“Sometimes I wonder what I’m a-gonna do
But there ain’t no cure for the summertime blues.”
Whether you prefer the original Eddie Cochran version, the classic Live at Leeds from The Who, or even the ear-bleeding crushing power chords of Blue Cheer, Summertime Blues is one of those songs written for August. Driven into numb lethargy by the heat or just tired of work in general, the singer laments his inability to take or catch a break in words and tones any frustrated person can understand. Even insurance folk.
Many is the agency or carrier that may well claim to be as open and energetic as spring, but reality is revealed when e-mail replies are variations of “out of office,” phone calls go directly to voice mail and text messages go unheeded. Intentionally or simply due to lack of energy, these are the dog days of summer.
We are not alone. Other businesses and activities join us in our lethargy. The baristas at Starbucks seem to move just a bit slower, the stores seem half deserted and I swear my iMac goes into sleep mode more frequently.
Yet there is a silver lining around those thunderstorm clouds. Indeed, this very pause in life in the fast lane provides a perfect opportunity to devote some extra time to delving a bit deeper into coverage questions that, while potentially crucial, just never seem to merit rising to the top of the priority list during those days of barely controlled chaos that appear to dominate so many agencies the rest of the year.
For example, let’s kick back under your favorite shade tree with a glass of icy lemonade or tea and consider the query recently sent my way by an alert reader (edited for clarity):
Hi, Chris! We recently received a memo from one of our companies regarding a change to their definition of an “Insured.” I believe that I may be reading this wrong, or misunderstanding it, but the way it’s worded it sounds as if there is no coverage for a person if they have their own policy. For example: I’m driving your car, I hit another vehicle; your policy is only going to pay for the damages if I don’t have a policy of my own. If I do have a policy of my own, they won’t pay, but will expect mine to pay. Would you please give me your thoughts on this and maybe straighten me out? I’m not sure this is something we need to be concerned about or if perhaps we should be doing something differently.
Here is the applicable company endorsement wording to which our reader refers, which is intended to modify the definition of “insured” for auto liability:
- Your covered auto
- A newly acquired auto
- A trailer while attached to an auto described above.
One other key fact: the carrier memo indicates this endorsement is for attachment to a personal or farm umbrella.
What it all means
Note our reader’s humility. As an alternative to an overwhelmingly obnoxious ego, humility is all well and good. But be careful it doesn’t lead you, in the immortal words of Bruce Springsteen, to doubt what you are sure of.
Facing this fear of being wrong, whether correct or not, she did absolutely the correct thing, which a plethora of E&O claims analyses proves far too many agents don’t: When in doubt, ask. Whether this means a conversation with a more experienced agent or underwriter, a query posted to the IIABA Virtual University or similar online resource, an e-mail to a humble scribe, or all of the above, the key is not to just act and hope. Better to trust but verify than flip a coverage coin and go down in flames. Particularly in forms and endorsement wording queries, a neutral third party with no emotional involvement with either the carrier or scenario can often see the situation more clearly.
In this case, whatever the carrier may have intended, the endorsement language is clear: Because “Insured” will only include a “person who is not insured for vehicle liability by any other liability policy” (emphasis mine), then a person who is insured by such other policy will not be included for coverage. Hence our reader’s example is on point: If she has an accident while using my car (“Your covered auto”), and she has her own Auto insurance liability that will apply to the accident, then the policy to which this endorsement is attached will provide no liability coverage for her for that accident.
Related: Blurred word crimes
Before going off like a 4th of July firework over this, be certain to consider just what this means—especially because this particular endorsement is not indicated to attach to a personal auto policy (PAP) but specifically for an umbrella. Consider liability coverage for the accident as described in her example (and assuming an ISO PAP and no other exclusions apply):
- I’m still protected under both my PAP and umbrella; the endorsement only limits her status as an insured.
- The limits under my PAP still apply in full to protect her (only her excess coverage under my umbrella is eliminated by the endorsement).
- The full limits under her PAP will still protect her as excess to mine, as long as she is a permissive user of “any auto.”
- The full limits of her own personal umbrella will still protect her, as under her policy she will not be “any other person.”
Bottom line: Although the new endorsement may well be a restriction of coverage, it hardly leaves our reader totally unprotected while using my vehicle. And if she fails to have her own coverage, the endorsement specifically provides her coverage, giving her full access to both my PAP and personal umbrella limits.
Again, a necessary disclaimer: This analysis is based upon the example in her e-mail and the specific wording of the endorsement, and assuming no other limitations or exclusions apply under either my PAP or umbrella.
So as you wander back inside to refresh that wonderfully cold ice tea or lemonade, allow me to slightly misquote Mungo Jerry’s summertime classic:
In the summertime when the sun is bright,
You can take the time to get it right,
When the weather’s fine,
You got coverage, you got coverage on your mind.
Have a drink, grab a form
Read up and see what you may find.
Chris Amrhein, AAI, is an insurance educator and speaker, and serves as the chief fun officer at insuranceisfun.com.