Personal auto policy Flashcards
(49 cards)
Eligibility
The Personal Auto policy was designed to provide insurance for vehicles owned by one or more individuals and intended for personal use. Eligible vehicles include private passenger autos, which are four-wheeled vehicles like cars and SUVs. Passenger vans and pickups are also eligible if they meet certain gross vehicle weight requirements, usually 10,000 pounds or less. These vehicles must be owned by the named insured, but vehicles leased to the named insured are also eligible if the vehicle has been leased for a continuous period of at least 6 months.
Like other personal lines policies, incidental business use is allowed, such as making sales calls while in the vehicle. Approved incidental business use also includes delivering or transporting goods and materials for farming or ranching, and delivering or transporting goods and materials that are incidental to a business that involves installing or repairing furnishings or equipment. Making other business deliveries, carrying passengers for a fee, or any other business use would make the vehicle ineligible for Personal Auto coverage, and commercial auto insurance would be needed.
When underwriting and rating Personal Auto policies, the most important factor is who will be insured. This is primarily because the driving record of any drivers, among other factors, will determine insurability and rating categorization. Drivers with clean driving records within a certain time period are given better rates than those with less driving experience or a history of driving infractions. If an applicant is too high-risk to insure in the voluntary market, coverage may be provided by a state fund in the residual market.
Eligible private passenger autos include leased vehicles as long as the lease contract is continuous for at least how many months?
6 months
Part A
Liability coverage
Part B
Medical payments
Part C
Uninsured Motorists (UM) Coverage
Part D
Coverage for Damage to Your Auto
Part E
Duties After an Accident or Loss
Part F –
General Provisions
You and Your
The end of 90 days following the spouse’s change of residency
Bodily Injury
Bodily injury refers to bodily harm, sickness, or disease, including any resulting death.
Property Damage
Property damage is any physical injury to, destruction of, or loss of use of tangible property.
Your Covered Auto
Any vehicle shown in the Declarations
Any trailer owned by the named insured or resident spouse
A newly acquired auto
Any non-owned auto or trailer being used as a temporary substitute for a covered auto while the covered auto is unavailable for use due to breakdown, repair, servicing, loss, or destruction
Trailer
A trailer is a vehicle designed to be pulled by a private passenger auto, pickup, or van. It also means a farm wagon or farm implement while it is being towed by a private passenger auto, pickup, or van.
When Your Covered Auto is being repaired due to a covered loss, which vehicle will be considered a covered vehicle?
Temporary substitute
Newly Acquired Auto
A private passenger auto
A pickup or van with a gross vehicle weight of 10,000 pounds or less that is not used for the delivery or transportation of goods and materials, except for delivery or transportation related to farming or ranching or that which is incidental to the insured’s business of installing or repairing furnishings or equipment
Liability Coverage
When an insured obtains a newly acquired auto, that auto receives the broadest coverage that is provided to an auto already on the policy for liability coverage (Part A), medical payments (Part B), and uninsured motorists coverage (Part C). If the newly acquired auto is replacing a vehicle shown in the Declarations, this coverage begins automatically from the date of ownership without having to notify the insurer. If the auto is being added to the policy, this coverage will begin on the date the insured becomes the owner of the vehicle if the insurer is notified of the newly acquired auto within 14 days of ownership. If the auto is reported after that 14-day period, coverage will begin as of the time of the request for coverage
Physical Damage Coverage
Within 14 days after the insured becomes the owner, if the requested Part D coverage already applies to at least one auto already on the policy
Within 4 days after the insured becomes the owner, if the requested Part D coverage does not apply to any auto already on the policy. In the event that a loss occurs before notice is provided, a $500 deductible will apply.
An insured obtains a newly acquired auto that is replacing a vehicle, which is covered by a Personal Auto policy with collision coverage under Part D. If the insured wants to apply collision coverage to the new auto starting from the date of ownership, within how many days must the insured report the purchase of the new vehicle to the insurer?
14
Part A – Liability Coverage
Under a PAP’s third-party liability coverage, the insurer agrees to pay damages for bodily injury or property damage for which any insured becomes legally responsible. Damages include prejudgment interest. The insurer also agrees to settle or defend any claim or suit asking for those damages, and will pay all defense costs it incurs, without being limited by policy limits
Part A Insureds
The named insured or any family member who owns, maintains, or uses any auto or trailer, including unlicensed family members
Any person who uses Your Covered Auto with permission
For Your Covered Auto, a person or organization legally responsible for anyone covered under Part A, when the responsibility is for relevant acts or omissions by an insured
For an auto or trailer other than Your Covered Auto, any person or organization legally responsible for acts or omissions of the insured or any family member that are relevant to Part A, but only if the person or organization does not own or hire the auto or trailer
Supplementary Payments
Up to $250 for the cost of bail bonds required because of a covered accident, including related traffic law violations
Premiums on appeal bonds
Interest accrued after a judgment is rendered in any suit defended by the insurer
Up to $200 a day for the insured’s loss of earnings due to attendance of trials or hearings
Other reasonable expenses incurred at the insurer’s request
All of the following are supplementary payments under Part A - Liability Coverage, except:
Payment for all defense costs after the Part A limit is exhausted
Part A Exclusions
Many of the exclusions seen throughout all parts of a Personal Auto policy work to ensure that coverage is limited to its intended purpose—that is, coverage for the personal use of eligible vehicles.
Liability coverage is not provided for:
Any insured who intentionally causes bodily injury or property damage
Damage to property owned or being transported by an insured
Damage to property rented to, used by, or in the care of an insured, except for damage to a residence or private garage
Bodily injury to an insured’s employee during the course of employment by that insured. However, domestic employees will be covered if Workers’ Compensation is not required or available.
Liability arising out of the ownership or operation of a vehicle while it is being used as public or livery conveyance
Public conveyances provide services that are open to the general public, and livery conveyances transport people and/or property for a fee. Examples include taxi services and driving for a ride-sharing app.
This exclusion does not apply to a share-the-expense car pool, where reasonable operational costs, such as gas, are split between the vehicle’s occupants
Insureds who are employed or engaged in the business of selling, repairing, servicing, storing, road testing, or parking motor vehicles designed for use primarily on highways
An exception exists if the vehicle is being used by the named insured, their spouse, a family member, or a partner or employee of these
A Personal Auto policy will provide liability coverage for which of the following vehicles?
A non-owned golf cart
