The personal auto policy consists of a declarations page and a policy form. The policy form contains four separate coverages, each with its own insuring agreement, exclusions, and conditions. They are as follows: ■Part A—liability coverage ■Part B—medical payments coverage ■Part C—uninsured motorists coverage ■Part D—coverage for damage to your auto (physical damage) Many …
PARTS E AND F—CONDITIONS Parts E and F of the personal auto policy list conditions that apply to the policy as a whole. Part E—duties after an accident or loss details the duties of insureds following a loss. They are similar to the duties required under other property and liability policies. Note that under …
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UNDERINSURED MOTORISTS COVERAGE Earlier, we stated that a vehicle with liability insurance in an amount equal to or greater than the state’s financial responsibility limit is not considered an uninsured vehicle under uninsured motorists coverage. This financial responsibility limit, however, often falls far short of fully reimbursing the insured for a loss. Underinsured motorists coverage …
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PERSONAL AUTO POLICY ENDORSEMENTS Although the personal auto policy provides broad coverage for an individual’s auto exposures, some insureds may have additional coverage needs that can be met by adding an endorsement to the policy. Earlier, we stated that a personal auto policy can be issued to an individual or a married couple who …
NO-FAULT INSURANCE You’ve learned that an insured’s auto liability insurance pays only for losses that the insured is legally liable for. But in many cases, this traditional fault system has created a backlog in the courts and excessive costs—all to determine who is at fault. In an attempt to deal with these problems, some …
ASSIGNE D RISK PLANS It has become increasingly difficult for some drivers to obtain automobile insurance. This is partly because most of these drivers are not average drivers. Because of poor driving records, most companies will not accept them because their loss experience is much greater than the average driver’s. However, it is in …
PART D—COVERAGE FOR DAMAGE TO YOUR AUTO 1. Coverage The liability section of the personal auto policy excludes damage to property owned by, rented to, used by, or in the care of the insured. Such coverage is provided under the Personal Auto policy by Part D—coverage for damage to your auto, commonly known …
PART C—UNINSURED MOTORISTS COVERAGE 1. Coverage Part C of the personal auto policy provides uninsured motorists (UM) coverage. In most states, this coverage indemnifies the insured for bodily injury only as a result of an accident with a legally liable uninsured motorist. Only compensatory damages are covered; punitive damages are specifically excluded. Some states offer …
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PART B—MEDICAL PAYMENTS COVE RAGE 1. Coverage, Who Is an Insured Part B—medical payments coverage provides protection for the named insured, family members, and passengers in the named insured’s auto for injuries received in an accident, regardless of who was at fault. It is not a form of liability coverage for injuries sustained by …
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PART A—LIABILITY COVE RAGE 1. Coverage Part A—liability coverage covers damages for bodily injury or property damage that an insured becomes legally responsible for because of an auto accident. There are several important concepts here. First, the policy only protects those who are considered insureds. We’ll look at who is an insured under Part …