Automobile Insurance

1
Automobile Insurance

• Lecture 10

2
Covered Auto

• Any vehicle shown in declaration
• Newly acquired auto
• Broadest coverage of any auto listed
• Additional must notify within 14 days
• Replacement notify for collision
• 4 days collision if no collision currently
• Trailer owned by the insured
• Temporary substitute vehicle

3
PAP

• Liability Coverage
• Medical payments coverage
• Uninsured motorist coverage
• Damage coverage
• Duties after loss
• General provisions

4
Liability Coverage (A)

• Insuring agreement insurer agrees to pay
  damages for bodily injury or property damage
• Split limits ex 250/500/100 means bodily
  injury of 250,000 per person and 500,000 per
  accident and 100,000 property damage
• Legal defense costs in addition to above

5
Insured Persons

• Named insured and any resident family member
• Any person using the named insureds covered auto
• Any person or organizations, for liability
  arising out of an insured persons use of a
  covered auto (using for employer)

6
Supplementary payments

• In addition to the policy limits
• 250 for cost of bail bond
• Premiums on appeal bonds
• Interest accruing after judgment
• 200 per day loss of earnings
• Other reasonable expenses (incurred at insurers
  request)

7
Exclusions

• Intentional injury
• Property owned or transported
• Property rented
• Use as public or livery conveyance
• Vehicles used in auto business
• Vehicles with lt 4 wheels
• Vehicles furnished or available

8
Out of State

• Policy automatically adjusts to comply with the
  financial responsibility or no-fault law of
  another state

9
Other Insurance

• Two auto policies cover a loss
• Each company pays pro-rata share
• Insured driving someone elses car
• Insurance on borrowed car is primary
• Insureds policy is excess

10
Medical Payments (B)

• All reasonable medical and funeral expenses
  within three years of date of accident
• Insured
• Named insured and family members while occupying
  a motor vehicle or when struck while walking
• Other persons while occupying covered auto

11
Exclusions

• Injuries sustained occupying vehicle with fewer
  than 4 wheels
• Using a public or livery conveyance
• Using as residence
• Work injuries covered by wk comp
• Using vehicle without reasonable belief of
  permission

12
Uninsured Motorist (C)

• Coverage applies when other person is at fault
  and has no liability insurance
• Insured
• Named and family members, others riding in
  covered auto, and anyone legally entitled to
  recover (surviving spouse)

13
Uninsured Vehicles

• Vehicles with no applicable bodily injury
  liability coverage
• Vehicles with less than required coverage
• Hit and run vehicles
• Vehicles where the bonding or insurance company
  is insolvent

14
Uninsured exclusions

• No uninsured motorists coverage
• Settling a claim w/o insurers consent
• Using vehicle as public or livery conveyance
• Using w/o reasonable belief of permission
• Workers comp or self-insurer

15
Underinsured motorists

• Different from un insured motorist
• Other motorist has coverage, but it is less than
  your actual damages
• Pays up to your limit
• Ex 25/50 (other motorist) you add 100
  underinsured -- 100 damage 125 damage

16
Damage to auto (D)

• Insuring agreement two optional coverages
• Collision
• Hits another car
• Dented as parked
• Other than collision named perils
• Covered autos
• Vehicle listed in declaration newly acquired
• Non-owned temporary or substitute
• Transportation expenses modestly covered for
  loss of use

17
Exclusions

• Use as public or livery conveyance
• Damage from wear and tear, etc.
• Radioactive contamination/war
• Electronic sound equipment, unless permanently
  installed
• Other electronic equipment (cell phones)

18
Exclusions

• Tapes, records, discs
• Destruction or confiscation by governmental or
  civil authority
• Loss to trailer, camper body or motor home not
  shown in declarations
• Using non-owned w/o permission
• Radar detection equipment

19
Exclusions

• Custom furnishings
• Using vehicle in racing facility
• Non-owned in auto business (ex mechanic damages
  car)

20
Limit of Liability

• Lesser of
• Actual cash value
• Cost to repair or replace
• (both less deductible)
• Other sources of recovery
• Insurer pays pro-rata share
• Non-owned part D coverage is excess insurance
  on vehicle is primary (deductible ex)

21
Duties

• Must notify insurer promptly
• Cooperate in investigation of accident and
  defense of claim
• If sued, forward legal papers to insurer
• Release medical information submit to a physical
  exam
• UM notify insurer of hit and run
• Reasonable steps to limit damage

22
General provisions

• The PAP covers only while driving in the US and
  its territories or possessions, Puerto Rico, or
  Canada
• NOT covered driving in Europe, or Mexico, for
  example
• Termination
• Cancellation insurer has 60 days then must
  insure unless premium not paid,
  misrepresentation, license revoked
• Nonrenewal must give 20 days notice