General Insurance

We are finally at the chapter that all of you have been waiting for, the automobile policy! Every one of you has probably had to purchase or be involved with an automobile liability claim at some point. In fact I'd like you to take just a minute to think about a case where someone filed a claim on an auto policy and made money. In other words how could he or she have been reimbursed for more than the actual loss? Please post your example on D2L! Let's get the discussion going on examples where the policy did not pay as you may have expected it to.

A good summary of the personal auto policy, which we will call the PAP, is the following. Part a bill of the coverage, part B medical payments coverage, part C uninsured motorist coverage, part D coverage for damage to your auto, part D duties after an accident or loss, part F general provisions. You can find these outlined and discussed starting on page 479.

Please note that the auto policy is fairly easy to read, much like the homeowners policy we had in the last two chapters. Part A for liability is outlined in different sections as we have seen before, beginning with the insuring agreement, the insured people, supplementary payments, exclusions, limits, and the discussion of out-of-state coverage.

Part B, medical payments coverage, is an interesting coverage as it is paid without regard to a fault. This would cover the named insured or any family members or any passengers in the insured vehicle. Note that I said the insured or family members are covered but it is not a requirement that they be in the covered automobile. So if you were injured in someone else's car, you may have coverage on your own PAP.

Part C is a little more complicated as it is called uninsured motorist coverage. The format of the information in the section is similar to the format used in the liability and the medical payments coverages. It is important to notice the definition of the insured persons. You will note on page 487 that there are three groups of persons covered under the uninsured motorist coverage: 1. The named insured and his or her family members. 2. Any other person occupying a covered auto. 3. Any person legally entitled to recover damages because of bodily injury to a person described and numbers one and two. Uninsured motorist coverage basically can be added to the PAP to provide coverage when a negligent third-party does not have the liability protection needed to pay for your loss. Additionally, if the third-party has insurance but just not enough insurance, the uninsured motors coverage will then become underinsured motorists coverage, or UIM coverage for short. Many people may only purchase liability coverage and not collision on the other coverages, especially if their car is older and paid for. They may only have uninsured or underinsured motorist coverage to repair their car. This would imply the car owner was counting on the third-party always being at fault.

Continue reading through the parts of the auto coverage including coalition and other than collision coverage. The other than collision coverage was called comprehensive coverage for many years, but since not all losses are covered under other than collation, then the term has changed. Look at the losses that are covered under other than collision on page 490.

There's some very useful information in this policy on decisions that you make confront from time to time. For example, when you rent a car, should we apply the collision damage waiver for that rental car? There are different schools of thought on that question, and those are discussed here in this chapter. Also read the exclusions of the auto policy. For students, loss in the past has been the loss of CDs and a lot electronics out of their car.

Your duties under the law is very important. You can't just have an accident and leave the details to your insurance company. Believe it or not, while I was a claims adjuster many insureds wanted to do just that. I remember one insured’s car was totally burned down to the shell, and he just left it on the side of the road and told our company that we could have it towed wherever we wanted. Of course I would never have someone's car towed even though the car was worth virtually nothing. It is the insured’s responsibility to follow through on the various duties that are outlined in this portion of your policy.

Again, read through the case application in this chapter found on page 499. This case involves a college student who may be much like you. This case include some typical claims that I recall seeing when I was a claims adjuster. I hope you have gleaned some very useful information from this chapter that you want to use in making your automobile insurance decisions!