RMI3011 Lecture Chapter 18 Notes Personal Auto Policy Basics o Any auto shown in the declarations page o A newly acquired auto Part A Liability Coverage o The most IMPORTANT part of the PAP Protects a covered person against a suit or claim arising out of the ownership or operation of a covered vehicle Amounts of insurance for bodily injury liability and property damage liability are stated separately o Usually written in split limits o Split limits of 100 500 100 mean Per person per accident o Applies to Named insured and any resident family member Any person using the named insured s covered auto Coverage follows the car regardless of who is driving Anyone legally responsible o The insurer also agrees to provide defense and pay all legal defense costs for claims covered by the policy ends when the policy limit is reached Supplementary payments o Exclusions Intentional injury or damage Property owned or transported Property rented used or in the insured s care Bodily injury to an employee worker s compensation use as a public livery or conveyance Uber driver s are NOT COVERED ever Using their own car as a form of public transportation Vehicles used in the auto business Vehicles with fewer than 4 wheels Vehicle furnished for the insured s regular use Aka company carpool o If an accident occurs in another state and the financial responsibility law in that state has higher liability limits than shown in the declarations the PAP automatically provides the higher limits If more than one liability policy covers a loss The insurer pays its pro rata share of the loss for an owned vehicle The insurance coverage is excess over any other insurance for a non owned vehicle Lecture 10 22 15 Chapter 18 cont Approaches for Compensating Auto Accident Victims A compulsory insurance law requires motorists to carry at least a minimum amount of liability insurance before the vehicle can be licensed or registered o Some argue that the law provides greater protection against uninsured drivers because motorists must provide evidence of financial responsibility before an accident occurs o Critics mandatory insurance does not reduce the number of uninsured drivers Unsatisfied judgement funds compensate auto insurance caused by uninsured motorist who has exhausted all other funds Uninsured motorists coverage o The injured person s insurer agrees to compensate for bodily injury caused by an uninsured motorist a hit and run driver or a negligent driver whose insurer is insolvent Low cost auto insurance provides minimum amounts of liability insurance at reduced rates to motorists who cannot afford regular insurance o Goal is to reduce the number of uninsured drivers No pay no play laws Prohibit uninsured motorists from suing negligent drivers for noneconomic damages No fault Tort systems o Tort negligent party pays economic and non economic damages requires liability insurance o No Fault Own insurer pays No fault auto insurance another method for compensating injured Pure no fault accident victims cannot sue at all regardless of the amount of the claim this doesn t exist Modified no fault plan victims have a limited right to sue o Monetary threshold o Verbal Threshold certain conditions like injuries involving death dismemberment disfiguration etc Add on plan pays benefits to an accident victim without regard to fault and the injured person has the right to sure the negligent driver who caused the accident o Not a true no fault plan Made by adding an endorsement to an auto insurance policy o Benefits are restricted to the injured person s economic loss In some states insurers also offer Optional no fault benefits above the prescribed minimums o The right to sue varies across states with no fault or add on plans o No fault laws cover bodily injury and not property damage Arguments in support and against no fault laws are the SAME
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