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66 Cards in this Set
- Front
- Back
underwriting consideration for business auto insurance
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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 |
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commercial auto
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any auto that qualifies for coverage under commercial auto, business auto, garage, or trucker's policy
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auto
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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 |
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mobile equipment
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construction equipment and vehicles designed and maintained for use off publif roads (bulldozers, farm machinery. graders, rollers)
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mobile equipment endorsement
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allows mobile equipment to be insured under a general liability policy or under a commercial auot policy
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automobile insurance plans (AIPs)formerly called assigned risk plans
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residual market plans that require all vehicles to be insured under business auto coverage forms
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auto symbols
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define coveref exposures and to indicate the coverage on each
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schedule rating
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modifies class rates to reflect characteristics not reflected in those class rates
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commercial auto fleet
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consists of five or more self-propelled vehicles with one owner
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financial resposbility laws
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require motorists to prove their ability to pay for liability losses, usually by a certificate of in-force insurance
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gross vehicle weight (gvw)
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the vehicle's maximum loaded weight for a single vehicle, as specified by the manufacturer
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gross combination weight (gcw)
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the maximum loaded weight for a combination truck-tractor and semi-tractor or trailer, as specified by the manufacturer
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private passenger types (PPTs)
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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
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service use
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vehicles transport personnel, tools, and equipment to job sites (w/ minimal road exposure)
contractors vehicles usually qualify for service use |
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retail use
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vehicles make frequent stops (delivery trucks)
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commercial use
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vehicles include all other vehicles
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radius of operations
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describes the distance traveled and indicates the nature of the travel
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local distance
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describes regular operations within 50 miles
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intermediate distance
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encompasses 51 to 200 miles
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long distance
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encompasses over 200 miles
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zone rating
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applies to all trucks, truck-tractors, and trailers regularly used in long-distance, excpet light trucks and trilers used with light trucks
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regular use
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means 80% or more of the vehicle's operation
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special industry classifications aka secondary classification
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describes the insured's type of business
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the eight major special industry classifications
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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) |
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definition of truckers
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auto used to transport another's goods or materials, excluding household goods, office furniture, and fixtures and supplies
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definition of food delivery
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autos used by food manufacturers and distributors to transport raw and finished food products
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definition of specialized delivery
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auto used as armored cars or to deliver film, magazines, newspapers, mail, parcels, and similar items
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definition of waste disposal
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auto used to transport waste material for disosal or resale
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definition of farmers
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auto owned by farmers and used in farming operations
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definition of dump and transit mix trucks and trailers
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used when no other classification applies to those types of auto
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definition of contractors
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autos other than dump trucks used by contractors
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definition of not otherwised classified (NOC)
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autos that fit no other category
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what are the six underwriting characteristics associated w/ secondary classifications
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1. inadequate rates
2. excessive speed 3. extensice mileage 4. poor drivers 5. poor use or maintenance 6. hazardous goods |
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the commercial motor vehicle safety act of 1986
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requires commercial vehicle drivers to hold commercial drivers' licenses and to meet their state's training and testing standards
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commercial drivers licence
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required by any driver who operates a commercial motor vehicle
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commercial motor vehicle is defined as
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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
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a good fleet safety program addresses
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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 |
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how are commerical auto exposures much like personal auto liability exposures
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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
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automobile guest statue - (non-fare-paying guest)
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releases the driver from liability unless the plaintiff proves greater-than-ordinary negligence
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motor carrier laws
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regulate intrastate transporation of persons and property for hire
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PUC (Public Utilities Commission)
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commerical motor carriers file PUCs to preserve their operating rights
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the federal motor carrier act of 1980
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regulates interstate transportation of persons and property for hire
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DOT - Dept of Transportation
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enforces the federal motor carrier act of 1980 by requiring certain commercial motor carriers to meet financial responsibility requirements
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MCS-90
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an endorsement to their commercial auto policy, which amends the policy to comply with the act.
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in general, state and federal motor carrier laws require
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blanket coverage of all autos, set high minimum liability limits, specify endorsement wording, and require advance notice of policy cancellation
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business auto loss control methods:
Loss control reports |
costly but detailed inspection reports that evaluate the applicant's operations, drivers, vehicles, and accident records and offer loss control recommendations
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business auto loss control methods:
technical advice |
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
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business auto loss control methods:
routine safety service |
makes periodic visits to the insured to check for new hazards and compliance with loss control recommendations
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business auto loss control methods:
midterm loss cause analysis |
finds the hidden causes of an insured's accidents (poor maintenance, one poor driver) and suggests ways to improve loss experience
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physical damage coverage:
coverage |
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 |
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physical damage coverage:
valuation |
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 |
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physical damage coverage:
underwriting considerations and sources |
particular concern are age and coverage
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auto medical payments coverage
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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)
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uninsured/underinsured (UM/UIM) motorist coverage
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lets the insured collect damages from its own insurer for BI caused by UM/UIM motorists.
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personal injury protection (PIP or No-fault) - No fault laws
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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. |
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no fault law
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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.
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individual names insured endorsement
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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 |
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drive other car coverage
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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 |
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hired auto liability coverage
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covers BI and PD liability claims caused by autos leased, hired, rented, or borrowed by the insured
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the employee as lessor endorsement
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extends coverage to autos leased FROM employees
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the employee hired autos endorsement
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extends coverage to autos leased BY employees
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the hired autos specified as covered autos you own endorsement
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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
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the additional insured - lessor endorsement
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treats autos leased for six months or more as owned autos
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cost of hire
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an estimate of the amount thhe insured will spend on hiring autos
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nonownership liability coverage
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covers partners' vehicles and vehicles used by employees but not owned by the insured (using their personal cars to do insureds work)
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the employees as insureds endorsement
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extends nonownership liability coverage to employees
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