04.04. PAP Liability Coverage

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  1. Part A provisions
    • insuring agreement
    • supplementary payments
    • exclusions
    • limit of liability
    • out of state coverage
    • financial responsibility
    • other insurance
  2. Part A - Insuring agreement
    • insurer agrees to pay damages for BI or PD for which an insured is legally responsible because of an auto accident
    • damages may include compensatory and punitive/exemplary damages
    • split limit: one limit for BI for each person, one for all persons, one for all PD, by  opposition to single-limit
    • includes prejudgement interest within policy limits
    • includes defense cost, in addition of the policy limits
  3. Part A - Persons
    • named insured and family members
    • any person using a covered auto
    • any person or organization legally responsible for the act of a covered person while using a covered auto
    • any person or organization legally responsible for a named insured or family member's use of any auto or trailer
  4. Part A - Supplementary payments
    • cost of bail bonds: up to $250
    • premiums on bonds: appeal bond guarantees that if appeal is lost, pay original amount
    • post-judgement interest
    • loss of earnings: up to $200 a day for attending a trial at the insurer's request
    • other reasonable expenses: travel and transportation, at the insurer's request
  5. Part A - Exclusions
    • excluded activities: intentional injuries, taxi (except carpool), garage, business (other than farming or ranching), racing
    • excluded property: owned or transported, rented or used
    • excluded vehicles: other vehicles owned or available for regular use, vehicles owned by family members, less than 4 wheels, off-road vehicle except non-owned golf cart
    • covers vehicle used by insured in medical emergency
    • excluded circumstances: employee injuries, unauthorized use, nuclear energy
  6. Part A - Limits of Liability
    • most use split-limit basis:
    • BI to each person
    • BI to all persons in each accident
    • PD in each accident
    • some others use single liability limit
    • limits will not be increased, regardless of # insureds / claims / vehicles involved
  7. Part A - Out of State Accident
    if other states has higher required limit, PAP automatically matches this limit
  8. Part A - Financial Responsibility
    • many states' law require insured to show proof of financial responsibility
    • PAP can be used to prove that
    • if financial responsibility law changes limit, PAP automatically provides coverage up to that new limit
  9. Part A - Other Insurance
    • insurer only pays its pro-rata share if other insurance is available on owned vehicle
    • share = damage * (insurer limit / all limits)
    • non-owned vehicle: insurer acts as excess insurance
Card Set:
04.04. PAP Liability Coverage
2013-04-06 14:13:38
Liability Coverage

Liability Coverage
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