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Personal Auto – Understanding the Definitions and Endorsements. Part 1 – Understanding the Definitions. Topics. In this section we will cover three main topics: Definitions related to coverage Definitions related to who is insured Definitions related to the auto.
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Personal Auto – Understanding the Definitions and Endorsements
Topics • In this section we will cover three main topics: • Definitions related to coverage • Definitions related to who is insured • Definitions related to the auto
Policy Agreement • Opens with agreements and definitions • Insurer side • Insured pays • Definitions section
Insuring Agreement – Liability Coverage Pay damages for bodily injury and/or property damage related to auto accidents • Bodily injury • Property damage • Insured must be legally responsible
Insuring Agreement – Liability Coverage • Insurer must be legally responsible • Damage must be caused by accident
Insuring Agreement – Liability Coverage Duty to defend • Right to settle as appropriate • Defense costs
Minimum Limits • Defined at state level • Example
“You” and “Your” • Person named in declarations and resident spouse • Who is a spouse? • Changes in Insured Status
Family Member • How are they related? • Stepchildren and place of residence
Class Discussion Point • Impact of step-children
Any Person Using Covered Auto • Defining “your covered auto” • “Just about anyone” • Examples
Businesses and Organizations • Business • Organization • Any person or organization • Example
Defining “Auto” • Your covered auto • Four types of autos • Trailer and newly acquired auto vs. temporary substitute
Types of Autos • Owned vs. leased • Trailers • Pulled by ‘private’ auto • Not self propelled
Types of Autos • Temporary substitutes • PAP description
Types of Autos • Newly acquired auto • Automatic coverage • GVWR • Incidental to insured’s business
Use of Auto • Not defined • Paragraph B exclusions
Class Discussion Point • Use of auto
Occupying • Coverage can hinge on whether person was “occupying” the vehicle
Class Discussion Point • “Occupying” the vehicle
We will now take a short break before proceeding to Part 2 on Endorsements.
Topics • In this section we will review endorsements as they relate to: • Coverage • Who is insured • The “Auto”
Single Liability Limit • Split limit • Single limit of liability
Underinsured Motorists Coverage • Mandate to offer coverage • Automatic definition of uninsured
Liability Coverage Exclusion Endorsement • Intra-family exclusion • Added back
Auto Loan/Lease Coverage • Upside-down lease • What vehicles are covered? • Five things not covered • Overdue payments • Penalties • Security deposits • Costs for extended warranties, insurance • Carry-over loan balances
Damage to your Auto Loss Settlement Amendment • Insured doesn’t get damage repaired
Trip Interruption Coverage • Vehicle damage away from home • Other expenses • Coverage limitations
Optional Limits Transportation Expenses • Transportation expenses • Ability to purchase extra coverage • Insurer agreements
Loss Payable Clause • Rights gained by the loss payee when a loss occurs
Towing and Labor Costs Coverage • Pays an amount for a tow • Base limit $25 • Viewed as nuisance coverage • Alternatives
Additional Insured-Lessor • Auto leasing • Lessor as an additional insured • Who owns the vehicle? • Who is liable? • Damage caused by others • Limits of liability and deductibles
Named Non-owner Coverage • Who uses Named Non-owner Coverage? • Other uses • Insured’s child • Coverage for insured without a car • ISO rules
Named Non-owner Coverage • Named Non-owner Coverage vs. Extended Non-owned Coverage for Vehicles furnished or Available for Regular Use
Miscellaneous Type Vehicle Endorsement • Endorsement form • Warning to the insured • Re-definition of PAP terms • Expansion of “your covered auto”
Miscellaneous Type Vehicle Endorsement • Expanded definition of “newly acquired auto” • Temporary substitute coverage
Miscellaneous Type Vehicle Endorsement • Liability coverage • Intra-family liability exclusion • Section D of the PAP
Miscellaneous Type Vehicle Endorsement • Other exclusions • PP 03 23 under the standard PAP • Motor home • Added third provision
Motor Homes • ISO rules manual • Business related motor home • ISO symbol manual • PP 03 23 and PP 03 28 • Premium increases
Trailer/Camper Body Coverage • When to utilize this endorsement • Physical damage coverage • Covers facilities and equipment • Endorsement’s exclusions • Loss settlement is based on smallest of three amounts • Not a substitute for homeowners or mobile home insurance
Snowmobile Endorsement • Specific snowmobile endorsement • How snowmobile is defined • Items meeting the definition
Snowmobile Endorsement: Who is covered • Covers the following as insureds: • named insured and family members • Any person using covered snowmobile • Anyone responsible for the acts of an insured • Anyone legally responsible for acts of the named insured