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PROPERTY and LIABILITY AUTOMOBILE
3/13
The Personal Automobile Policy – one of the major costs of operating an automobile

Perils Associated with Automobile Ownership/Operation

Tort liability – lawsuits may result from the harm/damage you cause to other persons or property
Note: 60% of all damages paid are for things other than damage to cars

Death/Bodily Injury – the dollar costs of these are 6X higher than for property damage liability
Note: contributing factors include age, sex, alcohol/drug use, speed, rural/urban settingor distractions (passengers, cellphones)

Collision losses – the size and type of your vehicle are the big factors in predicting the degree of damages and cost of repairs. $$$
Theft – frequency is highest among the most popular (Camry, Taurus, etc.) and high value (SUV,Lexus) vehicles; the frequency is also highest in urban areas (Willie Sutton theory)

Non-collision losses – hail, fire, falling objects, animals, flood, storm, vandalism, etc.

COVERAGES

ALiability – your own negligence – provides financial protection from tort liability; technology now allows electronic monitoring of drivers by insurers
Property losses – includes damage to other vehicles, structures, livestock, etc. Bodily injury – medical care, pain and suffering, loss of income. Usually with upper-end limits for each person and each event. This is above the costs of defending yourself. Limits – BI liability per person/per accident/ PD property damages

Note : Bankruptcy may not eliminate a court award.
BMedical – this covers your own medical expenses from an accident, accidental D & D, etc. To the extent that this duplicates health coverage from your regular medical plan, it is not recommended for most drivers.

CUninsured/Underinsured motorist – covers you if the negligent party is not adequately insured

DPhysical Damage - to your car (when no one else is to blame)

Collision – covers damage to your own car in moving accidents
Comprehensive – covers loss to your vehicle other- than-collision (storm, flood, animals)etc.)
Non-owned auto- not regularly made available to the insured
Deductibles – your co-payment; eliminates small claims; reduces premiums

Included in your Liability Coverage

Covered Auto
Vehicles listed on your policy
Temporary substitute – if you are driving someone else’s car
Towed Trailers
Newly acquired Auto – automatic coverage for 30 days
Covered persons
Yourself
Others in your household
Temporary borrowers (with permission)
Third Parties (such as your employer) who may be held liable for acts of an insured person

Other Items Included in Your Policy

Legal defense against frivolous claims
Legal costs above damage award
When you rent a car – broadest coverage applies; see if coverage is acceptable to rental agency
Automatic extension to minimum required coverage when driving out of stateNote: different states have different minimums

Exclusions and Limitations

Hiring out your car
Commercial use – JimmyJohn/Domino’s delivery, taxi, hauling
Exception for automotive businesses who may test drive your car
Without permission
Less than 4-wheeled vehicles (e.g. - a borrowed ATV)
Intentional damage by covered person
War or civil disturbance
Failure to report/preserve & protect
Contents
Wear and Tear – “Inherent Vice”
Trailers – only liability coverage and only while pulling
Employer’s car
Note: coverage is defined more narrowly if it is not your car
Note: replacement is limited to “like kind and value”
Note: “actual cash value” may not be fair market value
Note: keep a small disposable camera in the car to photograph accident scene

Other Contractual Provisions

Subrogation Clause – gives insurer the right to pursue liable third parties
Cancellation – insurer...
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