RMIN 4000 UGA test 3
Auto Insurance - answer-6 or 12 month policy
-premiums usually paid monthly or quarterly
5 general types of auto coverage - answer1. liability
2. damage
3. uninsured motorist
4. medical payments
5. convenience coverage
Personal Auto Policy (PAP) - answer--3rd party coverages (payments to someone else):
•Part A: Liability Coverage (required by state)
--1st party coverages (payments to you):
•Part B: Medical Payments Coverage
•Part C: Uninsured Motorists Coverage
•Part D: Coverage for Damage to Your Auto
--Other provisions:
•Part E: Duties after an Accident or Loss
•Part F: General Provisions
What vehicles are covered? - answer•Any vehicle shown in the declarations
•A newly acquired vehicle (notify insurer ASAP, definitely within 14 days)
•A trailer owned by the named insured
•A temporary substitute vehicle, which is a non-owned auto or trailer used temporarily
because of mechanical breakdown, repair, servicing, loss, or destruction of a covered
vehicle
damage coverage - answerdamage to your vehicle
uninsured motorist coverage - answer3rd party without insurance causes BI to you or
your passengers
medical payments coverage - answerBI to you or your passengers
Convenience Coverage - answertowing, rental reimbursement, etc.
Part A: Liability Coverage - answer•Required by state law
•There is a duty to own, maintain and operate your vehicle in a manner that does not
injure others or damage their property.
•If you fail in that duty - even accidentally - you are responsible for injuries / damages to
others.
,•Insuring agreement- insurer pays any damages for PI or BD for which any insured is
legally responsible because of an auto accident
Part A: Who is covered? - answer•The named insured and any resident family member
•Any person using the named insured's covered auto with permission
•Any person or organization legally responsible for any insured's use of a covered auto
on behalf of that person or organization
oEx: Employer is sued if you get in an accident while on a work trip
oDoes not apply if you're driving a company car
Part A: Relevant Exclusions - answer•Intentional injury or damage
•Property owned or transported by the insured
•Property rented, used, or in the insured's care
•Use as a public or livery conveyance
•Using a vehicle without reasonable belief the person is entitled to do so
•Vehicle with fewer than four wheels
•Vehicle furnished for the named insured's regular use
Part A: Limits - answer•Split limits: limits for BI per person, BI per accident, and PD are
stated separately (BI pp/BI pa/PD)
•Minimum limits in GA: 25/50/25
o$25,000 BI per person
o$50,000 BI per accident
o$25,000 PD per accident
•Is this enough? If you have insufficient liability limits...
oSeize assets
oGarnish up to 25% of wages
Defense Costs - answer•Defense costs can be huge. Good thing the Liability Section
covers loss IN ADDITION to the policy limits.
•This means that the costs of defense will not erode the coverage limits available for
payment of claims.
•But, the duty to defend ENDS when limits have been exhausted through actual
payment of claims.
Part A: Out-of-State Coverage - answer•If you have minimum limits in your state and
you get in an accident in another state with higher minimum limits the PAP automatically
provides higher limits.
Part B: Medical Payments - answer•Covers all reasonable medical and funeral
expenses incurred by an insured in an accident
•The named insured and family members are covered:
oWhile occupying any motor vehicle, or
oAs pedestrians when struck by a motor vehicle
•Other persons occupying a covered auto are covered, but only in an owned vehicle
•Usually low limits (~$5,000)
, Part B: What's the Point? - answer•This pays regardless of fault.
•Pays some medical costs of driver, even if it is driver's negligence.
•It may be difficult to determine fault at time of accident, this will provide initial treatment.
•Once fault is determined, amounts usually paid out of the negligent party's Part A.
Difference between Part A and Part B - answer•Do not mistake Part B Med Pay with
paying Medical Expenses for Bodily Injury in Part A.
•Part A will pay for Medical Expenses (and Loss of Income, etc.) to OTHERS IF YOU
ARE LIABLE because of negligence.
•Part B will pay for Medical Expenses REGARDLESS OF FAULT but only for NAMED
INSURED & Family Members, as well as, anyone occupying the Covered Vehicle.
Part C: Uninsured Motorists Coverage - answer•Uninsured motorists coverage pays for
the bodily injury caused by an uninsured motorist
oThe uninsured motorist must be legally liable
oLimit for any single accident is the amount shown in the declarations
•Underinsured motorists coverage can be added to the PAP to provide more complete
protection
oIn 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
Part C: Why do we need this? - answer• A compulsory insurance law requires motorists
to carry at least a minimum amount of liability insurance before the vehicle can be
licensed or registered.
• The purpose of the law is to provide greater protection against uninsured drivers
because motorists must provide evidence of financial responsibility before an accident
occurs.
Part C: Who is an "uninsured motorist?" - answer•A motor vehicle or trailer for which no
bodily injury liability insurance policy applies at the time of the accident
•An insured vehicle with less coverage than the amount required by the state's financial
responsibility law
•A hit-and-run vehicle
•A vehicle covered by an insurer that denies coverage or becomes insolvent
Part D: Coverage for Damage to Your Auto ("Collision & Comp") - answer•Insurer will
pay for direct and accidental loss to a covered auto
•Will also pay for damage to a "nonowned auto"
oA vehicle you do not own but have permission to drive, or
oA "temporary substitute vehicle" as defined earlier
•Deductible applies (this is usually the only Part with a deductible)
•Two parts: Collision and Comprehensive ("Comp")
oCan buy only one or both (or neither)
Auto Insurance - answer-6 or 12 month policy
-premiums usually paid monthly or quarterly
5 general types of auto coverage - answer1. liability
2. damage
3. uninsured motorist
4. medical payments
5. convenience coverage
Personal Auto Policy (PAP) - answer--3rd party coverages (payments to someone else):
•Part A: Liability Coverage (required by state)
--1st party coverages (payments to you):
•Part B: Medical Payments Coverage
•Part C: Uninsured Motorists Coverage
•Part D: Coverage for Damage to Your Auto
--Other provisions:
•Part E: Duties after an Accident or Loss
•Part F: General Provisions
What vehicles are covered? - answer•Any vehicle shown in the declarations
•A newly acquired vehicle (notify insurer ASAP, definitely within 14 days)
•A trailer owned by the named insured
•A temporary substitute vehicle, which is a non-owned auto or trailer used temporarily
because of mechanical breakdown, repair, servicing, loss, or destruction of a covered
vehicle
damage coverage - answerdamage to your vehicle
uninsured motorist coverage - answer3rd party without insurance causes BI to you or
your passengers
medical payments coverage - answerBI to you or your passengers
Convenience Coverage - answertowing, rental reimbursement, etc.
Part A: Liability Coverage - answer•Required by state law
•There is a duty to own, maintain and operate your vehicle in a manner that does not
injure others or damage their property.
•If you fail in that duty - even accidentally - you are responsible for injuries / damages to
others.
,•Insuring agreement- insurer pays any damages for PI or BD for which any insured is
legally responsible because of an auto accident
Part A: Who is covered? - answer•The named insured and any resident family member
•Any person using the named insured's covered auto with permission
•Any person or organization legally responsible for any insured's use of a covered auto
on behalf of that person or organization
oEx: Employer is sued if you get in an accident while on a work trip
oDoes not apply if you're driving a company car
Part A: Relevant Exclusions - answer•Intentional injury or damage
•Property owned or transported by the insured
•Property rented, used, or in the insured's care
•Use as a public or livery conveyance
•Using a vehicle without reasonable belief the person is entitled to do so
•Vehicle with fewer than four wheels
•Vehicle furnished for the named insured's regular use
Part A: Limits - answer•Split limits: limits for BI per person, BI per accident, and PD are
stated separately (BI pp/BI pa/PD)
•Minimum limits in GA: 25/50/25
o$25,000 BI per person
o$50,000 BI per accident
o$25,000 PD per accident
•Is this enough? If you have insufficient liability limits...
oSeize assets
oGarnish up to 25% of wages
Defense Costs - answer•Defense costs can be huge. Good thing the Liability Section
covers loss IN ADDITION to the policy limits.
•This means that the costs of defense will not erode the coverage limits available for
payment of claims.
•But, the duty to defend ENDS when limits have been exhausted through actual
payment of claims.
Part A: Out-of-State Coverage - answer•If you have minimum limits in your state and
you get in an accident in another state with higher minimum limits the PAP automatically
provides higher limits.
Part B: Medical Payments - answer•Covers all reasonable medical and funeral
expenses incurred by an insured in an accident
•The named insured and family members are covered:
oWhile occupying any motor vehicle, or
oAs pedestrians when struck by a motor vehicle
•Other persons occupying a covered auto are covered, but only in an owned vehicle
•Usually low limits (~$5,000)
, Part B: What's the Point? - answer•This pays regardless of fault.
•Pays some medical costs of driver, even if it is driver's negligence.
•It may be difficult to determine fault at time of accident, this will provide initial treatment.
•Once fault is determined, amounts usually paid out of the negligent party's Part A.
Difference between Part A and Part B - answer•Do not mistake Part B Med Pay with
paying Medical Expenses for Bodily Injury in Part A.
•Part A will pay for Medical Expenses (and Loss of Income, etc.) to OTHERS IF YOU
ARE LIABLE because of negligence.
•Part B will pay for Medical Expenses REGARDLESS OF FAULT but only for NAMED
INSURED & Family Members, as well as, anyone occupying the Covered Vehicle.
Part C: Uninsured Motorists Coverage - answer•Uninsured motorists coverage pays for
the bodily injury caused by an uninsured motorist
oThe uninsured motorist must be legally liable
oLimit for any single accident is the amount shown in the declarations
•Underinsured motorists coverage can be added to the PAP to provide more complete
protection
oIn 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
Part C: Why do we need this? - answer• A compulsory insurance law requires motorists
to carry at least a minimum amount of liability insurance before the vehicle can be
licensed or registered.
• The purpose of the law is to provide greater protection against uninsured drivers
because motorists must provide evidence of financial responsibility before an accident
occurs.
Part C: Who is an "uninsured motorist?" - answer•A motor vehicle or trailer for which no
bodily injury liability insurance policy applies at the time of the accident
•An insured vehicle with less coverage than the amount required by the state's financial
responsibility law
•A hit-and-run vehicle
•A vehicle covered by an insurer that denies coverage or becomes insolvent
Part D: Coverage for Damage to Your Auto ("Collision & Comp") - answer•Insurer will
pay for direct and accidental loss to a covered auto
•Will also pay for damage to a "nonowned auto"
oA vehicle you do not own but have permission to drive, or
oA "temporary substitute vehicle" as defined earlier
•Deductible applies (this is usually the only Part with a deductible)
•Two parts: Collision and Comprehensive ("Comp")
oCan buy only one or both (or neither)
