ch 3-2

Card Set Information

ch 3-2
2011-09-15 19:54:04
auto insurance

Parts of the P.A.P
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  1. "You" and "your" refer to:
    "Named insured" listed in the Declarations, the spouse in residence, members of insured's household
  2. Spouse changes residency
    • Spouse will be considered "you" and "your" under policy until the earlier of:
    • 1) 90 days after residency change
    • 2) Effective date of another policy where spouse is named insured
    • 3) End of policy period
  3. Property damage
    Physical injury to, destruction of or loss of use of tangible property
  4. "Newly aquired auto"
    Covers any personal, 4-wheel vehicle less than 10,000 lbs used for personal use beginning the date you become the owner. Must ask for coverage within 14 days unless replacing a vehicle listed in Declarations
  5. Other than physical damage for newly aquired autos
    Newly aquired auto has broadest coverage provided by policy starting on the date you become the owner. Must ask insurer to insure new auto within 14 days unless it replaces a vehicle listed in the Declarations
  6. Physical damage for newly aquired autos
    Named insured must notify the insurer of newly aquired auto and ask for physical damage coverages. Insured has 14 days if there is one vehicle in the Declarations with physical damage coverages. If not, insured has 4 days of coverage with a $500 deductible.
  7. Liability coverage
    Pays the sums the insured is legally liable to pay others for damages due to bodily injury and poperty damage caused by an auto accident. Insurer can investigate, settle and defend claims agains insured as it deems appropriate.
  8. Supplementary Payments
    Additional coverages, if used, are paid by the insurer in addition to the limits of liability. This includes defense/investigation costs, bonds, up to $200 a day for loss of earnings from trials/hearings, etc. (reasonable expenses)
  9. Borrowed vehicles
    If you borrow someone's vehicle, their insurance would act as primary coverage for a loss. Your insurance would be considered excess and would only be needed if the primary limits were exhausted
  10. P.A.P. split limit basis
    Provides a max for any one accident for any one person, a max for all persons in any one accident, and a max for all property damage related to any one accident i.e. 25/50/10 = $25,000 for one person, $50,000 for all persons in the accident and $10,000 to cover physical damage
  11. Liability coverage exclusions
    • Coverage will not cover:
    • 1) Intentional loss
    • 2) Property being transported
    • 3) Non-owned property
    • 4) Transport for a fee (taxi)
    • 5) Bodily injury to an employee
    • 6) When the car is being serviced
    • 7) Used for business
    • 8) Stolen
    • 9) Nuclear energy losses
  12. Out of state Coverage
    If the insured is involved in an accident out of state and carry liability coverage in accordance with their home state requirements, policy automatically provides whatever liability limits are required by that state
  13. Medical Payments
    Covers medical expenses incurred within 3 years of an auto related accident and funeral expenses for the insured or any "family member". Limits of liability apply per person
  14. Uninsured Motorist
    • Available by endorsement and covers damaged caused by:
    • 1) Uninsured motorists (duh!)
    • 2) Insureds who don't have the coverage required by their home state
    • 3) Hit and run drivers
    • 4) Driver whose insurer can't pay
  15. Physical Damage coverage
    Divided into "collision" and "other thn collision (comprehensive)". Provides coverage for accidental direct damage to a covered auto and non-owned autos, including their equipment
  16. Collision
    Defined as the upset of a covered auto or its impact with another vehicle or object
  17. Other than Collision (comprehesive)
    • Provides coverage for pretty much everything else except:
    • 1) Wear and tear
    • 2) Freezing
    • 3) Mechanical/electrical breakdown
    • 4) Road damage to tires
    • 5) Radioactive contamination
    • 6) Discharge of nuclear weapons/war
    • 7) No coverage for non-factory stereo/sound equipment
    • 8) Vehicles not listed under Declarations
    • 9) Losses from drag racing
  18. Company's limit of liability for a loss is the lesser of:
    • 1) Actual cash value of stolen/damaged property
    • 2) Amount needed to repair/replace the property

    If insurer and insured do not agree on loss amount, either may demand an appraisal
  19. P.A.P. requires police notification if:
    • 1) Theft of an auto
    • 2) Hit and run accident
  20. Duties after an accident or loss:
    • 1) Protect property from further damage (reimbursed)
    • 2) Notify police (hit and run or theft)
    • 3) Insurance company inspects or appraises property before its repair or disposal
  21. Liberalization Clause
    Policy changes/waivers by written endorsement only. All policy holders immediately benefit from broadened coverage with no additional charge on the date the change is implemented
  22. Auto policy cancellation/nonrenewal
    Must be written notice. 10 days notice must be given if policy is being cancelled for nonpayment or within the first 60 days of a new policy term. Otherwise, at least 20 days notice must be given
  23. Other Sources of Recovery
    Similar to "other insurance" except the insurer will pay only its share of the loss if any other source of recovery applies.
  24. No Benefit to Bailee
    Bailee cannot benefit from the insurance policy if a loss occurs while property is in bailee's possession.

    i.e. repair shop owners, parking garage employees
  25. Extended Non-Owned Liability
    Provides broader coverage for driving a non-owned vehicle, such as company cars or commercial non-owned vehicles.
  26. Named Non-Owner
    Endorsement used for people who don't own a vehicle but still wish to have their own protection while driving non-owned vehicles. Also applies for 30 days to a newly aquired auto. Each family member must be named in the endorsement schedule.
  27. No Fault Insurance
    AKA - PIP (Personal Injury Protection)

    Insurer's company pays him for certain expenses up to a specific limit. Afterwards, legal action must be taken against the person at fault for the rest of the recovery payments.
  28. Joint Ownership Endorsement
    Policy can be issued to 2 or more people who live in the same household or are related in a way other than husband and wife
  29. Customising Equipment Endorsement
    Coverage provided for vehicles such as pickup trucks or vans that have been customised or have had special equipment added.