Underwriting Business Auto Coverage

Front 1

underwriting consideration for business auto insurance

Back 1

1. definition of a commercial auto
2. coverage activation
3. liability exposure
4. business auto loss control methods
5. phyical damage coverage
6. business auto-related coverage

Front 2

commercial auto

Back 2

any auto that qualifies for coverage under commercial auto, business auto, garage, or trucker's policy

Front 3

auto

Back 3

land motor vehicle, trailer, or semi-trailer designed for use on public roads, mopeds, motorcyles, three-wheeled vehicles, motor homes, cars, trucks, and tractor-trailer combination.
does not include mobile equipment

Front 4

mobile equipment

Back 4

construction equipment and vehicles designed and maintained for use off publif roads (bulldozers, farm machinery. graders, rollers)

Front 5

mobile equipment endorsement

Back 5

allows mobile equipment to be insured under a general liability policy or under a commercial auot policy

Front 6

automobile insurance plans (AIPs)formerly called assigned risk plans

Back 6

residual market plans that require all vehicles to be insured under business auto coverage forms

Front 7

auto symbols

Back 7

define coveref exposures and to indicate the coverage on each

Front 8

schedule rating

Back 8

modifies class rates to reflect characteristics not reflected in those class rates

Front 9

commercial auto fleet

Back 9

consists of five or more self-propelled vehicles with one owner

Front 10

financial resposbility laws

Back 10

require motorists to prove their ability to pay for liability losses, usually by a certificate of in-force insurance

Front 11

gross vehicle weight (gvw)

Back 11

the vehicle's maximum loaded weight for a single vehicle, as specified by the manufacturer

Front 12

gross combination weight (gcw)

Back 12

the maximum loaded weight for a combination truck-tractor and semi-tractor or trailer, as specified by the manufacturer

Front 13

private passenger types (PPTs)

Back 13

four-wheeled private passenger and station wagon types and nonbusiness-usage pickups, panel trucks, and vans owned by corporations, partnerships, or associations or rated as part of a fleet

Front 14

service use

Back 14

vehicles transport personnel, tools, and equipment to job sites (w/ minimal road exposure)
contractors vehicles usually qualify for service use

Front 15

retail use

Back 15

vehicles make frequent stops (delivery trucks)

Front 16

commercial use

Back 16

vehicles include all other vehicles

Front 17

radius of operations

Back 17

describes the distance traveled and indicates the nature of the travel

Front 18

local distance

Back 18

describes regular operations within 50 miles

Front 19

intermediate distance

Back 19

encompasses 51 to 200 miles

Front 20

long distance

Back 20

encompasses over 200 miles

Front 21

zone rating

Back 21

applies to all trucks, truck-tractors, and trailers regularly used in long-distance, excpet light trucks and trilers used with light trucks

Front 22

regular use

Back 22

means 80% or more of the vehicle's operation

Front 23

special industry classifications aka secondary classification

Back 23

describes the insured's type of business

Front 24

the eight major special industry classifications

Back 24

1. truckers
2. food delivery
3. specialized delivery
4. waste disposal
5. farmers
6. dump and transit mix trucks nd trailers
7. contractors
8. not otherwise classiified (NOC)

Front 25

definition of truckers

Back 25

auto used to transport another's goods or materials, excluding household goods, office furniture, and fixtures and supplies

Front 26

definition of food delivery

Back 26

autos used by food manufacturers and distributors to transport raw and finished food products

Front 27

definition of specialized delivery

Back 27

auto used as armored cars or to deliver film, magazines, newspapers, mail, parcels, and similar items

Front 28

definition of waste disposal

Back 28

auto used to transport waste material for disosal or resale

Front 29

definition of farmers

Back 29

auto owned by farmers and used in farming operations

Front 30

definition of dump and transit mix trucks and trailers

Back 30

used when no other classification applies to those types of auto

Front 31

definition of contractors

Back 31

autos other than dump trucks used by contractors

Front 32

definition of not otherwised classified (NOC)

Back 32

autos that fit no other category

Front 33

what are the six underwriting characteristics associated w/ secondary classifications

Back 33

1. inadequate rates
2. excessive speed
3. extensice mileage
4. poor drivers
5. poor use or maintenance
6. hazardous goods

Front 34

the commercial motor vehicle safety act of 1986

Back 34

requires commercial vehicle drivers to hold commercial drivers' licenses and to meet their state's training and testing standards

Front 35

commercial drivers licence

Back 35

required by any driver who operates a commercial motor vehicle

Front 36

commercial motor vehicle is defined as

Back 36

any vehicle that has a GVW or GCW of 26,001 or more pounds, transports more than 16 passengers, or transports hazardous materials in quantity

Front 37

a good fleet safety program addresses

Back 37

1. driver selection
2. driver training and motivation
3. equipment
4. accident reporting and review
5. spot checking of drivers and vehicles (or use of a 'road patrol' firm)
6. program enforcement and reinforcement
7. management's support
8. safety-consciousness of fleet supervisors

Front 38

how are commerical auto exposures much like personal auto liability exposures

Back 38

the owner, the operator, and those benefiting from the use of the auto are responsible for legal liabilities arising out of the auto's ownership, maintenance, and use

Front 39

automobile guest statue - (non-fare-paying guest)

Back 39

releases the driver from liability unless the plaintiff proves greater-than-ordinary negligence

Front 40

motor carrier laws

Back 40

regulate intrastate transporation of persons and property for hire

Front 41

PUC (Public Utilities Commission)

Back 41

commerical motor carriers file PUCs to preserve their operating rights

Front 42

the federal motor carrier act of 1980

Back 42

regulates interstate transportation of persons and property for hire

Front 43

DOT - Dept of Transportation

Back 43

enforces the federal motor carrier act of 1980 by requiring certain commercial motor carriers to meet financial responsibility requirements

Front 44

MCS-90

Back 44

an endorsement to their commercial auto policy, which amends the policy to comply with the act.

Front 45

in general, state and federal motor carrier laws require

Back 45

blanket coverage of all autos, set high minimum liability limits, specify endorsement wording, and require advance notice of policy cancellation

Front 46

business auto loss control methods:
Loss control reports

Back 46

costly but detailed inspection reports that evaluate the applicant's operations, drivers, vehicles, and accident records and offer loss control recommendations

Front 47

business auto loss control methods:
technical advice

Back 47

answers the underwriter's technical questions, such as government regulations for a certain type of operation or the possibility of structural damage to bridges from an insured's trucks

Front 48

business auto loss control methods:
routine safety service

Back 48

makes periodic visits to the insured to check for new hazards and compliance with loss control recommendations

Front 49

business auto loss control methods:
midterm loss cause analysis

Back 49

finds the hidden causes of an insured's accidents (poor maintenance, one poor driver) and suggests ways to improve loss experience

Front 50

physical damage coverage:
coverage

Back 50

collision -
pays for loss to a covered auto or its equipment caused by collision or overturn
comprehensive -
pays for loss to a covered auto or its equipment caused by any unexcluded loss except collision or overturn
specified causes of loss -
is a less broad and less expensive alternative to comprehensive coverage
towing and labor -
pays for towing and labor expenses performed at the place of disablement

Front 51

physical damage coverage:
valuation

Back 51

actual cash value (ACV) - cost new less depreciation.
the orginal cost new -
is the retail cost the orginal buyer paid for the auto and its equipment
the age group -
based on the vehicle's model year
the stated amount basis -
the value stated by the insured and agreed to by the insurer

Front 52

physical damage coverage:
underwriting considerations and sources

Back 52

particular concern are age and coverage

Front 53

auto medical payments coverage

Back 53

optional coverage that pays for medical expenses, regardless of fault, resulting from auto accidents and incurred by the occupants of the covered auto. it doesnt apply to employment-related injuries (WC does)

Front 54

uninsured/underinsured (UM/UIM) motorist coverage

Back 54

lets the insured collect damages from its own insurer for BI caused by UM/UIM motorists.

Front 55

personal injury protection (PIP or No-fault) - No fault laws

Back 55

determine if injured commercial drivers and passengers receive workers' compensation benefits

An extension of car insurance available in some states which covers medical expenses and, in some cases, lost wages and other damages. PIP pays off regardless of who is at fault and is mandatory in some states, especially those with "no-fault" laws.

Front 56

no fault law

Back 56

Legal rule in some jurisdictions (such as the US) that every individual is responsible for own injuries received in an auto accident, regardless of who is at fault. Its objective is to reduce the number of damage claims and, therefore, the cost of insurance coverage.

Front 57

individual names insured endorsement

Back 57

extends BAC coverage to the named insured and his family members when they use the vehicle for personal purposes.
this endorsement is used when the insured uses his business auto as a fqamily car

Front 58

drive other car coverage

Back 58

extends BAC coverage to named employees who lease, hire, rent, or borrow autos for their personal use.
this endorsement is appropriate to employees who do not have their own personal auto insurance

Front 59

hired auto liability coverage

Back 59

covers BI and PD liability claims caused by autos leased, hired, rented, or borrowed by the insured

Front 60

the employee as lessor endorsement

Back 60

extends coverage to autos leased FROM employees

Front 61

the employee hired autos endorsement

Back 61

extends coverage to autos leased BY employees

Front 62

the hired autos specified as covered autos you own endorsement

Back 62

defines the leased auto as an owned auto and lists the lessor as an additional insured. its used if the lessee is responsible for the insurance

Front 63

the additional insured - lessor endorsement

Back 63

treats autos leased for six months or more as owned autos

Front 64

cost of hire

Back 64

an estimate of the amount thhe insured will spend on hiring autos

Front 65

nonownership liability coverage

Back 65

covers partners' vehicles and vehicles used by employees but not owned by the insured (using their personal cars to do insureds work)

Front 66

the employees as insureds endorsement

Back 66

extends nonownership liability coverage to employees