Chapter 3

Front 1

6 sections of a PAP

Back 1

A - Liability Coverage

B - Med Pay Coverage

C - Uninsured Motorist Coverage

D - Damage to Your Auto Coverage

E - Insd Duties Following Accident or Loss

F - General Provisions

Front 2

Endorsements

Back 2

adapt the policy to state-specific laws and regulations. Can also provide additional coverages that some policyholders want but others do not.

Front 3

Declarations

Back 3

personalizes each auto policy by identifying the covered parties, vehicles and policy period.

Front 4

Insurer

Back 4

dec page includes the name of the insurance company providing the coverage

Front 5

Named Insured

Back 5

person, corporation, partnership or other entity identified as an insured party in an insurance policy's declarations page.

Front 6

Policy Period

Back 6

the time during which a policy provides coverage

Front 7

Descriptions of insured autos

Back 7

includes year, make, model and VIN

Front 8

Schedule of Coverages

Back 8

indicates coverages and limits that apply to each listed auto along with the premium for each coverage. If a deductible applies for physical damage coverage, it is also listed

Front 9

Applicable Endorsements

Back 9

lists any endorsements attached to the policy.

Front 10

Leinholder

Back 10

organization that holds the title to the vehicle until the loan is paid off.

Front 11

Garage loaction

Back 11

the location where the auto is principally parked overnight

Front 12

Rating Info

Back 12

The rating class and any applicable credit and discounts may be shown. multi-car discount, good student discount, etc)

Front 13

Signature

Back 13

The signature of an authorized legal representative of the insurer is usually shown at the bottom of the declarations page with a countersignature date

Front 14

Definitions

Back 14

definitions of several words used in the policy. Designed for individuals who are not familiar with insurance terminology.

Front 15

4 classes of vehicles defined by "your covered auto"

Back 15

1. any vehicle shown in the declarations.

2. a newly acquired vehicle

3. Any trailer you own

4. Temporary substitute auto or trailer

Front 16

Newly acquired auto types

Back 16

1. private passenger auto

2. PU or van for which no other insurance policy provides coverage. must have a gross vehicle weight of 10,000 or less. cannot be used for the delivery or transportation of goods or materials.

Front 17

Stipulations for newly acquired autos

Back 17

1. additional auto is covered automatically for 14 days after NI becomes the owner. After 14 days, insd must request coverage.

2. A replacement veh is covered for the remainder of the policy period even if the insd does not ask for coverage

Front 18

Newly Acquired Auto Physical Damages

Back 18

insd that does not carry OTC or physical damage coverage on any of their vehicles rcvs automatic physical damage coverage on a newly acquired vehicle subject to $500 deductible for 4 days. The insd must request the veh and coverages be added to continue coverage past 4 days.

Front 19

collision coverage

Back 19

coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn

Front 20

OTC (comprehensive) coverage

Back 20

coverage for direct auto physical damage to a covered auto resulting from any cause of loss except collision or a cause of loss specifically excluded

Front 21

Liability coverage insuring agreement Part A

Back 21

states the insurer's duty to pay damages and defense costs and defines the persons and organizations insured under Part A

Front 22

Damages and Defense Costs covered Part A

Back 22

Insurer agrees to pay damages for BI or PD that an insd is legally responsible for because of an auto accident. Can be split or single limits. Insurer also agrees to defend the insd and pay for all legal costs even if above liability limits.

Front 23

Part A Prejudgement interest

Back 23

interest that may accrue on damages before a judgement has been rendered

Front 24

4 classes of persons insured Part A

Back 24

1. Named insd and family members

2. Any person using the name insd's covered auto

3. any person or organization legally responsible for the acts of a covered person while using a covered auto

4. any person or organization legally responsible for the named insd's family member's use of any automobile or trailer.

Front 25

Part A Supplementary payment

Back 25

Certain expenses that if paid will not reduce the limit of liability:

1. cost of bail bonds - up to $250

2. Premiums on appeal bonds or bonds to release attachments.

3. interest accruing after a judgement

4. loss of earnings because of attendance at trials

5. other reasonable expenses incurred at the insurer's request (travel/transportation expenses)

Front 26

Coverage A Exclusions

Back 26

-Intentional Injury

-property owned or transported

-property rented to, used by, or in the care of the insd

-BI to the employee of the insd

-public or livery conveyance

-garage business use

-other business use

-vehicles used without the reasonable belief of being entitled

-nuclear energy liability losses

-vehicles with fewer than 4 wheels or designed for off road use

-other vehicles owned by insd/family member or available for insd/family member regular use

-racing

Front 27

PART A Limit of liability (split and single)

Back 27

most written as split limits in this order:

-bodily injury to each person

-bodily injuries to all persons in each accident

-property damage in each acident

shown as $100/$300/$50

Some written as a single limit that applies per accident to the total of BI and PD. Show as $300,000.

Front 28

Part A Out of state coverage

Back 28

if the limits for the state where an accident occurs are higher than what the insd has, the policy automatically provides the higher limits that are required

Front 29

Part A Other Insurance

Back 29

if the insured has other applicable liability insurance on an owned veh, the insurer pays only its pro rata share of the losses, which is the proportion of the loss that the limit of liability bears to the total of all applicable limits

Front 30

Part B - Med Pay Coverage

Back 30

provides auto accident medical coverage up to a limited amt without requiring a determination of fault

Front 31

Part B Insuring agreement

Back 31

states the insurers promise to pay reasonable and necessary medical and funeral expenses incurred by and insd because of BI caused by an accident. Will only render services within 3 years of accident. Insd does not have to be legally liable for the accident.

Front 32

2 classes of insd covered under part B

Back 32

1. named insd and family members

2. any other person while occupying a covered auto

Front 33

Part B Exclusions

Back 33

-motorized vehicles with fewer than 4 wheels

-public or livery conveyance

-vehicles used as a residence or premises

-injury during the course of employment

-other veh owned by the insd/family member or available for the insds/family member regular use

-veh occupied without reasonable belief of being entitled

-BI from nuclear weapons or war

-nuclear radiation

Front 34

Part B Limit of liability

Back 34

stated in dec page. maximum amt to be paid to each injured person in a single accident, regardless of the # of persons, claims made, vehs or premiums shown on the policy or vehicles involved in the accident. typically between $1,000 and $10,000 per person.

Front 35

Part C - Uninsured motorist coverage

Back 35

intended to compensate an insd and the insd family members for injuries caused by an at-fault uninsured motorist, a hit and run driver or a driver whose insurer is insolvent.

Front 36

Part C insuring agreement

Back 36

insurer agrees to pay compensatory damages that the insd person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury cause by an accident. Punitive damages not covered. Applies only if the uninsured motorist is legally responsible for the accident

Front 37

Part C Insured Persons

Back 37

1. named insd and family members

2. any other person occupying a covered auto

3. any person legally entitled to recover damages because of BI to a person described in 1 or 2.

Front 38

Part C Exclusions

Back 38

-owned but not insured vehicle

-owned vehicle with primary UM coverage in other policy (BAP)

-claim settlement that prejudices insurer's right of recovery.

-public or livery conveyance.

-veh used without reasonable belief of being entitled.

-no benefit to WC or disability benefits insurer.

-punitive damages

Front 39

Part C Limit of Liability

Back 39

the minimum amt of UM coverage available under the PAP is set by the financial responsibility or compulsory insurance law of the state in which the insd auto is principally garaged.

Front 40

Part C Other insurance provisions

Back 40

-the total amt pd will be be no more than the highest limit of any of the policies that provide coverage.

-coverage for an accident involving a veh the NI does not own or is a temp substitute for a covered auto is provided as excess coverage over ay collectible insurance providing coverage on a primary basis.

-if the insd policy and another policy provide coverage on a primary basis, each policy contributes proportionally to the insd recovery.

-if both are excess, both provide coverage on an excess basis contributing proportionally to the insd recovery based on excess limits each policy provides.

Front 41

Part C Vehicle Types

Back 41

-no BI liability insurance or bond applies to the vehicle at the time of the accident

-a BI liability policy or bond is in force, but the limit for BI liability is less than the minimum amt required by the financial responsibility law in the state the NI veh is principally garaged.

-the vehicle is a hit and run whose operator or owner cannot be identified

-BI liability policy or bond applies, but the bonding company denies coverage or becomes insolvent

Front 42

Part C Excluded Vehicle types

Back 42

-it is owned by or furnished or available for use by you or any family member

-it is owned or operated by a self-insurer under any applicable motor vehicle law, except a self insurer that becomes insolvent.

-owned by governmental unit or agency

-operated on rails or crawler treads

-designed mainly for use off public roads while not on public roads

-located for use as a residence or premises

Front 43

Arbitration

Back 43

an alternative dispute resolution procedure that takes a dispute to an impartial 3rd party for a decision the parties agree will be final and binding.

Front 44

UM/UIM and State Variation

Back 44

most states it is possible to supplement uninsured motorist coverage with underinsured motorist coverage. important when at fault party's limits are not enough to cover damages. Some states mandate this is included.

Front 45

Limits/Damages Trigger

Back 45

something that must occur in order for damages to apply. in states that carry this, the endorsement applies when the negligent driver carries liability limits below the limits provided by the UIM coverage of the injured party.

Front 46

Stacking

Back 46

the application of two or more limits to a single auto accident. Can be from 2 different policies or the same policy. Some states allow, some do not.