The ISO Personal Auto Policy was revised in 2018 from the 2005 form. As the policy is long we have broken the discussion is separate sections, which you can link to below:

Personal Auto Policy – Definitions

Personal Auto Policy – Part A Liability

Personal Auto Policy – Part B Medical Payments

Personal Auto Policy – Part C Uninsured Motorists Coverage

Personal Auto Policy – Part D Coverage for Damage to Your Auto

Personal Auto Policy – Part E and F Duties After a Loss and General Provisions

Topics covered

Insured's Duties After An Accident Or Loss

General Provisions

Insured's Duties After An Accident Or Loss

PART E – DUTIES AFTER AN ACCIDENT OR LOSS

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.

Analysis

The insured's duties after an accident or loss are intended to be conditions precedent for providing coverage under the personal auto policy. In other words, the intent of the Personal Auto has always been to require, after a loss, compliance with the duties section prior to implementing the insuring agreements.

The first duty after an accident or loss is that of promptly notifying the company of the particulars of the accident: "how, when and where" the accident occurred and the names and addresses of any persons injured in the accident or those who witnessed it. This information is valuable in the claims investigation. The insurer needs to know who was injured in event claims are filed by parties later, and witnesses can provide valuable information as to who was at fault for the loss. If a police report has been made a lot of this information will be contained in it. The insurance company should be notified at the time the loss is reported if one exists as it will help to expedite the claims investigation and process.

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. c. To recorded statements.

4. Authorize us to obtain:

a. Medical reports; and b. Other pertinent records.

5. Submit a proof of loss when required by us.

Analysis

The insurance company is entitled to whatever legal defense might be available to the insured if insurance was not involved. If the insured with a claim that is being made against them can prove that the claimant's negligence contributed significantly to the accident, that would very obviously be important to the defense of the claim. If the insured refuses to cooperate in that defense position, then that refusal may provide grounds for the insurance company's withdrawal from the claim. The insured's cooperation is essential to defend any lawsuit that has been filed against the personal auto policy.

The insured may be required to submit to any physical exams required by the insurer using physicians selected by them in order to substantiate any injury claims. In addition, an insured may be required to submit to an examination under oath and provide recorded statements regarding the facts of the accident to the insurance company. This is all part of the cooperation requirements under the personal auto policy. It is common for insurers to take recorded statements to have a record of the insured's recollection of events.

A third party claimant has no obligation to submit to any kind of examination although one might undergo one voluntarily in a negotiated settlement. This provision has to do with medical payments, uninsured motorists, underinsured motorists features of the personal auto policy under which a named insured or other insured person is entitled to go to the insurance company directly for expenses incurred under a bodily injury claim from an automobile accident.

In addition the insurer may require the insured to sign a medical records release form to obtain all pertinent medical records. These will be used to substantiate the injuries from the accident and to sort out any pre-existing injuries that may affect the settlement of the bodily injury portions of the claim. All medical information received will be required to be protected and obtained under all HIPAA and other privacy regulations and laws by the insurer.

A Sworn Proof of Loss is a document containing more specific information about values of lost property and details of the occurrence is also part of the claims process. In sum these provisions assist the insurer in determining the validity of the claim.

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.

Analysis

Due to the definition of "uninsured motor vehicle," a covered person could, in bad faith, recover uninsured motorists benefits by blaming a one-car accident on a nonexistent hit-and-run vehicle. The covered person's duty to promptly report a hit-and-run accident to the police subjects such accidents to police investigation and thereby increases the likelihood of detecting fraudulent claims. If a claim stems from a legitimate hit-and-run accident, the timely notification of the police is equally beneficial to the insurance company, as it increases the likelihood that the wrongdoer will be apprehended. When a wrongdoer is apprehended and if proven to be financially responsible, then the insurer will likely be released from its obligations to compensate the insured under the personal auto policy. However, in the event that the wrongdoer is uninsured and unable to compensate the insurer for the claim, then the insurer will still pay under the uninsured motorist coverage. If the uninsured motorist benefits have already been paid by the insurer, then subrogation proceedings will commence against the wrongdoer's insurer and the negligent driver.

If a suit is brought, the insurer must be advised immediately. Whether it is the insured filing suit against the uninsured driver or another party in the insured's vehicle filing suit against the insured, the insurer needs to know of any legal action so it can respond appropriately.

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 its 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

These are the additional duties required of claimants for physical damage coverage. As an example of protecting a covered auto from further loss, the named insured damages the radiator by colliding with an animal. The insured should not continue to drive the car and thereby take the chance of overheating the engine and doing further damage to the car. The cost of having the car towed to a service station would be paid by the insurer in order to prevent further loss.

Prompt notice to police of the theft of a car increases the chances of recovering the stolen car.

Permitting the insurer to inspect and appraise the damaged property enables the insurer to decide upon the actual cash value of the loss.The insurer needs to see the damage in order to estimate the cost to repair the vehicle, or to determine if the vehicle is a total loss. Many insurers now allow insureds to send in photos of the damage, or work directly with repair shops that send photos and estimates directly to the insurer without an adjuster having to physically see the damage. Regardless of exactly how the insurer is made aware of the extent of the damages to the vehicle, this step must be taken before any repairs are made.

Part F – General Provisions

Bankruptcy

Bankruptcy or insolvency of the "insured" shall not relieve us of any obligations under this Policy

Analysis

The insurer is obligated to fulfill its policy obligations in the event the insured becomes bankrupt or insolvent. The insured's financial condition, as long as the premium has been paid and the policy is in force, does not change the insurer's obligations to fulfill the contract and provide coverage for what the insured has paid for.

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; or 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.

Analysis

The terms of the policy may be changed or waived only by endorsement issued by the insurance company. An endorsement is how coverage can be changed after a policy has been issued. Either the insured or the insurer can make changes to a policy by way of endorsement. When the insured makes a request, the insurer must approve it before the changes will be effective.

If a change requires a premium adjustment, such as a change in the number or type of insured vehicles, or a change in operators using the insured vehicles, or even a change in coverages and deductibles, the company will make the premium adjustment in accordance with its manual rules.

For example: Lisa decides to trade in her old 2016 Honda Civic for a 2022 Lexus RX. In addition she adds her 16 year old son to the policy to drive the already listed 2020 Honda Accord. Both of these changes to the policy will require adjustments to the policy premium along with any necessary changes to the coverage limits or deductibles.

If the insurance company revises the policy form to provide more coverage without additional premium charge, the policy automatically provides the additional coverage as of the day the revision is effective in the named insured's state (this is referred to as liberalization of the policy). This latter provision does not apply, however, to changes implemented with a general program revision whether through the introduction of a subsequent edition of the policy or through 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.

Analysis

This statement only makes explicit what, for reasons of public policy, is implicit in any contract of insurance. Fraud costs the insurance industry billions of dollars a year; insurers take fraud very seriously, and prosecute fraudsters.

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".

Analysis

No legal action may be brought against the insurance company until the claimant has fully complied with all the terms of the policy. With reference to a liability claim, no legal action may be brought against the insurance company until it agrees in writing that the insured has an obligation to pay or until the amount of that obligation has been finally determined by judgment after trial. No person or organization has any right under the policy to bring the insurance company into any action to determine the liability of an insured. (Some jurisdictions, however, have statutes allowing a third-party claimant to name both the insured and the insurance company in a suit. Where applicable, such statues invalidate this provision).

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.

Analysis

This is what is more commonly called the subrogation clause. Subrogation is often explained as "stepping into the shoes of another". If the insurance company makes a payment under the policy and the person to or for whom payment was made has a right to recover damages from another, the insurance company is subrogated to that right. The insurance company has stepped into the shoes of the insured. The covered person is required to do whatever is necessary to enable the insurance company to exercise its rights and may not do anything after loss to prejudice its rights. And, if a compensated covered person recovers damages from another, the covered person must hold in trust for the insurance company the proceeds of the recovery and reimburse the company to the extent of its payment.

For example: Bobby is rear-ended by Ralph. Bobby's insurance company pays for the damage to his auto and for his injuries. The insurer will then pursue Ralph directly for reimbursement of the amount paid to Bobby.

The insurance company's right of subrogation, however, does not apply under Part D, coverage for damage to your auto, against any person using "your covered auto" with a reasonable belief that he or she is entitled to do so. Thus, if someone borrows the covered auto (with a reasonable belief of entitlement to do so) and becomes legally responsible for physical damage to that auto, the insurance company cannot take subrogation action against the borrower. The borrower is an "insured" under the terms of the policy.

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.

Analysis

Accidents and losses will only be covered under this policy if they occur during the policy period shown on the Declarations page. Losses outside the policy period will be covered by earlier or subsequent policies, or if there is no in-force policy at the time, there will be no coverage. For example: Amy's previous policy period ended on July 31st at 11:59 pm, and on August 1st she had an accident at 8 pm. The previous policy period had already terminated, and the new policy that began at 12:00 am on August 1st would be the policy that would respond to this accident.

The policy territory is confined to the United States and its possessions, Puerto Rico and Canada. Vehicles being transported between their ports are also covered. For example: If an insured vehicle is on a ferry between Alaska and Canada and is damaged by another vehicle that shifts and bumps into it, that loss would be covered.

Not discussed is Mexico – under Mexican law, auto accidents may be considered a criminal, as well as a civil offense. ISO provides a Limited Mexico Coverage endorsement PP 03 21. https://www.nuco.com/fcs/2022/10/11/pp-03-21-09-18-limited-mexico-coverage/Liability coverage must be purchased from a Mexican insurance company in order for this endorsement to apply.

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:

(a) During the policy period; or (b) Since the last anniversary of the original effective date if the policy period is other than one year; or

c. If the Policy was obtained through material misrepresentation.

Analysis

The insured may cancel a policy for any reason by returning the policy itself to the insurer or by sending advance written notice of the desired date of cancellation. Insurers are only allowed to cancel a policy for specific reasons. Each state also has statutes dictating acceptable cancellation reasons and timing. Some states have amendatory endorsements that may be more restrictive than the given statutes. If an insurer has adopted that amendatory endorsement, those provisions must be followed.

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 six months, we will have the right not to renew or continue this Policy every six months, beginning six months after its original effective date.

2. Six 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. One year or longer, we will have the right not to renew or continue this Policy at each anniversary of its original effective date.

Analysis

The nonrenewal provisions provide the notice requirements for the insurer to send the nonrenewal notice to the insured. Because auto policies have different term lengths, the provision also goes on to specify the specific time periods in which an insurer may nonrenew a policy. There are many reasons why an insurer may choose to nonrenew a policy or blocks of policies, including but not limited to internal rules on nonrenewing insureds with multiple accidents or the insurer is pulling out of a state. Again, there are state statutes regarding acceptable reasons for nonrenewal of a policy that must be adhered to.

C. Automatic Termination

If we offer to renew or continue and you or your representative does 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.

Analysis

This provision provides that if an insured or their representative does not accept the company's renewal of the policy, it will automatically terminate at the end of the policy period. An insured is under no obligation to accept a policy renewal, and may obtain coverage from a different insurer. In addition, if the insured does not pay the required premium upon renewal then the policy will terminate and the insurer will assume that the renewal offer was not accepted.

When an insured obtains other insurance on their covered auto the coverage under the policy will terminate on the date that other policy becomes effective. For example: An insured finds a policy with another company that provides the same level of coverage at a lesser rate. The old policy will terminate its coverage as of the date the insured's new policy's effective date.

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.

Analysis

This provision allows the insurer to deliver the termination notice via means other than the postal service In addition, proof of mailing of any notice shall be considered sufficient proof of notice. In other words the insurer will keep a log of the notices mailed out on a particular date along with a copy of the termination notice in their files. Again, different states have regulations as to what is acceptable proof of mailing.

If the policy is canceled a refund for any unused premium may be due to the insured. The insurer will compute the amount of the refund due under their manuals and policy terms, usually on either pro-rata or short rate basis, and then send the refund to the insured.

Lastly, when a policy is canceled the cancellation date is the last day of the policy period, and any claims incurred after that date will not be covered by the policy.

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.

Analysis

Transferring the rights and duties of the auto policy to another person is called assignment. The personal auto policy can not be assigned without the insurer's written consent. Upon the death of the insured, coverage is provided for either the spouse or legal representative of the insured's estate. The spouse is treated like a named insured, however, the legal representative is only provided coverage in so far as the representative's duties to maintain or use the vehicle for the estate.

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

When two policies provide coverage for the insured and the vehicle, the coverages are not added together. The maximum paid out under all the policies involved will not be more than the highest applicable limit under any one policy. This prevents the insured from benefiting from the loss.