What is the purpose of the miscellaneous type vehicle Endorsement in Personal auto policies Quizlet
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Which coverages are typically provided in a boatowners policy? Show Hull and collision Hull, running down, and protection and indemnity Property, liability, and medical payments Physical damage, liability, and medical payments -An insured vehicle being used as a public or livery conveyance. The exclusion does not apply to a share-the-expense car pool. -Damage solely a result of wear and tear, freezing, equipment breakdown, mechanical or electrical breakdown or road damage to tires. These are all maintenance issues and are excluded under other types of property insurance. -Losses due to war or nuclear hazard or radioactive contamination -Electronic equipment, unless it's permanently installed in the vehicle. Examples of electronic equipment include radios, stereos, tape decks, CD systems, navigation systems, Internet access systems, computers, telephones, televisions, two-way mobile radios, scanners, and CB radios -Tapes, records, disks, or other media used with electronic equipment -A total loss to Your Covered Auto due to destruction or confiscation or non-owned auto by government or civil authorities -A trailer, camper, or motor home if it isn't shown on the Declarations, unless the vehicle is a non-owned trailer, or is acquired during the policy period and the insured reports the purchase within 14 days -A non-owned auto when used by the insured or a family member who doesn't have a belief of entitlement to use the non-owned auto -Loss to radar and laser detection devices and equipment -Custom furnishings and equipment in any pickup/van. Custom furnishings and equipment include special carpeting and insulation, furniture or bars, height-extending roofs, and custom murals, paintings, decals, and graphics. The following items are not considered custom furnishings or equipment: any cap, bed liner, or cover in or upon any pickup. -A non-owned auto being used in the auto business -Any auto when located at a racing facility for organized racing -Under Part D if either state law or the rental agreement prevent the rental car company from recovering damages from the insured. Many insurers automatically cover a rental vehicle with the same coverage as the insured has on his/her own personal auto policy. If the insured only has liability coverage on a personal auto policy and rents a car for vacation, the rental car is not fully insured by the insured's PAP. The insured will need to fill this gap by buying the rental agency's insurance or upgrading his or her own policy. Answer: B Part D--Coverage for Damage to the Insured's Auto provides two major types of coverage: collision and other than collision (comprehensive) coverage. Other than collision (comprehensive) coverage includes fire, theft, explosion, earthquake, windstorm, missiles, falling objects, hail, water, flood, vandalism and malicious mischief, riot and civil commotion, glass breakage, and collision with birds or animals, wild or domestic. Answer: D Other than collision coverage, also known as comprehensive coverage, protects against almost all accidental damage, with the exception of coverage provided under collision. Coverage includes losses due to fire, theft, explosion, earthquake, windstorm, missiles, falling objects, hail, water, flood, vandalism and malicious mischief, riot and civil commotion, glass breakage, and collision with birds or animals, wild or domestic. Answer: B Part D-Coverage for Damage to the Insured's Auto provides other than collision (comprehensive) coverage and collision coverage. Other than collision coverage protects against almost all accidental damage, with the exception of coverage provided under collision, including fire, theft, explosion, earthquake, windstorm, missiles, falling objects, hail, water, flood, vandalism and malicious mischief, riot and civil commotion, glass breakage, and collision with birds or animals, wild or domestic. Damage from wear and tear, freezing and mechanical breakdown, and electrical breakdown (unless resulting from total theft of the auto) are excluded. Road damage to tires is also excluded.
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Kaplan Financial Education, 4th Edition Revised Terms in this set (99)Accident An event or repeated exposure to conditions, either of which unexpectedly causes injury or damage during the policy period. Actual Cash Value (ACV) Method of valuing property losses; determined by subtracting an amount for depreciation from the current replacement cost of the damaged property. Appraisal An estimate of the value of property. Arbitration Method of settling disagreements whereby a matter is submitted to a specified number of disinterested persons (arbitrators) who make a decision on the matter. Bailee One who has temporary custody of property belonging to another. Bodily Injury Bodily harm, sickness, or disease. Also called BI. Business A trade, profession, or occupation. Cancellation Termination of an insurance policy by an insured or an insurance company before its expiration date. Change Endorsement Form used to add endorsements to the personal auto policy after the policy has been issued. Class Rating Another term for manual rating. Collision The impact of a vehicle with another object or vehicle, or the upset of a vehicle. Collision Coverage One of two coverages provided by Part D of the personal auto policy. covers damage to a covered auto caused by collision with another object or vehicle, or the upset of the vehicle. Comprehensive Coverage Another term for Other than Collision Coverage. Coverage for Damage to Your Auto Part D of the personal auto policy; insures against damage to an insured auto caused by collision and other than collision losses. Also called Physical Damage Coverage.
Coverage for Damage to Your Auto Endorsement Personal auto policy endorsement that provides stated value coverage for autos that are difficult to value or worth more than their market value. Coverage for Damage to Your Auto Exclusion Endorsement Mandatory endorsement that excludes coverage for diminution of value under Part D.
Coverage Territory Geographic region where coverage is available under the personal auto policy. Includes the United States, its territories and possessions, Canada, and Puerto Rico. Coverage is also provided if the auto is damaged while being transported between these ports. Declarations Section of the personal auto policy that shows who is insured, what property is covered, when and where coverage is effective, and how much coverage applies. Deductible A dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits. Definitions Section of the personal auto policy that defines key terms used throughout the policy. Diminution of Value An actual or perceived loss in market or resale value that results from a direct, accidental loss. Drive-Through Coverage Feature of the personal auto policy that automatically provides no-fault coverage for the insured's vehicle while it is being driven in a state with a no-fault law. Duties After an Accident or Loss Part E or the personal auto policy, describes the procedures the insured must follow after an accident or loss to have a claim paid under the policy. Endorsement Form attached to the personal auto policy that modifies the policy coverage in some way. Excess Electronic Equipment Endorsement Personal auto policy endorsement that allows the insured to add coverage for tapes, records, and disks used with electronic media and increase the limit of insurance for electronic equipment that is permanently installed in an area of the auto not normally used for installing this equipment. Excess Insurance Insurance that applies only after the limits of primary insurance have been exhausted. Exclusion Property, perils, persons, or situations that are not covered by the personal auto policy. Exemplary Damages Another term for Punitive Damages Exposure A condition or situation that presents a possibility of loss. Extended Non-Owned coverage- Vehicles Furnished or Available for Regular Use Endorsement Personal auto policy endorsement that eliminates most exclusions applicable to autos that are furnished or available for the regular use of the name insured and family members. Family Immunity Doctrine Legal doctrine that prevents one family member from suing another for a loss caused by negligence. Family Member A person related to the named insured or his or her spouse by blood, marriage, or adoption who lives in the named insured's household. Financial Responsibility Laws State laws that require owners or operators of autos to provide evidence that they have funds to pay for automobile losses for which they might become liable. Finished Base Rate Rate for a specific coverage that includes the loss cost and expense base rate. General Provisions Part F of the personal auto policy; includes conditions that apply to the policy as a whole. Insurable Interest An economic interest in the safety or preservation of the subject of insurance from loss, destruction, or financial impairment. Insurance Services Office (ISO) Organization established for the benefit of its member insurance companies and other subscriber companies. ISO gathers statistics, provides loss costs, drafts policy forms and coverage provisions, and conducts inspections for rate-making purposes. Insuring Agreement Section of the insurance policy that states what losses will be indemnified, what property is covered, and which perils are insured against. Joint Ownership Coverage Endorsement Personal auto policy endorsement used to issue the policy to two or more persons who live together or relatives other than husband and wife. Law of Large Numbers Mathematical principle that states that the more examples used to develop a statistic, the more reliable the statistic will be. Liability Coverage Part A of the personal auto policy; covers damages for bodily injury or property damage for which an insured becomes legally responsible because of an auto accident. Liability Coverage Exclusion Endorsement Personal auto policy endorsement that prohibits liability coverage for victims of negligent acts committed by family members. Limit of Liability The maximum amount the insurer will pay for a particular loss. Loss Cost Factor used in figuring insurance rates that represents how much an insurance company needs to collect to cover expected losses. Loss Payable Clause Endorsement Personal auto policy endorsement used to protect the interest of a mortgagee. It states that any payments made to the insured for covered physical damage to the vehicle will be issued jointly to the insured and the loss payee listed in the endorsement. Loss Payee Party besides the insured (such as a lending institution) that has an insurable interest in the vehicle insured. Manual Rating A method of premium determination that uses rates based on collected statistics. The rates, which apply per unit of insurance, are published in manuals. Medical Payments Coverage Part B of the personal auto policy; pays medical expenses incurred in an auto accident for the insured and passengers in the insured's car. Miscellaneous Type Vehicle Endorsement Personal auto policy endorsement used to extend coverage to motorcycles, mopeds, and recreational vehicles such as motor homes and golf carts. Named Non-Owner Coverage Endorsement Personal auto policy endorsement that provides extended coverage for the use of non-owned autos to individuals who do not own a car. Negligence The failure to use the degree of care that is required by law to protect others from harm. Newly Acquired Auto Auto that the named insured obtains during the policy period. Coverage for newly acquired autos is contingent on several factors, such as the type of coverage, whether the auto is a replacement or additional vehicle, and when the insured notifies the insurer of the acquisition. No-Fault Insurance Form of automobile insurance in which each insurance company pays the damages of its own insureds, regardless of who was at fault for the accident. This has been enacted in several states. Non-Owned Vehicle An auto that is not furnished or available for the regular use of the insured or any family member. Nonrenewal Decision made by the insurance company not to extend coverage for another policy period after the current policy period expires. Occurrence An accident, including continuous or repeated exposure to substantially the same general harmful conditions. Optional Limits Transportation Expenses Coverage Endorsement Personal auto policy endorsement that allows the insured to select the daily and maximum limits of coverage provided for transportation and loss of use expenses. OTC Acronym or another term for Other than Collision Coverage Other Insurance Personal auto policy provision that describes how much the insurer will pay when more than one insurance policy or coverage applies to the same loss. Other than Collision Coverage One of two coverages provided by Part D of the personal auto policy. Covers damage to a covered auto caused by something other than a collision, such as hail, glass breakage, and theft. Also called OTC and Comprehensive. Out of State Coverage Provision of Part A--Liability coverage that modifies the personal auto policy to meet other states' financial responsibility requirements and other state laws concerning out-of-state drivers when the covered auto is being driven in that state. Also, a provision of most no-fault benefits if an insured driver from a no-fault state is involved in an accident in a state that does not have a no-fault law. Package Policy Insurance policy that contains more than one type of insurance. The personal auto policy is a package policy because it contains both property and liability coverage. Peril The cause of loss. Personal Auto Policy Easy-to-read auto policy that provides broad liability and physical damage coverage for both owned and non-owned autos that are used, maintained, or operated by the insured and his or her family. Personal Injury Protection Benefits (PIP) Type of auto insurance required by law in some states that provides coverage for basic medial expenses incurred by the insured in an accident, regardless of who was at fault. Physical Damage Coverage Another term for Coverage for Damage to Your Auto. Policy Form Document used to assemble an insurance policy that describes the policy coverages, exclusions, and conditions. Policy Jacket Document used to assemble an insurance policy that identifies the company issuing the policy. Policy Period Period of time listed in the declarations when coverage under the policy is in effect. Post-Judgment Interest Interest that accrues on a judgment after an award has been made, but before payment is made by the insurance company. Pre-Judgment Interest Interest the insured party might have earned if compensation awarded against the defendant had been received at the time of injury or damage rather than at the time of judgment. Premium Amount of money charged to provide insurance coverage. Primary Insurance When two or more coverages or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is less. Priority of Coverage Provision found in no-fault laws that specifies where an injured person obtains no-fault benefits. In states where the priority is "follow the car," the injured person obtains benefits from the insurer of the vehicle he or she was occupying or struck by. If the priority is "follow the family," the injured person obtains benefits from his or her family's auto insurance. Private Passenger Auto A four-wheel motor vehicle, other than a truck, owned or leased for at least six continuous months. Property Damage Physical Injury to, destruction of, or loss of use of tangible property. Punitive Damages Damages awarded to a plaintiff that are meant to punish the defendant for anti-social actions rather than reimburse the plaintiff for loss. Rating Factors Characteristics that differ depending on the individual risk being rated, such as the type of vehicle to be insured and the age and sex of the insured driver. For most personal auto coverages, they are used to modify the finished base rate. Self-Insurance A method for meeting the financial responsibility laws of a state whereby the insured sets aside a specified amount of money into a special insurance account. Single Liability Limit Endorsement Personal auto policy endorsement that makes the Part A limit of liability a single limit instead of a split limit. Single Limit of Liability Policy limit that applies to all bodily injury and property damage arising from a single accident. Split Limit of Liability Policy that has separate limits per person and per accident for bodily injury and a per accident limit for property damage. Stacking Adding the liability limits of all applicable coverages available to provide a higher limit of coverage. Stated Amount Insurance Insurance written to cover an item of property for a specific amount of insurance. Subrogation The transfer to the insurance company of the insured's right to collect damages from a third party. Supplementary Payments Coverages that are paid in addition to the policy's limit of liability. Examples are post-judgment interest, bond premiums, and loss of earnings. Suspension of Insurance Endorsement Personal auto policy endorsement that suspends policy coverage if the vehicle will not be driven for a certain period of time. Threshold Limits Condition of some no-fault laws that allows the insured to sue a negligent driver if the insured suffers a certain type of injury for which expenses exceed specified dollar limits. Towing and Labor Costs Coverage Endorsements Personal auto policy endorsement that pays charges incurred by the insured for towing and labor charges. Trailer Vehicle designed to be pulled by a private passenger auto, pickup, or van. Underinsured Motorists Coverage Coverage provided by endorsement that reimburses the insured for the different between the actual damages sustained for BI and the amount of liability insurance that meets the state's minimum financial requirements carried by the at-fault driver. Uninsured Motorists Coverage Part C of the personal auto policy; pays for bodily injury sustained by the insured that is caused by an uninsured motorist. Some states also require that the policy cover property damage caused by the uninsured motorist. Uninsured Motor Vehicle A vehicle that: has no liability coverage, has liability coverage that does not meet the state's financial responsibility requirement, is driven by an unidentified hit-and-run driver, or has invalid liability coverage because the insurer is insolvent or denies coverage. Your Covered Auto Vehicles listed in the policy declarations and, under certain circumstances, newly acquired autos, temporary substitute autos, and trailers. Safe Driver Insurance Plan These plans provide lower premiums for drivers who have accident-free driving records for a specified length of time and higher premiums for those who do not. Driver Training Credits Younger drivers who have completed approved driver training courses often are given a premium discount because they are usually better drivers. Good Student Discounts Good students may qualify for premium discounts because they are generally more responsible than their peers. In addition, good students spend more time studying and less time driving, thereby reducing the risk of an accident. Multicar Discounts Drivers who have more than one car insured with the company may qualify for a lower premium because having multiple autos insured on the same policy reduces the company's administrative costs. 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