Personal Auto – Understanding the Definitions and Endorsements

1. Personal Auto – Understanding the Definitions and Endorsements

2. Part 1 – Understanding the Definitions

3. 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

4. Definitions Related to Coverage

5. Policy Agreement • Opens with agreements and definitions • Insurer side • Insured pays • Definitions section

6. 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

7. Insuring Agreement – Liability Coverage • Insurer must be legally responsible • Damage must be caused by accident

8. Insuring Agreement – Liability Coverage Duty to defend • Right to settle as appropriate • Defense costs

9. Minimum Limits • Defined at state level • Example

10. Definitions Related to Who is Insured

11. “You” and “Your” • Person named in declarations and resident spouse • Who is a spouse? • Changes in Insured Status

12. Family Member • How are they related? • Stepchildren and place of residence

13. Class Discussion Point • Impact of step-children

14. Any Person Using Covered Auto • Defining “your covered auto” • “Just about anyone” • Examples

15. Businesses and Organizations • Business • Organization • Any person or organization • Example

16. Definitions Related to the Auto

17. Defining “Auto” • Your covered auto • Four types of autos • Trailer and newly acquired auto vs. temporary substitute

18. Types of Autos • Owned vs. leased • Trailers • Pulled by ‘private’ auto • Not self propelled

19. Types of Autos • Temporary substitutes • PAP description

20. Types of Autos • Newly acquired auto • Automatic coverage • GVWR • Incidental to insured’s business

21. Use of Auto • Not defined • Paragraph B exclusions

22. Class Discussion Point • Use of auto

23. Occupying • Coverage can hinge on whether person was “occupying” the vehicle

24. Class Discussion Point • “Occupying” the vehicle

25. We will now take a short break before proceeding to Part 2 on Endorsements.

26. Part 2: Understanding the PAP Endorsements

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

28. Endorsements Related to Coverage

29. Single Liability Limit • Split limit • Single limit of liability

30. Underinsured Motorists Coverage • Mandate to offer coverage • Automatic definition of uninsured

31. Liability Coverage Exclusion Endorsement • Intra-family exclusion • Added back

32. 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

33. Damage to your Auto Loss Settlement Amendment • Insured doesn’t get damage repaired

34. Trip Interruption Coverage • Vehicle damage away from home • Other expenses • Coverage limitations

35. Optional Limits Transportation Expenses • Transportation expenses • Ability to purchase extra coverage • Insurer agreements

36. Loss Payable Clause • Rights gained by the loss payee when a loss occurs

37. Towing and Labor Costs Coverage • Pays an amount for a tow • Base limit $25 • Viewed as nuisance coverage • Alternatives

38. Endorsements Related to the Insured

39. 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

40. Named Non-owner Coverage • Who uses Named Non-owner Coverage? • Other uses • Insured’s child • Coverage for insured without a car • ISO rules

41. Named Non-owner Coverage • Named Non-owner Coverage vs. Extended Non-owned Coverage for Vehicles furnished or Available for Regular Use

42. Endorsements Related to the “Auto”

43. Miscellaneous Type Vehicle Endorsement • Endorsement form • Warning to the insured • Re-definition of PAP terms • Expansion of “your covered auto”

44. Miscellaneous Type Vehicle Endorsement • Expanded definition of “newly acquired auto” • Temporary substitute coverage

45. Miscellaneous Type Vehicle Endorsement • Liability coverage • Intra-family liability exclusion • Section D of the PAP

46. Miscellaneous Type Vehicle Endorsement • Other exclusions • PP 03 23 under the standard PAP • Motor home • Added third provision

47. Motor Homes • ISO rules manual • Business related motor home • ISO symbol manual • PP 03 23 and PP 03 28 • Premium increases

48. 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

49. Snowmobile Endorsement • Specific snowmobile endorsement • How snowmobile is defined • Items meeting the definition

50. 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