of 1500 for nonowned trailer, max of 1000 for elec. equip. perm. inst., no benefit to bailee, insured must allow the company to inspect damage, insured must notify police if vehicle is stolen

joint ownership coverage endorsement

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

towing and labor costs endorsement

reimburses the insured for towing and labor costs each time a covered auto is disabled. Labor must be performed at the place of disablement

miscellaneous type vehicle endorsement

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

extended nonowned coverage endorsement

eliminates most exclusions applicable to autos that are furnished or available for the regular use of the named insured or family members

named nonowner coverage endorsement

covers someone who does not own an automobile but may drive borrowed or rented autos. Only covers the person named in the endorsement