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RMI 3011 Professor McHugh Test 3 Review The test will be 30 multiple choice question 40 minutes s Manage your time carefully it will be fair and representative of class lectures Auto PAP Personal Auto Policy Who is covered slide a 5 o Liability coverage applies to The named insured and any resident family member Any person using the named insured s covered auto Any person or organization legally responsible for any insured s use of a covered auto on behalf of that person or organization Any person or organization legally responsible for the named insured s or family members use of any auto or trailer other than a covered auto or one owned by the person or organization Auto know split limits slide a 4 o The coverage is usually written in split limits where the amounts of insurance for bodily injury liability and property damage liability are state separately o Split limits of 250 500 100 mean that you have bodily injury coverage of 250 000 for each person a maximum of 500 000 of bodily injury coverage per accident and a maximum of 100 000 for property damage liability Auto uninsured motorist o Uninsured motorists coverage pays for the bodily injury caused by an uninsured motorist by a hit and run driver or by a negligent driver whose insurance company is insolvent In some states property damage is also covered The uninsured motorist is legally liable o The coverage applies to The named insured and family members Another person while occupying a covered auto Any person legally entitled to recover damages o Coverage does not apply when An insured is injured in or by a vehicle owned by the named insured but not insured under the policy There is primary coverage under another policy The vehicle is used as a public livery or conveyance When workers compensation benefits are applicable o There are several limitations when more than one uninsured motorist coverage provision applies to a lost For example if an insurer provides coverage on a vehicle not owned by the named insured the insurance provided is excess over any collectible insurance provided on a primary bases o Underinsured motorists coverage can be added to the PAP to provide more complete protection In general the maximum amount paid is the underinsured motorist s coverage limit stated in the policy less the amount paid by the negligent driver s insurer Coverage is typically added as an endorsement Some states make coverage mandatory while others make it optional Auto constructive total loss o For a total loss the policy pays the actual cash value less the deductible o For a partial loss the policy pays only the amount necessary to repair or replace the damaged property of like kind and quality o Insurers can add a clarifying endorsement to exclude coverage for diminution in value from a direct and accidental physical damage loss The insured can also purchase gap insurance Auto tips for shopping for auto insurance o Insurers use a variety of factors to establish auto insurance premiums including o Auto Cost of Auto Insurance Ch 19 p 475 o Auto insurance rates have increased in recent years due to Rising medical and motor vehicle repair costs Soaring jury awards in liability cases Insurance fraud and abuse Age gender and marital status Territory Use of the auto Driver education and individual driving record Number and types of cars Insurance score Health problems with US health care system o Problem 1 Rising Health Care Expenditures Health care expenditures in the US have increased substantially over time and are growing faster than the national economy Estimated national health expenditures totaled just over 2 8 trillion in 2012 or 17 6 percent of the nation s GDP More than one in six dollars of the nation s income is spent on health care o Problem 2 Many people do not have health insurance coverage 49 9 million people or 16 3 of the US population had no health insurance coverage in 2010 Foreign born Groups with large number of uninsured include Hispanics Blacks and Asians Many people are uninsured because the coverage is not affordable Many low income people who are eligible for Medicaid are not aware they are eligible Young adults Low income households o Problem 3 Uneven quality of Medical care The quality of care has improved over time The quality of medical care varies widely depending on geographic location type of health insurance plan and disease being treated o Problem 4 Waste and inefficiencies Experts estimate that the present system wastes more than 800 billion each year Sources of wasteful spending include Duplication of tests Medical errors that are largely preventable Unnecessary tests due to fear of lawsuits High administrative costs and excessive and redundant paperwork Hospitalizations for preventable conditions Overuse of expensive medical technology Readmissions into hospitals because of inadequate or ineffective initial treatment o Problem 5 Defects in Financing Health care Critics argue that the financing of the present system aggravates many of the problems Defects of the current system include It is based on the ability to pay not health needs The fee for service method encourages unnecessary tests and treatments Distortions in medical care which result from a limited supply of physicians in general practice and in rural areas o Problem 6 Abusive Insurer Practices Some insurer practices are harmful to both policyholders and applicants for insurance Examples include Exclusions for preexisting conditions Rescission of insurance contracts to limit benefits Lifetime or annual limits on benefits Health ACA Obamacare individual and employer mandate o Individual mandate Beginning in 2014 most citizens and legal residents must have qualifying health insurance or pay a financial penalty The new law also provides premium tax credits so that eligible individuals can purchase affordable health insurance and comply with the law Certain groups are exempt o Employer Mandate Originally set to begin in 2014 will be delayed until 2015 2016 The ObamaCare employer mandate is a requirement that all businesses with over 50 full time equivalent FTE employees provide health insurance for their full time employees or pay a per month Employer Shared Responsibility Payment on their federal tax return Health pro s and con s of Obama care lecture o Health recall class examples near front door applying deductible coinsurance and out of pocket max o Most policies sold today have a calendar year deductible coinsurance copayments and


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FSU RMI 3011 - Test 3 Review

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