Personal Auto – Understanding the Definitions and Endorsements

Part 1 – Understanding the Definitions

Topics In this section we will cover three main topics: 1.Definitions related to coverage 2.Definitions related to who is insured 3.Definitions related to the auto

Definitions Related to Coverage

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

Definitions Related to Who is Insured

“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

Definitions Related to the Auto

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.

Part 2: Understanding the PAP Endorsements

Topics In this section we will review endorsements as they relate to: 1.Coverage 2.Who is insured 3.The “Auto”

Endorsements Related to Coverage

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 1.Overdue payments 2.Penalties 3.Security deposits 4.Costs for extended warranties, insurance 5.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

Endorsements Related to the Insured

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

Endorsements Related to the “Auto”

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 under the standard PAP Motor home Added third provision

Motor Homes ISO rules manual Business related motor home ISO symbol manual PP and PP 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

Snowmobile Endorsement: Liability & Medical Liability coverage & medical payments Who has coverage?

Non-Owned Coverage: Available for Regular Use Covered Persons Excluded Autos Liability Coverage Medical Payments Coverage Rating

PP 03 06: Business Use Business Use Employee negligence

Customizing Equipment Coverage Customized equipment PP compared to PP Amount for each item

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