ISO form PP 90 01 07 06
September 21, 2011
Summary: The Special Personal Auto Policy (PP 90 01 07 06) is a new form developed by ISO. While similar to the Personal Auto Policy PP 00 01 01 05 in many ways, the liability coverage that is provided is much more restrictive. The intent of the policy is to provide coverage for the insured and his use of the vehicle, not to provide coverage for others or under certain circumstances.
Topics Covered:
Part B-Medical Payments Coverage
Part C-Uninsured Motorists Coverage
Part D-Coverage for Damage to Your Auto
This is a new auto policy, which restricts liability coverage to the state minimum financial responsibility limits under certain circumstances, even when the policy contains larger limits. The differences between this policy and the Personal Auto Policy, PP 00 01 01 05, are highlighted and reviewed in this discussion.
A.Throughout this policy, “you” and “your” refer to:
1.The “named insured” shown in the Declarations; and
2.The spouse if a resident of the same household.
B.”We”, “us” and “our” refer to the Company providing this insurance.
C.For purposes of this policy, a private passenger type auto, pickup or van shall be deemed to be owned by a person if leased:
1.Under a written agreement to that person; and
2.For a continuous period of at least 6 months.
Other words and phrases are defined. They are in quotation marks when used.
D.”Bodily injury” means bodily harm, sickness or disease, including death that results.
E.”Business” includes trade, profession or occupation.
F.”Family member” means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.
G.”Occupying” means:
1.In;
2.Upon; or
3.Getting in, on, out or off.
H.”Property damage” means physical injury to, destruction of or loss of use of tangible property.
I.”Trailer” means a vehicle designed to be pulled by a:
1.Private passenger auto; or
2.Pickup or van.
It also means a farm wagon or farm implement while towed by a vehicle listed in 1. or 2. above.
Analysis
There is one minor difference to the definitions from the standard language that appears in the PP 00 01 01 05. Language in the PP 00 01 01 05 policy provides that if the spouse ceases to be a resident of the household during the policy period or prior to inception, the spouse will be considered “you” and “your” but only until the earlier of ninety days following the change of residency, the effective date of another policy for the spouse, or the end of this policy. The special personal auto policy has removed all such language. Therefore, a spouse is covered under this policy as “you” and “your” only while a resident of the same household. There is no cushion of time for a spouse that leaves the residence to obtain other coverage; if they do not obtain other coverage immediately upon leaving the residence, they have no coverage. In the other policy, they are given coverage for a limited period of time.
J.”Your covered auto” means:
1.Any vehicle shown in the Declarations.
2.A “newly acquired auto”.
3.Any “trailer” you own.
4.Any auto or “trailer” you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its:
a.Breakdown;
b.Repair;
c.Servicing;
d.Loss; or
e.Destruction.
K.”Newly acquired auto”:
1.”Newly acquired auto” means any of the following types of vehicles you become the owner of during the policy period:
a.A private passenger auto; or
b.A pickup or van, for which no other insurance policy provides coverage, that:
(1)Has a Gross Vehicle Weight Rating of 10,000 lbs. or less; and
(2)Is not used for the delivery or transportation of goods and materials unless such use is:
(a)Incidental to your “business” of installing, maintaining or repairing furnishings or equipment; or
(b)For farming or ranching.
2.Coverage for a “newly acquired auto” is provided only for a vehicle which replaces a vehicle shown in the Declarations, as described below.
a.For any coverage provided in this policy except Coverage For Damage To Your Auto, a “newly acquired auto” will have the same coverage as the vehicle it replaced. Coverage begins on the date you become the owner without your having to ask us to insure it.
b.If Coverage For Damage To Your Auto:
(1)Applies to the vehicle being replaced, you must ask us to insure a “newly acquired auto” within 14 days after you become the owner if you wish to continue Coverage For Damage To Your Auto.
(2)Does not apply to a vehicle being replaced, you must request this coverage to apply. Any coverage provided will begin at the time you request the coverage.
If you become the owner of a vehicle that is in addition to any vehicle shown in the Declarations, you must ask us to insure it for coverage to apply. Any coverage provided will begin at the time you request the coverage.
Analysis
In this section of definitions, there are a few more differences. The language in the definition of “your covered auto” that states that provision J.4. does not apply to coverage for damage to your auto has been removed from this policy. Therefore, any auto or trailer the insured does not own but uses as a temporary substitute while the owned auto is out of normal use due to breakdown, repair, destruction etc. is included in the definition of “your covered auto” regarding coverage for damage to insured autos.
The provision for coverage to a newly acquired auto is restricted when the vehicle is an addition to the policy and is not replacing an existing vehicle. When it is replacing an existing vehicle, the company does not need to be notified and liability coverage applies as it did to the previous vehicle. In order for physical damage coverage to continue the company must be notified within fourteen days of acquisition of the new vehicle. Otherwise, physical damage coverage is effective at the time of the request to add the coverage.
When a new, additional vehicle is acquired, no coverage is granted until the vehicle is specifically added to the policy. For example, an insured purchases a new sports car on Friday the tenth after the insurance agency closes. The insured does not contact the agent until Monday the thirteenth to add the vehicle to the policy. The vehicle will not have any coverage from the date of purchase, the tenth, because the company was not notified until the thirteenth. The coverage becomes effective on the thirteenth, the date of notification.
INSURING AGREEMENT
A.We will pay compensatory damages for “bodily injury” or “property damage” for which any “insured” becomes legally responsible because of an auto accident. Damages include prejudgment interest awarded against the “insured”. We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgments or settlements. We have no duty to defend any suit or settle any claim for “bodily injury” or “property damage” not covered under this policy.
B.”Insured” as used in this Part means:
1.You for the ownership, maintenance or use of:
a.”Your covered auto”;
b.Any private passenger auto or “trailer”; or
c.A pickup or van that has a Gross Vehicle Weight Rating of 10,000 lbs. or less.
2.Any “family member” for the maintenance or use of “your covered auto”.
3.Any person, other than you or any “family member”, using “your covered auto” up to the minimum limits of liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged.
4.For “your covered auto”, any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.
5.For any auto or “trailer”, other than “your covered auto”, any other person or organization but only with respect to legal responsibility for your acts or omissions. This Provision (B.5.) applies only if the person or organization does not own or hire the auto or “trailer”.
Analysis
In this section the insuring agreement specifically states that compensatory damages for bodily injury or property damage will be paid. The definition of “insured” for liability coverage is more specific; while the named insured is covered for autos and trailers as on the PP 00 01 01 05, the liability coverage provided for pickups or vans is restricted to those vehicles with a gross vehicle weight of 10,000 pounds or less. In the personal auto policy the weight of pickups or vans was not specified.
Family members are covered for the use of your covered auto only; they are no longer covered for the use of any auto or trailer. They are limited to the use of any vehicle listed in the declarations or newly acquired vehicles; they are not provided liability coverage for any other vehicles or trailers.
One of the biggest differences is the restriction of coverage for any person other than the named insured or family member using your covered auto. This policy restricts liability coverage to the minimum state financial responsibility limits in which the vehicle is principally garaged. For example; the insured has liability limits of 100/300/100 and the state minimum limit is 20/40/15. The insured lets a friend borrow the vehicle and the friend has an at fault accident, the most that will be paid is 20/40/15. This is regardless of the fact that the insured is carrying higher limits. This restriction is repeated throughout the policy; coverage is limited to minimum limits for certain drivers and certain situations.
Coverage to any other person or organization for use of any auto or trailer other than an insured vehicle when the legal liability is borne by family members is not provided. Liability is provided only for other persons or organizations while using an auto or trailer other than an insured vehicle only when the legal liability is borne by the named insured.
SUPPLEMENTARY PAYMENTS
We will pay on behalf of an “insured”:
1.Up to $250 for the cost of bail bonds required because of an accident, including related traffic law violations. The accident must result in “bodily injury” or “property damage” covered under this policy.
2.Premiums on appeal bonds and bonds to release attachments in any suit we defend.
3.Interest accruing after a judgment is entered in any suit we defend. Our duty to pay interest ends when we offer to pay that part of the judgment which does not exceed our limit of liability for this coverage.
4.Up to $200 a day for loss of earnings, but not other income, because of attendance at hearings or trials at our request.
5.Other reasonable expenses incurred at our request.
These payments will not reduce the limit of liability.
EXCLUSIONS
A.We do not provide Liability Coverage for any “insured”:
1.Who intentionally causes “bodily injury” or “property damage”.
2.For “property damage” to property owned or being transported by that “insured”.
3.For “property damage” to property:
a.Rented to;
b.Used by; or
c.In the care of;
that “insured”.
This Exclusion (A.3.) does not apply to “property damage” to a residence or private garage.
4.For “bodily injury” to an employee of that “insured” during the course of employment. This Exclusion (A.4.) does not apply to “bodily injury” to a domestic employee unless workers' compensation benefits are required or available for that domestic employee.
5.For that “insured's” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This Exclusion (A.5.) does not apply to a share-the-expense car pool.
Analysis
The language for supplementary payments is identical to that in the existing personal auto policy, and the first five exclusions are also the same. The supplementary payments provide the cost of bail, appeal, and release attachment bonds, loss of earnings and other reasonable expenses incurred at the carrier's request. The first five exclusions are the usual intentional acts, injury to an employee, use of vehicle for public livery, etc.
6.While employed or otherwise engaged in the “business” of:
a.Selling;
b.Repairing;
c.Servicing;
d.Storing; or
e.Parking;
vehicles designed for use mainly on public highways. This includes road testing and delivery. This Exclusion (A.6.) does not apply to the ownership, maintenance or use of “your covered auto” by any of the following persons up to the minimum limits of liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged:
a.You;
b.Any “family member”; or
c.Any partner, agent or employee of you or any “family member”.
7.Maintaining or using any vehicle other than “your covered auto” while that “insured” is employed or otherwise engaged in any “business” (other than farming or ranching) not described in Exclusion A.6.
8.Using a vehicle without a reasonable belief that that “insured” is entitled to do so. This Exclusion (A.8.) does not apply to a “family member” using “your covered auto” which is owned by you.
9.For “bodily injury” or “property damage” for which that “insured”:
a.Is an insured under a nuclear energy liability policy; or
b.Would be an insured under a nuclear energy liability policy but for its termination upon exhaustion of its limit of liability.
A nuclear energy liability policy is a policy issued by any of the following or their successors:
a.Nuclear Energy Liability Insurance Association;
b.Mutual Atomic Energy Liability Underwriters; or
c.Nuclear Insurance Association of Canada .
10.For that “insured's” liability arising out of the ownership or operation of a vehicle while it is being used for the delivery of food or products, including but not limited to newspapers and magazines.
This Exclusion (A.10.) does not apply to a delivery by an “insured” as a volunteer.
Analysis
Exclusion six excludes coverage while the insured is in the business of selling, repairing, servicing vehicles etc.; the exclusion has not changed. The difference is in the exception to the exclusion; while liability still applies to those using an insured vehicle they are covered only up to the minimum limits of liability as specified by the state financial responsibility laws.
Exclusion seven has also changed; it now excludes maintaining or using any vehicle other than “your covered auto” (emphasis added) while the insured is engaged in business. The PP 00 01 01 05 excludes the maintaining or use of any vehicle while the insured is engaged in business. Therefore, the covered auto is now covered for certain business use; later in the policy exclusion ten restricts certain business actions.
Also removed from exclusion seven is the language that restores coverage for the maintenance or use of a private passenger auto, pickup, van, or trailer used with an auto, pickup or van. This language restored coverage for the maintenance and use of certain vehicles; this coverage is no longer supplied. The maintenance or use of any vehicle other than the covered auto is excluded.
Exclusions eight and nine are the standard use of a vehicle without reasonable belief to do so and nuclear energy exclusions.
New in this policy is exclusion ten; specifically excluded is liability of an insured due to the ownership/operation of a vehicle being used for the delivery of food or products, including but not limited to magazines and newspapers. This directly excludes the ever present pizza delivery, as well as delivery of other food and products. What is not excluded however is delivery when the insured is acting as a volunteer. Delivery of Meals on Wheels, because it is volunteer work and the driver is not paid for services, is covered. Likewise, if mom loads the car up with Girl Scout cookies and takes them to be delivered that is also on a volunteer basis. While the Girl Scouts sell the cookies as a fundraiser, the insured is not in the business of food delivery and is not being compensated for the delivery of the cookies.
B.We do not provide Liability Coverage for the ownership, maintenance or use of:
1.Any vehicle which:
a.Has fewer than four wheels; or
b.Is designed mainly for use off public roads.
This Exclusion (B.1.) does not apply:
a.While such vehicle is being used by an “insured” in a medical emergency; or
b.To any “trailer”.
2.Any vehicle, other than “your covered auto”, which is:
a.Owned by you; or
b.Furnished or available for your regular use.
3.Any vehicle, other than “your covered auto”, which is:
a.Owned by any “family member”; or
b.Furnished or available for the regular use of any “family member”.
4.Any vehicle for the purpose of:
a.Competing in; or
b.Practicing or preparing for;
any prearranged or organized racing or speed contest.
The exception to the exclusion B.1. has removed the language for non-owned golf carts. Therefore, liability coverage is not provided for the use or maintenance of non-owned golf carts. If the insured has one too many drinks on the tenth hole and runs over a caddie with the courses' golf cart, there is no coverage.
The exception to exclusion B.3., that the exclusion does not apply to the named insured while maintaining or occupying a vehicle owned or furnished to a family member has been removed. This restricts coverage so that coverage is not provided for a vehicle owned or available to a family member. For example, the named insured's oldest son still lives at home. Because the son's vehicle is first in the driveway, the insured borrows the vehicle to run an errand. The insured has an at fault accident in his son's vehicle on the way back home. Under this policy, there is no liability coverage for the insured for the use of his son's vehicle.
C.To the extent that the limits of liability for this coverage exceed the minimum limits of liability required by the financial responsibility law of the state in which “your covered auto” is principally garaged, we do not provide Liability Coverage for any “insured”:
1.While operating a vehicle while that “insured” is under the influence of:
a.Alcohol; or
b.A controlled substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs.
This Exclusion (C.1.) does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.
2.Who causes “bodily injury” or “property damage” while committing a felony.
3.Who causes “bodily injury” or “property damage” while seeking to avoid lawful apprehension or arrest by a law enforcement official.
4.While operating a vehicle without a valid driver's license or permit.
5.Maintaining or using “your covered auto” while that “insured” is employed or otherwise engaged in any “business” (other than farming or ranching) not described in Exclusion A.6.
This Exclusion (C.5.) does not apply to the maintenance or use of a “your covered auto” if you have notified us before the accident that such “your covered auto” will be used in “business”.
6.While operating a vehicle if that “insured” is a “family member” or other person who is a resident of your household, unless you have notified us before the accident that such “family member” or person is an operator.
D.We do not provide Liability Coverage for punitive or exemplary damages.
Section C is completely new language; the liability limits available are restricted to the state minimum limits when an insured is impaired, has committed certain violations, or has used the vehicle in business that is not described in exclusion A.6. The business of selling, servicing, storing, or parking vehicles is excluded in A.6.
The liability limits are restricted to the state minimum limits if the insured is driving while under the influence of alcohol or controlled substances, which include but aren't limited to cocaine, LSD, narcotics and marijuana. This does not include prescription drugs that are being used in accordance with the orders of a licensed physician.
If the insured is driving without a valid driver's license/permit, causes bodily injury or property damage while committing a felony or trying to avoid arrest the minimum liability limits apply. For example, if the insured is the getaway driver for a bank robbery and in the process of trying to escape strikes another vehicle, only minimum limits are available.
Also restricted to minimum limits is the use of a vehicle when the insured is engaged in business other than farming and ranching and is not described in exclusion A.6, which excludes the business of selling, servicing, storing, or parking vehicles. However, if the insured has notified the carrier that the auto is going to be used in business, the exclusion does not apply.
If the insured has not notified the carrier that a family member or other resident of the household is an operator of the vehicle, liability coverage is restricted. For example, Uncle George moved into the house right after the policy was issued, and was never declared an operator of the vehicle. Uncle George uses the vehicle and causes an accident; only the minimum liability limits will apply. If Cousin Bob later moves in with the insured and the insured advises the carrier that Cousin Bob will also be driving the vehicles, then the limit of liability as shown on the declarations will apply to any accident Bob may have.
LIMIT OF LIABILITY
A.The limit of liability shown in the Declarations for each person for Bodily Injury Liability is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of “bodily injury” sustained by any one person in any one auto accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for Bodily Injury Liability is our maximum limit of liability for all damages for “bodily injury” resulting from any one auto accident.
The limit of liability shown in the Declarations for each accident for Property Damage Liability is our maximum limit of liability for all “property damage” resulting from any one auto accident.
This is the most we will pay regardless of the number of:
1.”Insureds”;
2.Claims made;
3.Vehicles or premiums shown in the Declarations; or
4.Vehicles involved in the auto accident.
B.If Liability Coverage is payable on behalf of any person other than you or any “family member”:
1.That part of the limit of liability shown in the Declarations for each person for Bodily Injury Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which “your covered auto” is principally garaged is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of “bodily injury” sustained by any one person in any one auto accident.
2.Subject to this limit for each person, that part of the limit of liability shown in the Declarations for each accident for Bodily Injury Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which “your covered auto” is principally garaged is our maximum limit of liability for all damages for “bodily injury” resulting from any one auto accident.
3.That part of the limit of liability shown in the Declarations for each accident for Property Damage Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which “your covered auto” is principally garaged is our maximum limit of liability for all “property damage” resulting from any one auto accident.
This is the most we will pay regardless of the number of:
1.”Insureds”;
2.Claims made;
3.Vehicles or premiums shown in the Declarations; or
4.Vehicles involved in the auto accident.
This Section (B.) will not change our limit of liability.
C.No one will be entitled to receive duplicate payments for the same elements of loss under this coverage and:
1.Part B or Part C of this policy; or
2.Any Underinsured Motorists Coverage provided by this policy.
Analysis
Section A of the limit of liability clause is the standard policy language. Section B is an entirely new section, and states that if liability coverage is payable on behalf of someone other than the named insured or a family member, the limit of liability for bodily injury will be the state financial responsibility minimum limit. For example, the insured loans the vehicle to a friend who has an at fault accident. The maximum amount of liability coverage that will be paid is the state minimum limits, regardless of the limits of the policy.
This applies to bodily injury for any one person, bodily injury for any one auto accident, and property damage from any one accident, regardless of the number of insureds, claims made, vehicles involved or vehicles shown in the declarations. The section does not change the overall policy limit of liability. The policy limits as listed on the declarations are available for the insureds or family members; it is other persons who are restricted to minimum limits.
Section C which deals with duplicate payments is the standard language that prevents duplicate payments for the same element of loss under separate coverages.
OUT OF STATE COVERAGE
If an auto accident to which this policy applies occurs in any state or province other than the one in which “your covered auto” is principally garaged, we will interpret your policy for that accident as follows:
A.If the state or province has:
1.A financial responsibility or similar law specifying limits of liability for “bodily injury” or “property damage” higher than the limit shown in the Declarations, your policy will provide the higher specified limit.
2.A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage.
B.No one will be entitled to duplicate payments for the same elements of loss.
FINANCIAL RESPONSIBILITY
When this policy is certified as future proof of financial responsibility, this policy shall comply with the law to the extent required.
OTHER INSURANCE
If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own, including any vehicle while used as a temporary substitute for “your covered auto”, shall be excess over any other collectible insurance.
Analysis
The out of state coverage, financial responsibility and other insurance provisions are the standard provisions.
INSURING AGREEMENT
A.We will pay reasonable expenses incurred for necessary medical and funeral services because of “bodily injury”:
1.Caused by accident; and
2.Sustained by an “insured”.
We will pay only those expenses incurred for services rendered within 3 years from the date of the accident.
B.”Insured” as used in this Part means:
1.You or any “family member”:
a.While “occupying”; or
b.As a pedestrian when struck by;
a motor vehicle designed for use mainly on public roads or a trailer of any type.
2.Any other person while “occupying” “your covered auto”.
EXCLUSIONS
We do not provide Medical Payments Coverage for any “insured” for “bodily injury”:
1.Sustained while “occupying” any motorized vehicle having fewer than four wheels.
2.Sustained while “occupying” “your covered auto” when it is being used as a public or livery conveyance. This Exclusion (2.) does not apply to a share-the-expense car pool.
3.Sustained while “occupying” any vehicle located for use as a residence or premises.
4.Occurring during the course of employment if workers' compensation benefits are required or available for the “bodily injury”.
5.Sustained while “occupying”, or when struck by, any vehicle (other than “your covered auto”) which is:
a.Owned by you; or
b.Furnished or available for your regular use.
Analysis
The medical payments insuring agreement is identical to the one in policy PP 00 01 01 05 and is the standard agreement. The first five exclusions are the standard medical payments exclusions, including when an insured is occupying a vehicle with less than four wheels, when vehicles are used as a residence, when in a vehicle owned by the named insured and not “your covered auto.”
6.Sustained while “occupying”, or when struck by, any vehicle (other than “your covered auto”) which is:
a.Owned by any “family member”; or
b.Furnished or available for the regular use of any “family member”.
7.Sustained while “occupying” a vehicle without a reasonable belief that that “insured” is entitled to do so. This Exclusion (7.) does not apply to a “family member” using “your covered auto” which is owned by you.
8.Sustained while “occupying” a vehicle other than “your covered auto” when it is being used in the “business” of an “insured”.
9.Caused by or as a consequence of:
a.Discharge of a nuclear weapon (even if accidental);
b.War (declared or undeclared);
c.Civil war;
d.Insurrection; or
e.Rebellion or revolution.
10.From or as a consequence of the following, whether controlled or uncontrolled or however caused:
a.Nuclear reaction;
b.Radiation; or
c.Radioactive contamination.
11.Sustained while “occupying” any vehicle for the purpose of:
a.Competing in; or
b.Practicing or preparing for;
any prearranged or organized racing or speed contest.
Analysis
While these exclusions are mostly the standard exclusions, there are some language deletions and additions. The exception to exclusion six that said the exclusion did not apply to the named insured has been removed. Therefore, the named insured is not covered while occupying or struck by a vehicle owned or available to a family member. The exclusion itself has not changed. As in the earlier example where the insured borrowed the son's vehicle to run an errand, if the insured is injured in an accident, medical payments coverage is not available under this policy for the insured.
Exclusion eight both adds and removes language. The standard exclusion removes coverage when the insured is occupying a vehicle when it is being used in the business of an insured; exclusion eight now narrows the exclusion to only a vehicle other than (emphasis added) “your covered auto”. There is coverage for use of the covered auto used in certain business pursuits. The exception to this exclusion that provided coverage for bodily injury while occupying a private passenger auto, pickup, van, or trailer used with any of those vehicles has been removed. Therefore, if the insured is injured in an accident in any vehicle other than a covered auto being used in the business of the insured, then no medical payments coverage is available for the insured. For example, the insured owns a bakery and borrows her partner's vehicle to visit with suppliers. While on the way to the meeting the insured is in an accident and is injured. Since the insured was using the vehicle in her business, and the vehicle did not belong to the insured or a family member, no medical payments coverage is available.
Exclusions nine and ten are the standard exclusions and have not been changed; they exclude bodily injury caused from war, civil war, nuclear reaction, etc.
The racing exclusion has been broadened to exclude racing of any sort, whether inside a facility designed for racing or not. Therefore street racing is now excluded.
12.Sustained while “occupying” “your covered auto” when it is being used for the delivery of food or products, including but not limited to newspapers and magazines.
This Exclusion (12.) does not apply to a delivery by an “insured” as a volunteer.
13.Sustained while operating a vehicle while that “insured” is under the influence of alcohol or a controlled substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs.
This Exclusion (13.) does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.
14.Sustained while committing a felony.
15.Sustained while seeking to avoid lawful apprehension or arrest by a law enforcement official.
16.Sustained while operating a vehicle without a valid driver's license or permit.
17.Sustained while “occupying” “your covered auto” when it is being used in the “business” of an “insured”.
This Exclusion (17.) does not apply to “bodily injury” sustained while “occupying” a “your covered auto” if you have notified us before the accident that such “your covered auto” will be used in “business”.
18.Sustained while operating a vehicle if that “insured” is a “family member” or other person who is a resident of your household, unless you have notified us before the accident that such “family member” or person is an operator.
Analysis
Seven new exclusions have been added; they are similar to the exclusions that have been added to the liability coverage. The use of the vehicle for food or product delivery is excluded unless it is on a volunteer basis only. Any bodily injury sustained by an insured while the insured was operating a vehicle under the influence of alcohol or controlled substances is excluded. The use of prescription medications under a doctor's orders is not included in this exclusion.
Also excluded from any coverage for medical payments are injuries sustained while engaged in the following actions: committing a felony, attempting to avoid arrest, driving without a valid driver's license, and occupying a vehicle while being used in the business of an insured. If the insured notified the company before the accident that the vehicle was being used in business, coverage is available. The same applies if an insured is a family member or other resident in the household. If the carrier has not been advised that the person will be operating the vehicle, then no medical payments coverage is available. This avoids the situation where family members with bad driving histories are in the household but somehow “forgotten” on the application for insurance. The carrier is excluding risks for which they are not collecting premium.
LIMIT OF LIABILITY
A.The limit of liability shown in the Declarations for this coverage is our maximum limit of liability for each person injured in any one accident. This is the most we will pay regardless of the number of:
1.”Insureds”;
2.Claims made;
3.Vehicles or premiums shown in the Declarations; or
4.Vehicles involved in the accident.
B.No one will be entitled to receive duplicate payments for the same elements of loss under this coverage and:
1.Part A or Part C of this policy; or
2.Any Underinsured Motorists Coverage provided by this policy.
OTHER INSURANCE
If there is other applicable auto medical payments insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own, including any vehicle while used as a temporary substitute for “your covered auto”, shall be excess over any other collectible auto insurance providing payments for medical or funeral expenses.
Analysis
The limit of liability language and other insurance language have not changed from the language used in prior policies.
Part C-Uninsured Motorists Coverage
INSURING AGREEMENT
A.We will pay compensatory damages which an “insured” is legally entitled to recover from the owner or operator of an “uninsured motor vehicle” because of “bodily injury”:
1.Sustained by an “insured”; and
2.Caused by an accident.
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the “uninsured motor vehicle”.
Any judgment for damages arising out of a suit brought without our written consent is not binding on us.
B.”Insured” as used in this Part means:
1.You.
2.Any “family member” “occupying” “your covered auto”.
3.Any other person “occupying” “your covered auto” up to the minimum limits of liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged.
4.Any person for damages that person is entitled to recover because of “bodily injury” to which this coverage applies sustained by a person described in 1., 2. or 3. above.
C.”Uninsured motor vehicle” means a land motor vehicle or trailer of any type:
1.To which no bodily injury liability bond or policy applies at the time of the accident.
2.To which a bodily injury liability bond or policy applies at the time of the accident. In this case its limit for bodily injury liability must be less than the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged.
3.Which is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:
a.You or any “family member”;
b.A vehicle which you or any “family member” are “occupying”; or
c.”Your covered auto”.
4.To which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insuring company:
a.Denies coverage; or
b.Is or becomes insolvent.
However, “uninsured motor vehicle” does not include any vehicle or equipment:
1.Owned by or furnished or available for the regular use of you or any “family member”.
2.Owned or operated by a self-insurer under any applicable motor vehicle law, except a self-insurer which is or becomes insolvent.
3.Owned by any governmental unit or agency.
4.Operated on rails or crawler treads.
5.Designed mainly for use off public roads while not on public roads.
6.While located for use as a residence or premises.
Analysis
The insuring agreement for uninsured motorists coverage has modifications in the definition of an “insured”. In order for a family member to be considered an “insured”, the family member must be occupying “your covered auto”. Other persons while occupying “your covered auto” are covered only up to the state minimum limits, regardless of the actual policy limits of the policy.
EXCLUSIONS
A.We do not provide Uninsured Motorists Coverage for “bodily injury” sustained:
1.By an “insured” while “occupying”, or when struck by, any motor vehicle owned by that “insured” which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle.
2.By any “family member” while “occupying”, or when struck by, any motor vehicle you own which is insured for this coverage on a primary basis under any other policy.
B.We do not provide Uninsured Motorists Coverage for “bodily injury” sustained by any “insured”:
1.If that “insured” or the legal representative settles the “bodily injury” claim and such settlement prejudices our right to recover payment.
2.While “occupying” “your covered auto” when it is being used as a public or livery conveyance. This Exclusion (B.2.) does not apply to a share-the-expense car pool.
3.Using a vehicle without a reasonable belief that that “insured” is entitled to do so. This Exclusion (B.3.) does not apply to a “family member” using “your covered auto” which is owned by you.
4.While “occupying” “your covered auto” when it is being used for the delivery of food or products, including but not limited to newspapers and magazines.
This Exclusion (B.4.) does not apply to a delivery by an “insured” as a volunteer.
C.This coverage shall not apply directly or indirectly to benefit any insurer or self-insurer under any of the following or similar law:
1.Workers' compensation law; or
2.Disability benefits law.
D.We do not provide Uninsured Motorists Coverage for punitive or exemplary damages.
Analysis
The exclusions are standard with one new addition. Uninsured coverage does not apply when the vehicle is being used in business for the delivery of food or products. The exception to this exclusion is for delivery when an insured is acting as a volunteer. Meals on Wheels, for example.
LIMIT OF LIABILITY
A.The limit of liability shown in the Declarations for each person for Uninsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of “bodily injury” sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for Uninsured Motorists Coverage is our maximum limit of liability for all damages for “bodily injury” resulting from any one accident.
This is the most we will pay regardless of the number of:
1.”Insureds”;
2.Claims made;
3.Vehicles or premiums shown in the Declarations; or
4.Vehicles involved in the accident.
B.If “bodily injury” is sustained by an “insured” other than you or any “family member”:
1.That part of the limit of liability shown in the Declarations for each person for Uninsured Motorists Coverage that does not exceed the minimum limits required by the financial responsibility law of the state in which “your covered auto” is principally garaged is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of “bodily injury” sustained by any one person in any one accident.
2.Subject to this limit for each person, that part of the limit of liability shown in the Declarations for each accident for Uninsured Motorists Coverage that does not exceed the minimum limits required by the financial responsibility law of the state in which “your covered auto” is principally garaged is our maximum limit of liability for all damages for “bodily injury” resulting from any one accident.
This is the most we will pay regardless of the number of:
1.”Insureds”;
2.Claims made;
3.Vehicles or premiums shown in the Declarations; or
4.Vehicles involved in the accident.
This Section (B.) will not change our limit of liability.
C.No one will be entitled to receive duplicate payments for the same elements of loss under this coverage and:
1.Part A or Part B of this policy; or
2.Any Underinsured Motorists Coverage provided by this policy.
D.We will not make a duplicate payment under this coverage for any element of loss for which payment has been made by or on behalf of persons or organizations who may be legally responsible.
E.We will not pay for any element of loss if a person is entitled to receive payment for the same element of loss under any of the following or similar law:
1.Workers' compensation law; or
2.Disability benefits law.
Analysis
The limit of liability for uninsured motorists coverage is the standard policy language with a new restriction in Section B. Section B restricts coverage for injury to an insured who is someone other than the named insured or any family member. The restriction is that the maximum limit that is paid out is the state minimum liability limit. If the policy has limits of 50/100 and the state financial responsibility limit is 20/40, then the most that will be paid in the event a non-family member, or non-named insured, is injured is $20,000 per person, $40,000 per accident. This is the most that is paid regardless of the number of insureds, claims made, vehicles involved in the accident or vehicles listed on the policy.
OTHER INSURANCE
If there is other applicable insurance available under one or more policies or provisions of coverage that is similar to the insurance provided under this Part of the policy:
1.Any recovery for damages under all such policies or provisions of coverage may equal but not exceed the highest applicable limit for any one vehicle under any insurance providing coverage on either a primary or excess basis.
2.Any insurance we provide with respect to a vehicle you do not own, including any vehicle while used as a temporary substitute for “your covered auto”, shall be excess over any collectible insurance providing such coverage on a primary basis.
3.If the coverage under this policy is provided:
a.On a primary basis, we will pay only our share of the loss that must be paid under insurance providing coverage on a primary basis. Our share is the proportion that our limit of liability bears to the total of all applicable limits of liability for coverage provided on a primary basis.
b.On an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our limit of liability bears to the total of all applicable limits of liability for coverage provided on an excess basis.
ARBITRATION
A.If we and an “insured” do not agree:
1.Whether that “insured” is legally entitled to recover damages; or
2.As to the amount of damages which are recoverable by that “insured”;
from the owner or operator of an “uninsured motor vehicle”, then the matter may be arbitrated. However, disputes concerning coverage under this Part may not be arbitrated.
Both parties must agree to arbitration. If so agreed, each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction.
B.Each party will:
1.Pay the expenses it incurs; and
2.Bear the expenses of the third arbitrator equally.
C.Unless both parties agree otherwise, arbitration will take place in the county in which the “insured” lives. Local rules of law as to procedure and evidence will apply. A decision agreed to by at least two of the arbitrators will be binding as to:
1.Whether the “insured” is legally entitled to recover damages; and
2.The amount of damages. This applies only if the amount does not exceed the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged. If the amount exceeds that limit, either party may demand the right to a trial. This demand must be made within 60 days of the arbitrators' decision. If this demand is not made, the amount of damages agreed to by the arbitrators will be binding
Analysis
The other insurance and arbitration clauses in this policy are the standard ISO provisions. The language is identical to that used in the PP 00 01 01 05.
INSURING AGREEMENT
A.We will pay for direct and accidental loss to “your covered auto” or any “non-owned auto”, including their equipment, minus any applicable deductible shown in the Declarations. We will pay for loss to “your covered auto” caused by:
1.Other than “collision” only if the Declarations indicate that Other Than Collision Coverage is provided for that auto.
2.”Collision” only if the Declarations indicate that Collision Coverage is provided for that auto.
If there is a loss to a “non-owned auto”, we will provide the broadest coverage applicable to any “your covered auto” shown in the Declarations.
If there is a loss to any auto or “trailer” you do not own while used as a temporary substitute for “your covered auto”, such temporary substitute will get the same coverage applicable to the “your covered auto” that is out of normal use.
B.”Collision” means the upset of “your covered auto” or a “non-owned auto” or their impact with another vehicle or object.
Loss caused by the following is considered other than “collision”:
1.Missiles or falling objects;
2.Fire;
3.Theft or larceny;
4.Explosion or earthquake;
5.Windstorm;
6.Hail, water or flood;
7.Malicious mischief or vandalism;
8.Riot or civil commotion;
9.Contact with bird or animal; or
10.Breakage of glass.
If breakage of glass is caused by a “collision”, you may elect to have it considered a loss caused by “collision”.
C.”Non-owned auto” means:
1.Any:
a.Private passenger auto or “trailer”; or
b.Pickup or van that has a Gross Vehicle Weight Rating of 10,000 lbs. or less;
not owned by or furnished or available for the regular use of you or any “family member” while in the custody of or being operated by you.
2.”Non-owned auto” does not include any vehicle used as a temporary substitute for “your covered auto” which is out of normal use because of its:
a.Breakdown;
b.Repair;
c.Servicing;
d.Loss; or
e.Destruction.
Analysis
One of the major changes in the physical damage coverage section of this policy is the elimination of all transportation expenses; this part of the policy pays for direct damage to the vehicle only, and any expense for rental vehicles when an insured or non-owned vehicle has been damaged or stolen is not included.
In part A of the insuring agreement, the language that allowed only the highest deductible to be charged to the insured when more than one covered auto or non-owned auto results from the same collision has been removed. Therefore, if the insured has an accident with another of his vehicles, the deductible would be charged on both vehicles, instead of just the largest deductible being used. For example, the insured has a $250 collision deductible on vehicle A and a $500 deductible on vehicle B. In leaving the premises the insured backs into vehicle B with vehicle A, causing damage to both vehicles. In the PP 00 01 01 05, the $500 deductible would be applied once to both losses. In this policy, the $500 deductible is applied to vehicle B and the $250 deductible is applied to vehicle A, resulting in a $750.00 expense to the insured.
This policy makes a distinction between a non-owned auto and a non-owned auto or trailer being used as a temporary substitute for a vehicle that is out of normal use. The coverage for any non-owned auto is the standard clause that provides the broadest coverage applicable to any covered auto on the declarations.
However, when a non-owned auto or trailer is being used specifically as a temporary substitute for a covered vehicle on the policy, the coverage provided is the same as the coverage that is on the out of service vehicle. For example, the policy has a 2006 Mercedes with collision and other than collision coverage and a 1999 Chevy with other than collision coverage only. The Chevy is out of service, so the insured uses a non-owned vehicle as a substitute and has an accident. As the Chevy only has other than collision coverage on it, that is the only physical damage coverage available to the non-owned vehicle. The non-owned vehicle does not get the broader coverage of the Mercedes since it was not substituting for the Mercedes.
The definitions of collision and other than collision are the standard policy definitions.
The definition of non-owned auto has been revised; pickups and vans have been specified as having a gross vehicle weight of less than 10,000 pounds, and coverage is provided while the non-owned vehicle is being operated only by the named insured, and not any family member. A vehicle being used as temporary substitute for a covered auto that is out of use is not considered to be a “non-owned auto.”
EXCLUSIONS
We will not pay for:
1.Loss to “your covered auto” or any “non-owned auto” which occurs while it is being used as a public or livery conveyance. This Exclusion (1.) does not apply to a share-the-expense car pool.
2.Damage due and confined to:
a.Wear and tear;
b.Freezing;
c.Mechanical or electrical breakdown or failure; or
d.Road damage to tires.
This Exclusion (2.) does not apply if the damage results from the total theft of “your covered auto” or any “non-owned auto”.
3.Loss due to or as a consequence of:
a.Radioactive contamination;
b.Discharge of any nuclear weapon (even if accidental);
c.War (declared or undeclared);
d.Civil war;
e.Insurrection; or
f.Rebellion or revolution.
4.Loss to any electronic equipment that reproduces, receives or transmits audio, visual or data signals. This includes but is not limited to:
a.Radios and stereos;
b.Tape decks;
c.Compact disk systems;
d.Navigation systems;
e.Internet access systems;
f.Personal computers;
g.Video entertainment systems;
h.Telephones;
i.Televisions;
j.Two-way mobile radios;
k.Scanners; or
l.Citizens band radios.
This Exclusion (4.) does not apply to electronic equipment that is permanently installed in “your covered auto” or any “non-owned auto” by the auto manufacturer.
5.Loss to tapes, records, disks or other media used with equipment described in Exclusion 4.
6.A total loss to “your covered auto” or any “non-owned auto” due to destruction or confiscation by governmental or civil authorities.
This Exclusion (6.) does not apply to the interests of Loss Payees in “your covered auto”.
7.Loss to:
a.A “trailer”, camper body, or motor home, which is not shown in the Declarations; or
b.Facilities or equipment used with such “trailer”, camper body or motor home. Facilities or equipment include but are not limited to:
(1)Cooking, dining, plumbing or refrigeration facilities;
(2)Awnings or cabanas; or
(3)Any other facilities or equipment used with a “trailer”, camper body, or motor home.
This Exclusion (7.) does not apply to a:
a.”Trailer”, and its facilities or equipment, which you do not own; or
b.”Trailer”, camper body, or the facilities or equipment in or attached to the “trailer” or camper body, which you:
(1)Acquire during the policy period; and
(2)Ask us to insure within 14 days after you become the owner.
8.Loss to any “non-owned auto”, or any vehicle used as a temporary substitute for “your covered auto”, when used by you or any “family member” without a reasonable belief that you or that “family member” are entitled to do so.
9.Loss to equipment designed or used for the detection or location of radar or laser.
10.Loss to any custom furnishings or equipment in or upon any pickup or van. Custom furnishings or equipment include but are not limited to:
a.Special carpeting or insulation;
b.Furniture or bars;
c.Height-extending roofs; or
d.Custom murals, paintings or other decals or graphics.
This Exclusion (10.) does not apply to a cap, cover or bedliner in or upon any “your covered auto” which is a pickup.
11.Loss to any “non-owned auto” being maintained or used by any person while employed or otherwise engaged in the “business” of:
a.Selling;
b.Repairing;
c.Servicing;
d.Storing; or
e.Parking;
vehicles designed for use on public highways. This includes road testing and delivery.
Analysis
Exclusions one through three are the standard property damage exclusions; exclusion four has one minor change in the exception to the exclusion. The exception now states that the exclusion does not apply to electronic equipment permanently installed in “your covered auto” or a “non-owned auto” the equipment when it was installed by the auto manufacturer. The insured is not covered if he purchases additional electronic equipment and installs it himself into the vehicle. For example, the insured buys a 2007 Toyota with a built in navigation system; that navigation system is covered under the policy. The insured enjoys the navigation system so much that he buys one for his Mazda and has it installed. That navigation system would not be covered; it was not installed by the manufacturer of the auto. The implication is that the vehicle must be built with the equipment in order for the exclusion to be negated. Anytime the equipment is added to the vehicle after the original purchase it is considered not installed by the manufacturer.
Exclusions five, six and seven are standard language. Exclusion eight, loss to any “non-owned auto” when used by a named insured or family member without a reasonable belief they can do so also applies to autos serving as temporary substitutes for a covered auto.
Exclusions nine, ten and eleven are standard exclusions and have not been revised.
12.Loss to “your covered auto” or any “non-owned auto” for the purpose of:
a.Competing in; or
b.Practicing or preparing for;
any prearranged or organized racing or speed contest.
13.Loss to, or loss of use of, a “non-owned auto”, or any vehicle used as a temporary substitute for “your covered auto”, rented by:
a.You; or
b.Any “family member”;
if a rental vehicle company is precluded from recovering such loss or loss of use, from you or that “family member”, pursuant to the provisions of any applicable rental agreement or state law.
14.Loss to any custom furnishings or equipment in or upon any private passenger auto. Custom furnishings or equipment include but are not limited to:
a.Body, engine, exhaust or suspension enhancers;
b.Winches, or anti-roll or anti-sway bars;
c.Custom grilles, louvers, side pipes, hood scoops or spoilers;
d.Custom wheels, tires or spinners; or
e.Custom chrome, paintwork, decals or other graphics.
15.Loss to “your covered auto” or any “non-owned auto” which occurs while it is being used for the delivery of food or products, including but not limited to newspapers and magazines.
This Exclusion (15.) does not apply to a delivery by any person as a volunteer.
16.Loss to “your covered auto” or any “non-owned auto” while being operated by any person while under the influence of alcohol or a controlled substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs.
This Exclusion (16.) does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.
17.Loss to any “non-owned auto” being maintained or used by any person while employed or otherwise engaged in any “business” not described in Exclusion 11.
18.Loss to “your covered auto” being maintained or used by any person while employed or otherwise engaged in any “business”.
This Exclusion (18.) does not apply to the maintenance or use of a “your covered auto” if you have notified us before the loss that such “your covered auto” will be used in “business”.
19.Loss to “your covered auto” or any “non-owned auto” while being operated by any “family member” or other person who is a resident of your household unless you have notified us before the loss that such “family member” or person is an operator.
20.Loss to “your covered auto” while rented or leased to any organization or person other than you or any “family member”.
Analysis
The exclusion that deals with racing and has traditionally dealt with racing facilities has been expanded. The language that restricted the exclusion to loss occurring inside a facility designed for racing has been removed. Therefore any racing behavior, whether conducted inside a facility, in a parking lot, or out on the street, has been excluded.
Exclusion thirteen, which deals with non-owned autos, includes vehicles used as temporary substitutes in the restriction of coverage if the vehicle is rented and the rental company is precluded from recovering such loss by a rental agreement or state law.
There are several new exclusions in this policy. The first new exclusion removes coverage for any custom furnishings or equipment in or on the private passenger vehicle. A brief list is provided but it is not all inclusive. Therefore, any custom furnishings that may be added are not covered; custom paint jobs, spinners, custom seats, etc.
Another new exclusion is that of loss to “your covered auto” or a “non-owned auto” while it is being used for the delivery of food or products. Again, the exception to this is if the delivery is on a volunteer basis, such as Meals on Wheels, coverage is provided.
Exclusion sixteen removes coverage to “your covered auto” or a “non-owned auto” if the driver is under the influence of alcohol or a controlled substance. Prescription medications being legitimately used at a physician's instruction are an exception to this exclusion.
Also excluded is the loss to any “non-owned auto” while being used by any person while employed or engaged in business that is not described in exclusion eleven. Exclusion eleven specifically removes coverage for the use of a “non-owned auto” in the business of selling, repairing, servicing, storing or parking vehicles, including road testing and delivering vehicles.
Loss to “your covered auto”, while being used in business is excluded as well, unless the insurer was notified before the accident that the vehicle was being used in business.
When a covered vehicle is damaged while being operated by a family member or resident of the household, the damages are not covered unless the carrier has been advised that the family member or other person is an operator of the vehicle.
The final exclusion is for damage to covered vehicles the insured has rented or leased to any person or organization other than a family member.
LIMIT OF LIABILITY
A.Our limit of liability for loss will be the lesser of the:
1.Actual cash value of the stolen or damaged property; or
2.Amount necessary to repair or replace the property with other property of like kind and quality.
However, the most we will pay for loss to any “non-owned auto”, or any temporary substitute for “your covered auto”, which is a trailer is $1500.
B.An adjustment for depreciation and physical condition will be made in determining actual cash value in the event of a total loss.
C.If a repair or replacement results in better than like kind or quality, we will not pay for the amount of the betterment.
PAYMENT OF LOSS
We may pay for loss in money or repair or replace the damaged or stolen property. We may, at our expense, return any stolen property to:
1.You; or
2.The address shown in this policy.
If we return stolen property we will pay for any damage resulting from the theft. We may keep all or part of the property at an agreed or appraised value.
If we pay for loss in money, our payment will include the applicable sales tax for the damaged or stolen property.
NO BENEFIT TO BAILEE
This insurance shall not directly or indirectly benefit any carrier or other bailee for hire.
OTHER SOURCES OF RECOVERY
If other sources of recovery also cover the loss, we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a “non-owned auto” or any vehicle used as a temporary substitute for “your covered auto” shall be excess over any other collectible source of recovery including, but not limited to:
1.Any coverage provided by the owner of the “non-owned auto” or any vehicle used as a temporary substitute for “your covered auto”;
2.Any other applicable physical damage insurance;
3.Any other source of recovery applicable to the loss.
APPRAISAL
A.If we and you do not agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. The appraisers will state separately the actual cash value and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
1.Pay its chosen appraiser; and
2.Bear the expenses of the appraisal and umpire equally.
B.We do not waive any of our rights under this policy by agreeing to an appraisal.
Analysis
Under the limit of liability, the $1,000 maximum for a loss to electronic equipment that appears in the PP 00 01 01 05 has been removed from this policy. The limit for loss to a “non-owned auto” of $1,500 now also includes any temporary substitute for “your covered auto”. The remaining clauses in the limit of liability are the standard policy language, as are the payment of loss and no benefit to bailee sections.
The other sources of recovery section has the recurring inclusion of a temporary substitute for “your owned auto” with standard clauses in reference to a “non-owned auto.”
We have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us:
A.We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses.
B.A person seeking any coverage must:
1.Cooperate with us in the investigation, settlement or defense of any claim or suit.
2.Promptly send us copies of any notices or legal papers received in connection with the accident or loss.
3.Submit, as often as we reasonably require:
a.To physical exams by physicians we select. We will pay for these exams.
b.To examination under oath and subscribe the same.
4.Authorize us to obtain:
a.Medical reports; and
b.Other pertinent records.
5.Submit a proof of loss when required by us.
C.A person seeking Uninsured Motorists Coverage must also:
1.Promptly notify the police if a hit-and-run driver is involved.
2.Promptly send us copies of the legal papers if a suit is brought.
D.A person seeking Coverage For Damage To Your Auto must also:
1.Take reasonable steps after loss to protect “your covered auto” or any “non-owned auto” and their equipment from further loss. We will pay reasonable expenses incurred to do this.
2.Promptly notify the police if “your covered auto” or any “non-owned auto” is stolen.
3.Permit us to inspect and appraise the damaged property before its repair or disposal.
Analysis
The standard duties after an accident or loss are included in this policy. The insured is to notify the company, cooperate with the investigation, submit to exams, provide documentation upon request and take reasonable steps to protect the vehicle from further damage after a loss.
BANKRUPTCY
Bankruptcy or insolvency of the “insured” shall not relieve us of any obligations under this policy.
CHANGES
A.This policy contains all the agreements between you and us. Its terms may not be changed or waived except by endorsement issued by us.
B.If there is a change to the information used to develop the policy premium, we may adjust your premium. Changes during the policy term that may result in a premium increase or decrease include, but are not limited to, changes in:
1.The number, type or use classification of insured vehicles;
2.Operators using insured vehicles;
3.The place of principal garaging of insured vehicles;
4.Coverage, deductible or limits.
If a change resulting from A. or B. requires a premium adjustment, we will make the premium adjustment in accordance with our manual rules.
C.If we make a change which broadens coverage under this edition of your policy without additional premium charge, that change will automatically apply to your policy as of the date we implement the change in your state. This Paragraph (C.) does not apply to changes implemented with a general program revision that includes both broadenings and restrictions in coverage, whether that general program revision is implemented through introduction of:
1.A subsequent edition of your policy; or
2.An Amendatory Endorsement.
FRAUD
We do not provide coverage for any “insured” who has made fraudulent statements or engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under this policy.
LEGAL ACTION AGAINST US
A.No legal action may be brought against us until there has been full compliance with all the terms of this policy. In addition, under Part A, no legal action may be brought against us until:
1.We agree in writing that the “insured” has an obligation to pay; or
2.The amount of that obligation has been finally determined by judgment after trial.
B.No person or organization has any right under this policy to bring us into any action to determine the liability of an “insured”.
OUR RIGHT TO RECOVER PAYMENT
A.If we make a payment under this policy and the person to or for whom payment was made has a right to recover damages from another we shall be subrogated to that right. That person shall do:
1.Whatever is necessary to enable us to exercise our rights; and
2.Nothing after loss to prejudice them.
However, our rights in this Paragraph (A.) do not apply under Part D, against any person using “your covered auto” with a reasonable belief that that person is entitled to do so.
B.If we make a payment under this policy and the person to or for whom payment is made recovers damages from another, that person shall:
1.Hold in trust for us the proceeds of the recovery; and
2.Reimburse us to the extent of our payment.
POLICY PERIOD AND TERRITORY
A.This policy applies only to accidents and losses which occur:
1.During the policy period as shown in the Declarations; and
2.Within the policy territory.
B.The policy territory is:
1.The United States of America , its territories or possessions;
2.Puerto Rico; or
3. Canada .
This policy also applies to loss to, or accidents involving, “your covered auto” while being transported between their ports.
TERMINATION
A.Cancellation
This policy may be cancelled during the policy period as follows:
1.The named insured shown in the Declarations may cancel by:
a.Returning this policy to us; or
b.Giving us advance written notice of the date cancellation is to take effect.
2.We may cancel by mailing to the named insured shown in the Declarations at the address shown in this policy:
a.At least 10 days notice:
(1)If cancellation is for nonpayment of premium; or
(2)If notice is mailed during the first 60 days this policy is in effect and this is not a renewal or continuation policy; or
b.At least 20 days notice in all other cases.
3.After this policy is in effect for 60 days, or if this is a renewal or continuation policy, we will cancel only:
a.For nonpayment of premium; or
b.If your driver's license or that of:
(1)Any driver who lives with you; or
(2)Any driver who customarily uses “your covered auto”;
has been suspended or revoked. This must have occurred:
(1)During the policy period; or
(2)Since the last anniversary of the original effective date if the policy period is other than 1 year; or
c.If the policy was obtained through material misrepresentation.
B.Nonrenewal
If we decide not to renew or continue this policy, we will mail notice to the named insured shown in the Declarations at the address shown in this policy. Notice will be mailed at least 20 days before the end of the policy period. Subject to this notice requirement, if the policy period is:
1.Less than 6 months, we will have the right not to renew or continue this policy every 6 months, beginning 6 months after its original effective date.
2.6 months or longer, but less than one year, we will have the right not to renew or continue this policy at the end of the policy period.
3.1 year or longer, we will have the right not to renew or continue this policy at each anniversary of its original effective date.
C.Automatic Termination
If we offer to renew or continue and you or your representative do not accept, this policy will automatically terminate at the end of the current policy period. Failure to pay the required renewal or continuation premium when due shall mean that you have not accepted our offer.
If you obtain other insurance on “your covered auto”, any similar insurance provided by this policy will terminate as to that auto on the effective date of the other insurance.
D.Other Termination Provisions
1.We may deliver any notice instead of mailing it. Proof of mailing of any notice shall be sufficient proof of notice.
2.If this policy is cancelled, you may be entitled to a premium refund. If so, we will send you the refund. The premium refund, if any, will be computed according to our manuals. However, making or offering to make the refund is not a condition of cancellation.
3.The effective date of cancellation stated in the notice shall become the end of the policy period.
TRANSFER OF YOUR INTEREST IN THIS POLICY
A.Your rights and duties under this policy may not be assigned without our written consent. However, if a named insured shown in the Declarations dies, coverage will be provided for:
1.The surviving spouse if resident in the same household at the time of death. Coverage applies to the spouse as if a named insured shown in the Declarations; and
2.The legal representative of the deceased person as if a named insured shown in the Declarations. This applies only with respect to the representative's legal responsibility to maintain or use “your covered auto”.
B.Coverage will only be provided until the end of the policy period.
TWO OR MORE AUTO POLICIES
If this policy and any other auto insurance policy issued to you by us apply to the same accident, the maximum limit of our liability under all the policies shall not exceed the highest applicable limit of liability under any one policy.
Analysis
The rest of the policy contains standard policy provisions including bankruptcy of the insured, how changes can be made to the policy, cancellations and terminations, and transfer of the insured's interest in the policy. These are all standard policy provisions and no additional language has been added.