Part 4 – Common Conditions

TOPICS COVERED:

Insuring Agreement

Coverage F – Comprehensive

Coverage G – Collision

Coverage H – Towing

Supplemental Coverages – Additional Conditions

Certain Electronic Equipment Coverage

Falling Objects, Glass Breakage, Impact with an Animal / Bird 

Individual Named Insured Coverage

Transportation Expense Coverage – Additional Insurance

Hired Auto Loss of Use Coverage – Additional Insurance

PART III A – MAIN PHYSICAL DAMAGE COVERAGES

INSURING AGREEMENT

1. We provide insurance for those of the following coverages for which a related limit of liability and related premium charge is shown in the Declarations subject to all applicable provisions.
2. Unless otherwise specifically provided in this policy, this insurance applies only to loss that takes place within the applicable coverage territory (Refer to Common Conditions) during the current policy term.
3. Insuring Agreement Qualification

The following Coverages as described below are subject to certain Exclusions and Limitations located in Parts III C and III D.

Analysis:

There are three parts to the physical damage insuring agreement. The first part is the limit agreement, the next part is the agreement to cover a loss as defined in the policy that takes place in the applicable coverage territory during the policy term, in accordance with the Common Conditions in the policy. Lastly, the agreement contains certain exclusions and limitations to coverage as described in Part III C Exclusions/Limitations and in Part  III D Special Physical Damage Conditions.

COVERAGE F – COMPREHENSIVE

We pay for loss to a covered auto, including its equipment, under Comprehensive Coverage resulting from any cause of loss other than the following:

1. The covered auto's collision with another object.
2. The covered auto's overturn.
3. Causes of loss otherwise excluded or limited in this policy.

Analysis:

Comprehensive coverage pays for loss to a covered auto meeting the policy's definition, including its equipment as a result of any cause except the auto's colliding with any object, the covered auto's overturn, or any other cause of loss that is excluded or limited in the policy. For example, if a covered auto slides off the roadway, collides with a fence and then overturns there will not be coverage for this loss under the comprehensive coverage. If however, a covered auto is damaged by a bear searching for food, comprehensive coverage will cover this damage.

COVERAGE G – COLLISION

We pay for loss to a covered auto, including its equipment, under Collision Coverage resulting from the following:

1. The covered auto's collision with another object.
2. The covered auto's overturn.

Analysis:

The collision coverage will cover the type of loss not covered in our first example of comprehensive coverage. If a covered auto slides off the roadway, collides with a fence and then overturns this loss would be covered under the collision coverage. Likewise, backing into a pole, or hitting another vehicle are all collision losses. 

COVERAGE H – TOWING

We pay for towing and labor expenses incurred when a covered private passenger type auto is disabled. The labor expenses are only for labor performed at the place of disablement.

Analysis:

The towing and labor coverage only applies when a covered auto of the private passenger type is disabled. So if a covered car is in an accident and the car is not driveable, this coverage will pay for its tow and any expenses for labor that is necessary at the place where the car became disabled, such as replacing a blown tire so the car can be driven after an accident.

PART III B – SUPPLEMENTAL COVERAGES

The next section describes a number of supplemental coverages provided based on specific circumstances and to the extent that the coverages are applicable to the main coverages provided under the policy.

SUPPLEMENTAL COVERAGES – ADDITIONAL CONDITIONS

We provide the following Supplemental Coverages as extensions of the main coverages but only when, and then to the extent that, such main coverages apply under this policy.

These Supplemental Coverages are subject to all underlying provisions applicable in this policy, except to the extent specifically modified in Part III B.

Analysis:

The supplemental coverages extend coverages that are already provided under the policy, so if the policy does not already provide that specific coverage then the supplemental coverage will not apply, unless otherwise provided for in Part III B of the policy.

1. CERTAIN ELECTRONIC EQUIPMENT COVERAGE

Coverage is extended to the following equipment:

1. Equipment designed solely for the reproduction of sound or video or as a global positioning system (GPS) and accessories used with such equipment, provided such equipment is permanently installed in the covered auto at the time of the loss.
2. Such equipment that is removable from a housing unit which is permanently installed in the covered auto at the time of loss, and such equipment is designed to be solely operated in or upon the covered auto by use of the power from the auto's electrical system.
3. Any other electronic equipment that is:

1. Necessary for the normal operation of the covered auto or the monitoring of the covered auto's operating system; or
2. An integral part of the same unit housing any sound reproducing equipment described in the preceding Paragraph A and permanently installed in the opening of the dash or console of the covered auto normally used by the manufacturer for installation of a radio.

Analysis:

The first supplemental coverage is for certain permanently installed equipment, navigational systems such as Onstar and GPS systems, audio equipment such as stereos, and two-way radios, and CB radios, and video equipment such as dashboard TVs, DVD players, or monitors. The equipment need not be permanently installed by the auto manufacturer; aftermarket equipment is covered so long as it is permanently installed, as described in paragraph C.2., which could include specialty radios, scanners and DVD equipment.

Permanently installed is not defined in the policy, but its meaning was the subject of a 1978 case decided by a New York supreme court appellate division. In that case, Troncillito v. Farm Family Mutual Insurance Co., 63 A.D.2d 1042 (N.Y.A.D. 1978), the court held that a citizens band radio and a scanner bolted to brackets which in turn were bolted to the underside of the insured's truck were permanently installed to the truck. The insured's testimony that he intended to remove the radio and scanner from the truck if it were sold did not alter the status of the equipment. The important factor, in the eyes of the court, was the insured's intent to keep the equipment installed for as long as he owned the truck. The court relied upon a legal definition of "permanent" which stated that "permanent" does not imply a perpetual installation.

Equipment that is removable from a housing unit which is permanently installed in the covered auto at the time of loss, and powered by the auto's electrical system. A housing unit for electrical components for use in the automobile sector includes a housing part configured to be closed in a sealed manner by a housing cover arrangement. The housing cover arrangement comprises a membrane, at least one ventilation opening, a main cover element comprising a recess, and a cover closure element. This has to do with such things as the vehicle's electrical charging unit, battery, ignition system, computer chips, or spark plugs. With the advent of 5G and increasing technology, it is conceivable that this list could grow.

Equipment necessary for operating or monitoring the operations of the covered auto would include virtually anything needed to run the auto or to monitor its operations such as a fuel or temperature sensor. Since equipment is not defined, it will be given its broadest meaning, but it must be something that keeps the auto in operating order or gauges how to keep the auto operational.

2. FALLING OBJECTS, GLASS BREAKAGE, IMPACT WITH AN ANIMAL / BIRD

If the damaged covered auto is insured for Comprehensive Coverage under this policy, we will pay for the following damage under Comprehensive Coverage:

1. Glass breakage.
2. Loss caused by falling objects or missiles.
3. Loss caused by an impact with an animal or bird.

However, you may elect to have glass breakage that results from a covered auto's collision or overturn settled as a Collision Coverage loss.

ANALYSIS:

This supplemental coverage only applies if the insured has purchased Comprehensive coverage under the policy. If so, the policy will pay for three additional comprehensive coverages:

Glass breakage – this covers replacement of windshields or door glass from any cause, so if a rock flies up from the roadway and puts a crack in the windshield this coverage will pay for the window glass repair or its replacement.

The second coverage is for falling objects or missiles. Hopefully no one will have a claim for a falling missile damaging their auto, but if so the damage will be covered here. It is more likely that a wayward baseball could damage an auto, or a tree branch may fall on the roof of an auto. The term missile can also be used generically; Merriam Webster online defines it as: an object (such as a weapon) thrown or projected usually so as to strike something at a distance. So a missile could also be a rock thrown up by a passing truck or a wayward tennis ball that got hit out of the court. So with this coverage, no matter what is falling, if it damages the covered auto, this supplementary coverage will kick in.

Under this supplemental coverage, a loss will be covered if the covered auto comes into contact with an animal or bird causing damage to the auto. While rare, recently a car was damaged by a flying eagle. This loss would be covered if comprehensive coverage was purchased under this form. It is very common for autos to come into contact with animals such as deer, elk, moose or even bears. This type of loss would also be covered by this supplementary coverage.

3. INDIVIDUAL NAMED INSURED COVERAGE

1. If you are an individual, coverage is extended as follows:

1. While any private passenger type auto you own is a covered auto for physical damage coverage, a nonowned auto is also a covered auto for such coverage.
2. Our maximum limit of liability for loss to a nonowned trailer under the preceding Paragraph 1 is $500.

B.  Glossary

As used in this coverage extension, nonowned auto means any private passenger type auto, pickup or van type truck, or trailer, that is not owned by, or available or furnished for the regular use of, you or a family member while such vehicle is being operated by, or in the custody of, you or a family member.

Analysis:

This supplemental coverage requires an amendment to the Glossary section of the policy to describe a nonowned auto. A nonowned auto is one not owned by, available to, or furnished for, the regular use of an [individual named] insured or family member of a specific auto type to include a private passenger auto, pickup truck, van, or trailer. Coverage will only apply while the vehicle is being operated by or is in the custody of the [individual named] insured or family member. 

The coverage provided is for physical damage to the nonowned auto, but only if physical damage coverage is provided for covered autos. The coverage as it applies to trailers is limited to $500.

This is basically physical damage coverage that will extend to a private passenger auto or trailer  that is rented, hired, borrowed, or loaned to an individual named insured, as long as that type of auto is otherwise covered for physical damage under the policy. For example, if an insured rents a trailer to haul a piece of equipment to a customer this will cover the trailer if damaged in an accident while making the delivery, up to a maximum of $500.

4. TRANSPORTATION EXPENSE COVERAGE – ADDITIONAL INSURANCE

1. We will pay necessary reasonable transportation expenses that you incur because of the total theft of a covered private passenger type auto that is insured for Comprehensive Coverage under this policy.
2. Our maximum liability per occurrence under this Supplemental Coverage is $600 subject to a maximum $20 per day limit. We pay only for such expenses incurred during the period that begins 48 hours following the theft and ends when the covered auto is either returned to use or we pay for its loss. The described period is not limited by expiration of the policy term.

Analysis:

Again, this supplementary coverage is only available if the policy covers private passenger type autos for Comprehensive Coverage. If so, if the insured's covered private passenger auto is stolen and as a result of the theft the insured has to obtain other transportation, then this will provide the insured with up to $20 each day for such expenses, beginning after a waiting period of 48 hours following the theft. The limit applies for each theft occurrence at a maximum of $600. The coverage will end when the insured's auto is returned to use, or the carrier pays for its loss, whichever comes first, and this time period will not be cut short by the policy's expiration. 

5. HIRED AUTO LOSS OF USE COVERAGE – ADDITIONAL INSURANCE

If Physical Damage Coverage is provided for hired autos by this policy:

1. We will pay necessary reasonable expenses for which an insured becomes legally liable to pay for the loss of use of an auto borrowed, hired, leased or rented without a driver under a written contract or agreement. Such loss of use must result from damage caused by a cause of loss not otherwise excluded or limited in this policy.
2. Our maximum liability per occurrence under this Supplemental Coverage is $600 subject to a maximum $20 per day limit. The described period is not limited by expiration of the policy term.

Analysis:

Again, this supplemental coverage will only apply if the insured adds coverage for hired autos.  The supplemental coverage will then provide coverage for loss of use when required under a contract or agreement, such as a rental car agreement. Any auto that the named insured leases, hires, rents or borrows is deemed in this instance to be a covered auto owned by the named insured and so, has primary coverage for physical damage. For example, if  the named insured rents a car while on his business trip and has an accident, this coverage will cover the rental company's loss of use of their car. The same limits apply as with the transportation expense additional insurance, $20 per day/$600 maximum per occurrence.