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AUTO
NEW YORK EXAM
| Term | Definition |
|---|---|
| personal auto policy (PAP) | is an insurance policy for the owners of private passenger vehicles |
| PAP contains several parts | • Part A – Liability Coverage; • Part B – Medical Payments Coverage; • Part C – Uninsured Motorist Coverage; • Part D – Coverage for Damage to Your Auto; • Part E – Duties After an Accident or Loss; and • Part F – General Provisions. |
| The ownership or operation of an auto involves three types of potential loss, | 1. Legal liability (for injuries and/or property damage to others); 2. Injury to the insured or members of the insured's family; and 3. Damage to or loss of the auto itself. |
| Property damage means | s physical injury, destruction or loss of use of tangible property. |
| Bodily injury | physical injury, destruction or loss of use of tangible property. |
| Other-than-collision(previously called comprehensiveincludes losses caused by the following: | • Missiles or falling objects; • Fire; • Theft or larceny; • Explosion or earthquake; • Windstorm; • Hail, water, or flood; • Vandalism or malicious mischief; • Riot or civil commotion; • Contact with birds or animals; and • Breakage of glass. |
| Under liability coverage, the policy will pay for the following: | • Bodily injury and property damage • Defense costs as long as the policy covers a particular loss • Costs for settling or defending the insured as deemed appropriate |
| Under Part A – Liability, the insured is defined as | • The insured or any family member for the ownership, maintenance, or use of any auto or trailer; • Any person using an insured's covered auto with permission; • For an insured's covered auto, any person, or organization (this is only with respect to le |
| Insuring Agreement | The insuring agreement states that the insurer will pay for direct and accidental loss to a covered or non-owned auto, including equipment, minus any applicable deductible. |
| Supplementary Payments | • Bail bonds required of the insured up to $250; • Premiums on appeal bonds and bonds to release attachments in suits covered under the policy are covered in full; • Interest on a judgment is covered after the judgment has been entered; and • Other rea |
| The business auto coverage form is divided into the following sections: | 1. Section I – Covered Auto; 2. Section II – Liability Coverage; 3. Section III – Physical Damage Coverage; 4. Section IV – 4. Business Auto Conditions; and 5. Section V – Definitions. |
| Conditions | The conditions section (Section IV) of an auto policy helps define coverage in more detail. The conditions determine such things as policy period, coverage territory, and how coverage will apply in certain situations |
| AUTO SYMBOLS USED WITH BUSINESS AUTO COVERAGE FORM | 1= Any auto, including owned, leased, hired, or borrowed autos (used only for liability coverage 2=Owned autos only 3= Owned private passenger autos only 4= Owned autos, other than private passenger autos only 5= Owned autos subject to no-fault 6= |
| commercial auto policy does not use the your covered auto definition like the personal auto policy | It is important to note that the commercial auto policy does not use the your covered auto definition like the personal auto policy. The covered auto symbols are a critical component of the form as they describe the vehicles that are granted coverage. |
| if symbol 7 is used, coverage | coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured or if the newly acquired vehicle is replacing a previously owned auto that had that coverage. The insured must inform the insurer that coverage is r |
| If liability coverage is provided, certain types of other vehicles are also covered for liability. | • Trailers with a load capacity of 2,000 pounds or less; • Mobile equipment while being carried or towed by a covered auto; and • Temporary substitute vehicles used while a covered auto is out of service due to breakdown, repair, servicing, loss or des |
| Section II – Liability Coverage | states that the policy will pay for bodily injury or property damage to third parties caused by an accident resulting from the insured's ownership, maintenance, or use of any covered auto. |
| -Coverage Extensions | The coverage extensions in the Garage Coverage form provide the identical supplemental payments and out-of-state coverage extension provided in the Business Auto Coverage Form. Review those coverage extensions if needed. |
| Coverage extensions for Garagekeepers insurance are similar to the Garage Liability Coverage form, and are listed below: | • All expenses incurred by insurer; • Cost of bonds to release attachments in suits against insured defended by insurer; • Reasonable expenses incurred by insured at insurer's request, including $250 a day for time off from work; • Costs taxed aga |
| Section IV - Physical Damage | Physical Damage Coverage is similar to the Business Auto coverage form (please review those coverages): |
| Basis — if on the date of the last report the actual value of the covered autos exceeds the value | if on the date of the last report the actual value of the covered autos exceeds the value reported, the insurer will only pay a percentage of the loss based on what the insured reported and the actual value. If the first report is late, the insurer will o |
| Nonreporting Premium Basis | if the insured does not carry adequate limits of insurance, the insurer may invoke a penalty and pay only the percentage of the loss. This percentage is determined by comparing the insured value to the actual value of property at the time of the loss. |
| Motor Carrier | As defined by the ISO form, a motor carrier is a person or organization providing transportation by auto in the furtherance of a commercial enterprise. The motor carrier coverage form can cover any carriers that transport goods, including private carriers |
| Individual Named Insured | This endorsement is used with the Business Auto and Motor Carrier coverage forms to insure a sole proprietor. Any owned private passenger vehicle (auto, pickup or van not used in business) that is covered by the policy will also include family members as |
| Physical damage coverage | Physical damage coverage is also extended to the insured's family members for owned private passenger vehicles and nonowned autos. However, physical damage coverage for nonowned trailers is limited to $500. The endorsement also removes the fellow employee |
| The employees as insureds endorsement | insureds endorsement will provide the insured's employees additional protection while using a vehicle not ownd, hired, or borrowed for the insured business, if, for example, an employee uses a personal vehicle to run an errand for the insured business ow |
| Nonowned autos | Nonowned autos are those autos not owned, leased, hired, rented or borrowed in connection with the insured business. This includes autos owned by employees, partners, and members only while being used in the affairs of the insured business. |
| Nonowned autos | The Hired Autos Specified as Covered Autos You Own endorsement may be added to Commercial Auto policies to add coverage for specified hired automobiles. Any hired auto scheduled in the endorsement will be treated as if they were covered autos owned by the |
| Federal Motor | The government, both state and federal, has implemented several regulations that pertain to trucking risks for truckers who travel across state lines and within the boundaries of a single state. The federal body that regulates interstate truckers |
| Motor Carrier Act of 1980 | The act sets out the minimum financial responsibility requirements for for-hire interstate carriers and all carriers of hazardous property. |
| contract carriers | haul goods of others under contract |
| common carriers | haul goods for anyone for a fee), |
| OBEL (Optional Basic Economic Loss) | coverage is offered to New York residents in addition to the coverage mandated by the state. The OBEL supplement offers an additional $25,000 of coverage for injuries or lost wages that are incurred due to a serious accident. |
| OBEL also covers | OBEL also covers any passengers and pedestrians injured during an accident that is associated with the policyholder or policyholder's immediate family. |
| When coverage is put in place, the owner of OBEL policy | the owner of OBEL policy chooses which out-of-pocket expenses would be covered under the policy. |
| Additional PIP | Policyowners in New York also have the option of purchasing Additional Personal Injury Protection in the amount of $50,000, raising the total PIP coverage to $100,000. Additional PIP coverage extends to the policyowner, the policyowner’s family, and all |
| 6 levels of APIP coverage that supplements the PIP coverage required by New York State: | 1. No APIP, no work loss — 2. No APIP, work loss only 3. Out-of-state, no work loss 4. Out-of-state + work loss 5. Full APIP, no work loss 6. Full APIP + work loss |
| 1. No APIP, no work loss — | Maintains state-required PIP coverage with no additional coverage. |
| 2. No APIP, work loss only | Supplements state-required PIP coverage with work loss coverage. Work loss coverage helps recover lost wages up to $2,000 per month. |
| 3. Out-of-state, no work loss | Extends state-required PIP coverage to guest occupants. Lost wages are not covered if policyowner or passengers are unable to work. |
| 4. Out-of-state + work loss | Extends state-required PIP coverage to guest occupants. Includes work loss coverage that helps recover lost wages, up to $2,000 per month. |
| 5. Full APIP, no work loss | Extends state-required PIP coverage to guest occupants and increases PIP coverage to a limit of $100,000. Lost wages are not covered. |
| 6. Full APIP + work loss | Extends state-required PIP coverage to guest occupants and increases PIP coverage to a limit of $100,000. Additionally, supplements basic PIP coverage with work loss coverage which helps recover lost wages, up to $4,000 per month. |
| 5. Motor Vehicle Accident Indemnification Corporation Act | is to fill in the coverage gaps left by the motor vehicle financial security act in the vehicle and traffic law, and to provide a more comprehensive coverage for innocent victims of motor vehicle accidents caused by uninsured or underinsured motor vehicle |
| Coverage Limits | • $250,000 due to bodily injury to or death of 1 person • $500,000 due to bodily injury to or death of 2 or more persons |
| Comprehensive Motor Vehicle Insurance Reparations Act (PIP) | The New York Comprehensive Motor Vehicle Insurance Reparations Act, Personal Injury Protection requires motorists to carry first-party coverage for basic economic loss with an aggregate limit of $50,000 per person. This may also include up to $25 per day |
| The Motor Carrier Act of 1980 | The federal regulations that apply to contract carriers (haul goods of others under contract), common carriers (haul goods for anyone for a fee), and freight forwarders are established The act sets out the minimum financial responsibility requirements f |
| Comprehensive Motor Vehicle Insurance Reparations Act (PIP) | requires motorists to carry first-party coverage for basic economic loss with an aggregate limit of $50,000 per person. This may also include up to $25 per day for not more than 1 year from the date of the accident causing the injury |
| First-party benefits must be paid | First-party benefits must be paid within 30 days after the claimant supplies proof of loss. After the 30 days, the payment would be considered overdue, and will start accruing an interest rate of 2% per month. |
| (MCS-90) | The Federal Motor Carrier Safety Administration (FMCSA) has developed an endorsement, MCS-90, that must be attached to all motor carriers' policies under its jurisdiction. ensures that motor carriers comply with the federally mandated |
| New York Motor Vehicle Financial Responsibility Law Required Limits of Liability | 25,000 for bodily injury or $50,000 for death of 1 person 50,000 for bodily injury or $100,000 for death of 2 or more persons • $10,000 for destruction of property damage as result of any 1 accident |
| Auto ID Cards | The state of New York requires all auto policyholders have an encrypted, two-dimensional barcoded auto ID card. Policyholders can issue cards using the New York State Insurance Department software, |
| Binding Authority | Notice of Designation and the premium or deposit from the NY Automobile Insurance Plan, the designated insurer must, within the time provided for in the performance standards established by the Governing Committee: |
| EPA | Environmental Protection Agency located on the driver's side door jamb includes the Vehicle Identification Number.) |
| During the first 60 days a covered policy is in effect | During the first 60 days a covered policy is in effect, a notice of cancellation cannot be issued unless it is accompanied by a statement of the specific reason(s) for such cancellation. |
| symbols are found where? | in the COVERED AUTO SECTION of a commercial auto policy |
| Split limit coverage | uses 3 dollar amounts. In the event of an automobile accident, these numbers specify the maximum amount the policy will pay for • Bodily injury for each person involved; • Bodily injury for the entire accident • Property damage. 25/50/25 |
| N ew York Split limits are | 25/50/10 25 ni 1 person BI limit 50 max BI 10 max PD -property dmg |
| person w/o comp/col coverage rents a car in NY whill his rental endorsement cover the loss? | Yes, the endorsement may be provided even w/o existing coverage |
| Auto Assigned Risk Policy how much coverage is provided to insured's liability for two people in a single accident | 100 k |
| Supplementary Uninsured Motorist Coverage | 250 oer person 500 per accident |
| • Motor carrier coverage form | is an alternative to the truckers coverage form. It covers businesses that transport either owned or nonowned property. |
| SUM -supplement uninsured motorist coverage | |
| PAP COVERS A LOSS | IN ANY STATE |
| cONDITIONS | DEFINES COVERAGE IN GREATER DETAIL LIKE THE POLICY PERIOD, TERRITORY, & THE COVERAGE WILL APPLY IN CERTAIN SITUATIONS. |
| INSURER MUST ALERT THE COMMISSIONER WITHIN ___ DAYS OF AN INSURANCE POLICY TERMINATION | 30 DAYS |
| Individual Named Insured Endorsement | is used with the Business Auto and Motor Carrier coverage forms to insure a sole proprietor. Any owned private passenger vehicle . Coverage is also granted to the insured and family members for use of a non owned auto |
| When the states financial responsibility law is higher than the limits shown, will the insured policy pay the higher limit? | Yes, The insureds policy will pay the higher limit based on the laws the accident was located in. |
| New Yorks Vehicle Accident Indemnication corp act | |
| The New York Comprehensive Motor Vehicle Insurance Reparations Act, | requires motorists to carry first-party coverage for basic economic loss with an aggregate limit of $50,000 per person. This may also include up to $25 per day for not more than 1 year from the date of the accident causing the injury. |
| Motor Vehicle Accident Indemnification Corporation Act required limit for um coverage is | 25 per person/50 per accident |
| SYMBOLS ARE FOUND IN WHIC SECTION OF THE COMMERCIAL AUTO POLICY? | COVERED AUTO SECTION |
| SUBRO RIGHTS DON'T APPLY TO | PHYSICAL DAMAGE COVERAGE |
| UNDER INSURED MOTOR COVERAGE UNDER PAP | Coverage applies only to the extent that the underinsured motors limits exceed the BI Limits carried by the operator of the other vehicle. |
| Garage coverage does not cover | property dmg to a customers vehicle on a service hoist or for BI |
| Accident Indemnification Corporation Act | The purpose of the Motor Vehicle Accident Indemnification Corporation Act is to fill in the coverage gaps left by the motor vehicle financial security act in the vehicle and traffic law, and to |
| Accident Indemnification Corporation Act | Every insurer authorized to write motor vehicle liability insurance in New York must join the non-profit |
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