Auto Insurance

Front 1

What is the purpose of Financial Responsibility Law?

Back 1

To protect automobile victims.

Front 2

What does P.A.P. stand for?

Back 2

Personal Auto Policy

Front 3

What does Coverage Part A stand for?

Back 3

Personal Liability

Front 4

What are the two ways you can have Coverage Part A?

Back 4

Split Limits or Combine Single Limit

Front 5

What do the first two parts in Split Limit apply to?

Example: 15/30/10

Back 5

Body Injury (BI)

Front 6

What does the last part in Split Limit apply to?

Example: 15/30/10

Back 6

Property Damage (PD)

Front 7

In the Split Limit example of 15/30/10, what does the 15 stand for?

Back 7

It stands for Body Injury (BI) and per person

Front 8

In the Split Limit example of 15/30/10, what does the 30 stand for?

Back 8

It stands for Body Injury (BI) and per occurrence.

Front 9

In the Split Limit example of 15/30/10, what does the 10 stand for?

Back 9

It stands for the Property Damage (PD) and per occurrence.

Front 10

What is it called by the state if you have Split Limit?

Back 10

Access Limits

Front 11

You could have avoided this by buying _________ _________ (higher-than-required limits) for a slightly higher premium.

Back 11

Excess Limits

Front 12

What is the minimum requirement that you must have if you have a Combined Single Limit policy?

Back 12

$40,000

Front 13

What does C.S.L. stand for?

Back 13

Combine Single Limit

Front 14

Most Auto Liability policies are sold with Split Limits, However some insurers also offer _________ _________ __________ policies.

Back 14

Combine Single Limit

Front 15

A CSL is written with just _____ policy limit that applies to BI and PD together.

Back 15

One

Front 16

CSL plicy would need a minimum Liability policy limit of $40,000 to be the equivalent of a $15/$30/$10 _________ _________ policy.

Back 16

Split Limit

Front 17

CSL policies are better from the client's point of view, but they also _______ more and not all insurers offer them.

Back 17

Cost

Front 18

Auto Insurance Consideration. What are the Three Major Factors that define individual auto insurance policies?

Back 18

Rates, Underwriting, Coverage

Front 19

What all are considered for the Rates Factor?

Back 19

Rates Classification based on age, gender, driving record, and territory.

Front 20

Driving record is a major factor, as well. The worse the driving record, the _________ ______ _______.

Back 20

Higher the rates

Front 21

Most insurance companies have established __________ ____________ to be followed strictly by their agents in placing new Auto insurance policies with the company.

Back 21

Underwriting Rules

Front 22

For example, the underwriter may order a copy of the applicant's _________ ________ ________ to verify the applicant's stated driving record.

Back 22

Motor Vehicle Report (MVR)

Front 23

Underwriter may also order a __________ _________ _______ to verify employment or the character of the applicant. (Of course, when ordering this type of report, the underwriter must conform to all state and federal regulations under the _________ __________ ________ Act.)

Back 23

Consumer Investigative Report

Fair Credit Reporting

Front 24

It is important to note that unless a state exam question says otherwise, you should assume that the test question is asking about the __________ _________ __________, NOT the Commercial Auto Policy.

Back 24

Personal Auto Policy (PAP)

Front 25

What is the Structure of the Personal Auto Policy (PAP)

Back 25

Part A - Liability

Part B - Medical Payments

Part C - Uninsured Motorists

Part D - Damage to Your Auto

Part E - Duties After an Accident

Part F - General Provisions

Front 26

What is Part A - Liability?

Back 26

The insurer will pay, up to the policy limits, for BI or PD to others, caused by any driver of a vehicle insured under the policy.

Front 27

What is Part B - Medical Payments?

Back 27

Pays medical and funeral expenses resulting from a covered event causing Bodily Injury to you and your passengers.

Front 28

What is Part C - Uninsured Motorists?

Back 28

Covers Bodily Injury to an insured caused by the owner or operator of an at fault uninsured vehicle.

Front 29

What is Part D - Damage to Your Auto?

Back 29

Covers your insured vehicle for damage by "Collision" and or "Other Than Collision," if either or both are declared.

Front 30

What is Part E - Duties After an Accident?

Back 30

Insured must notify the insurer as soon as possible after loss and must cooperate with insurer's investigation.

Front 31

What is Part F - General Provisions?

Back 31

Lays out various legal and financial obligations relating to both insurer and insured.

Front 32

The ______________ ___________ tells who is insured, what type of property (auto) is insured, the policy limits and the policy period.

Back 32

Declarations Page

Front 33

What does UM stand for?

Back 33

Uninsured Motorist

Front 34

What does UIM stand for?

Back 34

Under Insured Motorist

Front 35

Coverage A pays out to ________.

Back 35

Others

Front 36

Coverage C pays out to ________.

Back 36

You

Front 37

Coverage C only covers ________ _________ only!

Back 37

Bodily Injury (BI)

Front 38

What two parts are in Coverage D?

Back 38

Collision and Other Than Collision or Comprehensive.

Front 39

What is an example of Other Than Collision or Comprehensive.

Back 39

Hitting a deer.

Someone Keys Your Car.

A Rock hits you window.

Front 40

Part A - Liability Coverage

_________ _ _______ ________: Although the Insuring Agreement is a brief clause, it includes very broad coverage.

Back 40

Part A Insuring Agreement

Front 41

We will pay damages for "________ ________" or "_________ ________" for which any "Insured" becomes legally responsible because of an auto accident.

Back 41

Bodily Injury (BI) or Property Damage (PD)

Front 42

According to the PAP definition, what does "Bodily Injury (BI)" mean?

Back 42

Bodily harm, Sickness or disease, including death that may result.

Front 43

According to the PAP definition, what does "Property Damage (PD)" mean?

Back 43

Physical injury to, destruction of, or loss of use of tangible property.

Front 44

The term "insured," however, is defined as:

Back 44

- "You" (the named insured or spouse) or and "family member" involved in the ownership, maintenance, or use of any auto or trailer

- Any person using any "covered auto" (as defined in the Definitions section)

-For a "covered auto", any person or organization but only with respect to legal responsibility for acts or omissions of a person covered by the policy.

Front 45

__________ __________ is defined as a person related to you by blood, marriage, or adoption who is a resident of your household, including a ward or foster child.

Back 45

Family Member

Front 46

How do we know what a "covered auto" is? According to the Definitions, it is:

Back 46

Any Vehicle shown on the Declarations Page.

Front 47

Except for collision and other than collision coverages, any additional auto newly acquried during the policy period is covered right away for the broadest liability coverage provided for any vehicle already shown in the declarations as long as you add it to the policy within ____ days.

Back 47

14

Front 48

Except for collision and other than collision coverages, if a newly acquired vehicle replaces a vehicle already shown in the declarations, ________ _________ is automatically provided without you having to add it to the policy.

Back 48

Liability Coverage

Front 49

For collisions and other than collision coverages for a newly acquired auto, coverage begins on the date you become the owner. The newly acquired auto will have the broadest physical damage coverage currently provided for any auto shown in the declarations, provided you add the newly acquired auto to your policy within _____ _____.

Back 49

14 days

Front 50

Any _________ you own (automatic Liability coverage, does not need to be declared)

Back 50

Trailer

Front 51

Any ___________ vehicle used as a temporary substitute for any other vehicle described above that is out of normal use due to breakdown, repair, servicing, loss, or destruction (such as a loaner from a dealer while you car is being repaired)

Back 51

Non-owned

Front 52

However, if none of the vehicles currently shown in the declarations have physical damage coverage, you must report the newly acquired auto within __ days of the time you become the owner in order for collision and other than collision coverages to apply.

Back 52

4 days

Front 53

The Part A Insuring Agreement, also says:

Back 53

We will settle or defend... any claim or suit... In addition to our limit of liability, we will pay all defense costs we incur.

Front 54

Cost of defense is in addition to the limits, but is not ____________ ___________.

Back 54

Supplementary Payments

Front 55

Part A Supplementary Payments

Back 55

Several Auto Liability Supplementary Payments are included in the PAP at no extra premium charge, and they are in addition to the policy limit.

Front 56

The policy will pay up to $250 for the cost of Bail Bonds required because of an accident that results in BI or PD covered by the policy, including those for related traffic-law violations. Remember, this clause pays just the cost of the Bail Bond, not the traffic fines involved.

Back 56

Bail Bonds

Front 57

The policy will pay the premiums on Appeal Bonds and interest accruing after a judgment is entered in any suit the insurance company defends on your behalf.

Back 57

Appeal Bonds and Interest

Front 58

The company will pay up to $200 per day for your lost earnings if it requires you attendance at hearings or trials. It will not pay for other income you lose, but will pay other reasonable expenses you incur at its request.

Back 58

Loss of Earnings

Front 59

Part A Supplementary Payments are what?

Back 59

-Bail Bonds (up to $250)

-Appeal Bonds and Interest

-Loss of Earnings (up to $200 per day)

Front 60

Part A Exclusions:

Back 60

Like all policies, Auto Liability has Exclusions, things that are never covered.

Front 61

Part A Exclusions are what?

Back 61

-Intentional Acts

-Your Own Property In Transit

-Injury to Employees

-Taxi or Livery

-Auto Business

-Commercial Usage

-Using a Vehicle Without Permission

-Non-owned Vehicle Furnished for your regular use

Front 62

Part A Out-Of-State Coverage:

Back 62

The PAP has a provision that states it will automatically conform to the state laws of any state in which you happen to be driving.

Front 63

Part A Financial Responsibility:

Back 63

The PAP is acceptable as Proof of Financial Responsibility in all states.

Front 64

Part B - Medical Payments Coverage

Part B Insuring Agreement:

Back 64

Auto Medical is an optional coverage.

Front 65

Reasonable expenses incurred, within three years from the date of the accident, for necessary medical and funeral services because of "bodily injury:"

Back 65

1. Caused by Accident; and

2. Sustained by an "Insured"

Front 66

The Insuring Agreement goes on to define "insured" in "Part B" as:

Back 66

1. The named insured, spouse, or any family member while occupying, or as a pedestrian when struck by, a motor vehicle "designed for use mainly on public roads" (not necessarily one insured by the policy) or by a trailer.

2. Any other person who is occupying a covered auto.

Front 67

Part B Exclusions:

Back 67

Most of the Exclusions in Part B are similar to those in Part A.

Front 68

Part B Limits of Liablility:

Back 68

Policy Limits on Auto Medical are usually fairly low, such as $5,000 per person.

Front 69

Part C Insuring Agreement:

Back 69

Uninsured Motorist Coverage may be optional or mandatory, depending up the state. It also covers you the the event you are injured by a hit-and-run driver.

Front 70

The Insuring Agreement for Part C says, in part:

Back 70

We will pay damages which an "insured" is legally entitled to recover from the owner or operator of an "uninsured motor vehicle" because of "bodily injury"

Front 71

(Part C) The "insured" in this case is you or a family member or any other person occupying your covered auto. The PAP defines an "uninsured motor vehicle" as a land motor vehicle of any type:

Back 71

1. To which no BI Liability policy applies at the time of the accident

2. To which a BI Liability policy does apply but is written for lower limits than those specified by the Financial Responsibility law of the state.

3. That is a hit-and-run vehicle whose operator or owner cannot be identified.

4. To which a BI Liability policy applies, but the insurer either denies coverage or is insolvent.

Front 72

Remember that Coverage Part _____ covers Bodily Injury Only. It does not cover damage done to your car by the uninsured motorist.

Back 72

Part C

Front 73

(Part D - Coverage for damage to your auto)

Part D Insuring Agreement:

Back 73

Sometimes called Full Coverage or Comprehensive and Collision, this optional coverage is purchased to protect your own car.

Front 74

What is Collision?

Back 74

Means to upset of "your covered auto" or its impact with another vehicle or object. Loss covered by the following is considered other than "collision:"

Front 75

What 10 items considered Other Than Collision, which include:

Back 75

1.Missiles or falling objects

2. Fire

3.Theft or larceny

4.Explosion or earthquake

5. Windstorm

6.Hail, water, or flood

7. Malicious mischief or vandalism

8. Riot or civil commotion

9. Contact with bird or animal

10. Breakage of glass

Front 76

Other Than Collision is consider an _______ ________ coverage.

Back 76

All-Risk

Front 77

Part D Transportation Expenses:

Back 77

An important Additional Coverage under Part D is for Transportation Expenses incurred by you in the event of "total theft" of your covered auto. Coverage does not begin until 48 hours after the theft and it ends a maximum of 30 days later, by which time your car will either be recovered or presumed permanently missing. $20 per day Max of $600

Front 78

Part D Exclusions:

Back 78

The list of Exclusions for Part D is extensive. It consists of "wear and tear" types of loss, items not permanently installed, freezing of the engine block, mechanical or electrical breakdown and road damage to tires.

Front 79

Part D Limit of Liability:

Back 79

If a claim occurs under Part D, the company has the option of paying the ACV (Actual Cash Value) of the stolen or damaged property or repairing or replacing the car, whichever is cheaper for the insurance company.

Front 80

Part E of the PAP specifies the ________________________________. This part requires that Notice of Claim be filed promptly and that the insured cooperate in the investigation, settlement, or defense of any claim or suit.

Back 80

duties of the insured after a loss.

Front 81

Part E also requires the insured to notify the police promptly if theft or a hit-and-run driver is involved, and to take reasonable steps after a loss to protect the covered auto from further loss. These duties are actually _____________ contained in the policy.

Back 81

Condtions

Front 82

Part F of the PAP contains ___________ ____________, such as the Policy Territory, which is specified as the United States, its territories and possessions, Puerto Rico, and Canada. The policy also applies to losses involving the covered auto while it is being transported between ports therof.

Back 82

General Provsions

Front 83

If the cancellation is for nonpayment of premium, the insured must be given at least ____ ____ .

Back 83

10 Days Notice

Front 84

For _______________ or any cancellation except for nonpayment, more notice is generally required. Of course, the insured may cancel at any time, by giving advance written notice or by returning the policy to the insurance company.

Back 84

Non-renewal

Front 85

What are the different PAP Endorsements?

Back 85

1. Named Nonowner

2. Miscellaneous-Type Vehicles

3. Towing and Labor

4. Mexico Coverage

5. Extended Non-owned Auto Coverage for a Named Individual

6. Joint Ownership Coverage