Complete Coverage Series PAP Part A & B 2 Hour Webcast FAIA FAIA Copyright 2010

PAP Parts A & B HANG ON TO YOUR HAT!

PAP Parts A & B Insuring Agreement Supplementary Payments Exclusions Part A consists of the following:  Insuring Agreement Supplementary Payments Exclusions Limit of Liability Out of State Coverage Financial Responsibility Other Insurance

INSURING AGREEMENT We will pay damages for "bodily injury" or "property damage" for which any "insured" becomes LEGALLY RESPONSIBLE because of an auto ACCIDENT. Damages include prejudgment interest awarded against the "insured". We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgments or settlements. We have no duty to defend any suit or settle any claim for "bodily injury" or "property damage" not covered under this policy.

PAP Parts A & B Accident “sudden, unusual, fortuitous, unexpected, unforeseen or unlooked for event.”

PAP Parts A & B

PAP Parts A & B The courts have said the test is not whether the auto is the proximate cause of injury; rather, that there simply be some causal connection-some "nexus" (connection, link) between the auto and the injury-that the auto is not simply the "situs" (location) of an injury that could have occurred anywhere.

PART A Was Held To Apply

PAP Parts A & B

PAP Parts A Did Not Apply

PAP Parts A & B BUT A operates B’s car A has B’s consent and it benefits B Can be said that B is operating car. BUT If A operates B’ car with B’s consent For A’s sole purpose and no benefit to B Cannot be said B is operating the car. Henigson v. Davis

PAP Parts A & B One who is merely a passenger is not “using the auto. Auto Owners v. Jones

PAP Parts A & B Directing Truck over a ledge. Wellman-Lord Eng. v. Northwestern

PAP Parts A & B .In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgments or settlements. We have no duty to defend any suit or settle any claim for "bodily injury" or "property damage" not covered under this policy.

PAP Parts A & B “Parenthesis”

PAP Parts A & B Refers to “named insured” or insured. “You” Refers to “named insured” or insured. Also refers to spouse IF a resident of same house-hold.

PAP Parts A & B Unnamed spouse moves out of residence. How long can they wear the “You” nametag? 90 days after the move when the spouse gets another policy in his or her name the expiration date of the current policy

PAP Parts A & B bodily harm, sickness, disease, or death. “bodily injury” bodily harm, sickness, disease, or death.

PAP Parts A & B “property damage” physical injury to, destruction of, or loss of use of tangible property

PAP Parts A & B “We, us, our” All three of these refer to the insurer.

PAP Parts A & B Who is the “insured” under Part A Insuring Agreement Section B? 1. You or any “family member” for the ownership, maintenance or use of any auto or “trailer.

PAP Parts A & B “Family member” A person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child. Children that are temporarily away from home such as college are still covered under their parent’s policy.

PAP Parts A & B Who is the “insured” under Part A Insuring Agreement Section B? 2. Any person using “your covered auto”

PAP Parts A & B “Your covered auto” Those listed in the declarations. Trailers owned by the insured. Any temporary substitute auto or trailer. Newly acquired auto.

PAP Parts A & B “trailer” A trailer is designed to be pulled by a private passenger auto, pickup, or van. The definition also includes farm wagon or farm implement while being towed by the above.

PAP Parts A & B Trailer Not a trailer

PAP Parts A & B

PAP Parts A & B “Newly acquired auto” For Non-physical damage coverage (liability, Med Pay, UM) If Replacement Auto then coverage is automatically covered until policy expires If an Additional Auto then automatically covered for 14 days.

PAP Parts A & B “Newly Acquired Auto” For Physical Damage-Collision If insured has had coverage then the lowest deductible for 14 days. If insured has not had coverage then $500 deductible for 4 days.

PAP Parts A & B “Newly Acquired Auto” For Physical Damage-Other than Collision If insured has had coverage then the lowest deductible for 14 days. If insured has not had coverage then $500 deductible for 4 days.

PAP Parts A & B “Newly Acquired Auto” Number 2 under the definition states: 2. Is not used for the delivery or transportation of goods and materials unless such use is: (a)Incidental to your "business" of installing, maintaining or repairing furnishings or equipment; or (b)For farming or ranching.

PAP Parts A & B Who is the “insured” under Part A Insuring Agreement Section B? 3. Any person or organization for liability arising out of any insured’s use of the covered auto on behalf of that person or organization.

PAP Parts A & B Who is the “insured” under Part A Insuring Agreement Section B? 4. Any person or organization legally responsible for the named insured’s or family member’s use of any automobile or trailer.

PAP Parts A & B Supplementary Payments: Cost of Bail Bonds. Premiums on Appeal Bond. Interest Accruing after Judgment. $200 a day for Lost Earnings. Other Reasonable Expenses Incurred.

PAP Parts A & B Exclusions Paragraph A deals with people and organizations. Paragraph B deals with vehicles.

PAP Parts A & B Exclusions 1. Intentional injury

PAP Parts A & B Exclusions 2. Property Owned or Transported

PAP Parts A & B Exclusions 3. Care Custody, or Control

PAP Parts A & B Exclusions 4. BI to employee of insured

PAP Parts A & B Exclusions 5. Public or Livery Conveyance

PAP Parts A & B Exclusions 6. Garage Business Use

PAP Parts A & B “Business” Includes trade, profession, or occupation.

PAP Parts A & B Exclusions 7. Other Business Use

PAP Parts A & B Exclusions 8. Reasonable Belief

PAP Parts A & B Exclusions Nuclear Energy Liability Losses

PAP Parts A & B Severability o f Interests Example: Father is named insured under PAP. Son is family member. The described scenario brings into play four of the "A" series of exclusions: (1) intentionally caused damage (2) damage to property used by or in the care of son (3) use as a public or livery conveyance (4) use without permission.

PAP Parts A & B Exclusions 10. Vehicles with fewer than 4 wheels or designed for off-road use

PAP Parts A & B Exclusions 11. Other vehicles Owned by Insured or Available for Insured’s Regular Use

PAP Parts A & B Exclusions 12. Vehicles Owned by or Available for Family Members Regular Use

PAP Parts A & B “Occupying” Getting on, in, out, or off a vehicle.

PAP Parts A & B Exclusions Racing

PAP Parts A & B Limit of Liability Split limit basis Bodily Injury to each person Bodily Injury to all persons in each accident Property Damage in each accident

PAP Parts A & B LIMIT OF LIABILITY A.The limit of liability shown in the Declarations for each person for Bodily Injury Liability is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of "bodily injury" sustained by any one person in any one auto accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for Bodily Injury Liability is our maximum limit of liability for all damages for "bodily injury" resulting from any one auto accident. The limit of liability shown in the Declarations for each accident for Property Damage Liability is our maximum limit of liability for all "property damage" resulting from any one auto accident. This is the most we will pay regardless of the number of: 1."Insureds"; 2.Claims made; 3.Vehicles or premiums shown in the Declarations; or 4.Vehicles involved in the auto accident.

PAP Parts A & B Limit of Liability Paragraph B prohibits duplicate of coverage payments. If you receive under Part A then you cannot receive duplicate payments under Part B or C

PAP Parts A & B Out of State Coverage

PAP Parts A & B Financial Responsibility When this policy is certified as future proof of financial responsibility, this policy shall comply with the law to the extent required.

PAP Parts A & B OTHER INSURANCE If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own, including any vehicle while used as a temporary substitute for "your covered auto", shall be excess over any other collectible insurance.

PAP Parts A & B Review Time

PAP Parts A & B 1. All the following are true concerning the time frame when an unnamed spouse moves out of the house and looses “insured” status. A. 90 days after the move B. When the spouse gets another policy in own name. C. The expiration date of current policy. D. Signs ISO’s moving out endorsement.

PAP Parts A & B 2. For a “newly acquired auto”, the insured is covered for how many days for non physical damage coverage for an additional auto? A. 10 days B. 20 days C. 14 days D. 15 days

PAP Parts A & B 3. What is not an exclusion under Part A of the PAP? A. Care, Custody, Control. B. BI to employee of insured. C. Carpooling. D. Garage Business Use.

PAP Parts A & B Part B Medical Payments Insuring Agreement Exclusions Limit of Liability Other Insurance

PAP Parts A & B Paragraph A of Insuring Agreement Insurer agrees to pay expenses incurred within 3 years from the date of the accident The types of expenses included are Medical Surgical X-Ray Dental Funeral Expenses

PAP Parts A & B Paragraph B of Insuring Agreement 1. The “named insured” and “family members” are both covered if : Injured while “occupying” a motor vehicle OR As a pedestrian when struck by a motor vehicle designed mainly for use on public roads.

PAP Parts A & B Paragraph B of Insuring Agreement 2. Any other person while occupying a covered auto.

PAP Parts A & B Part B Exclusions 1. Vehicles with fewer than 4 wheels 2. Public or Livery Conveyance 3. Vehicle used as a residence or premises

PAP Parts A & B Part B Exclusions 4. Workers Compensation 5. Other Vehicles owned by insured or available for insured’s regular use 6.Vehicles owned by or furnished for regular use 7. Reasonable Belief 8. Vehicles used in business 9. War 10. Nuclear 11.Racing

PAP Parts A & B Paragraph A Part B Limits of Liability Stated in the declarations page, usually between $1,000 and $10,000. The limit is the maximum amount that will be paid to each injured person in a single accident, regardless of the number of insured persons, claims made, vehicles, or premiums shown on the policy or vehicles involved in an auto accident.

PAP Parts A & B Paragraph B Part B Limits of Liability Prevents duplicate payments for the same coverage under A, B, or C.

PAP Parts A & B Part B Other Insurance Pro rates payments with any other available auto med pay coverage. Excess when the insured is injured in a non owned vehicle.

PAP Parts A & B Review Time

PAP Parts A & B 1. Under Part B Medical, the insurer agrees to pay only the expenses incurred within: A. 3 years B. 2 years C. 5 years D. 10 years

PAP Parts A & B 2. Which of the following are types of expenses paid under Part B Medical?: A. X-ray B. Surgical C. Funeral D. Dental E. All of the above

UNAUTHORIZED ENTITIES For more information on unauthorized entities go to FAIA’s website at www.faia.com and under the Education section you will find a handout that you can download.

PAP Parts A & B Thanks for attending! Jeff Odom jodom@faia.com