Discusión de los resultados

Some states have enacted some form of "no fault" liability laws. New York and Florida are examples. The purpose is to reduce the number of lawsuits and pay the insureds for their loss in a timely fashion. Personal injury protection covers losses due to bodily injury. It pays for medical and funeral expenses as well as loss of income. The insureds collect from their own insurance company Legal liability does not have to be established.

Most no-fault laws have a threshold when once exceeded, the insured can sue the negligent party. Serious injury such as disability, loss of a limb, etc. can also allow the injured party to sue the negligent driver.

Loss of income has its limits that vary by state with some allowing the insured to purchase additional coverage. Most pay 80% but subject to a maximum limit per month.

Section IV Review

Review of Actual Claim: The insureds furnish an auto for the regular use of their son. One

evening, their son used the auto to go cruising with some friends and allowed a friend to drive the vehicle. The friend, an unlicensed 15-year-old girl, wrecked the automobile and

subsequently injured the insured's son.

1. Does the liability policy of the girl's parents come in as excess over the medical payments policy of the insureds?

2. Does the policy of the girl's parents cover any expenses since the girl was an under aged, unlicensed driver?

Review Questions

1. The insuring agreement under the Policy Part B -Medical Payments Coverage, does not include coverage for:

A. Pain and suffering B. Medical expenses C. Funeral expenses D. All of the above

2. Under the Policy Part B - Medical Payments Coverage, the "insured" means: A. You or any family member while occupying a vehicle

B. You or any family member, while walking as a pedestrian, struck by a motor vehicle designed for use mainly on public roads or a trailer of any type.

C. Any other person while "occupying" your covered auto. D. All of the above

3. The limits of liability for medical payments:

A. Apply "per person" no matter how many people are injured in the same accident B. Apply to a limited number of accidents during the policy period

C. Include a clause in the policy allowing duplicate payments under other coverage parts.

4. Some states have enacted some form of "no fault" liability laws. The purpose of these laws is:

A. To allow the injured party to be awarded a larger settlement

B. To reduce the number of lawsuits and pay the insureds for their loss in a timely fashion.

C. To stop the injured party from suing the negligent party, regardless of the seriousness of the injury.

D. All of the above 5. Loss of income coverage:

A. Has no limit B. Has a limit of 50%

C. Has a limit fixed by federal law D. Has limits that vary by state

Answers to Claim Review

1. The liability coverage under the friend's parent's policy is not excess over the insured's medical payments coverage. Both the medical payments and liability coverages are primary coverages for the insureds that the policy covers. The medical payments insurer is entitled to recover its payment to its insured from the liability proceeds that are recovered from the other insurer.

2. Because the insuring agreement of the personal auto policy pledges to pay damages arising from bodily injury or property damage for which any insured becomes liable because of an auto accident, there is coverage under the friend's parent's PAP.

Answers to Review Questions

1. A 2. D 3. A 4. B 5. D

V. Uninsured Motorist Coverage

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Part C - Uninsured Motorists Coverage

This coverage has existed since the 1960s and was designed primarily to cover injuries to the insured and family members when struck by a driver that did not have insurance. Many states estimated that as many as 30% or higher of its drivers were without auto insurance and this caused a substantial unfair financial burden on its citizens when injured in an auto accident with an uninsured driver. Many states have now made this coverage mandatory with stated statutory limits of coverage. Some states still allow the insured to reject this coverage in writing, but, it must be a least offered to the insured. Due to claim activity, because the problem of uninsured drivers still exists, premiums have been constantly increased.

When an insured or family member is injured in an accident caused by an at fault uninsured driver, the insured must collect from his own insurance carrier as if it were a liability claim. Sometimes the insured ends up in arbitration or a lawsuit against his insurance company.

Insuring Agreement

The insuring agreement states that the company will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "uninsured motor vehicle" involved in an accident and causing "bodily injury". Any judgment for damages will not be binding on the insurance company without their consent. So if an insured settles with the uninsured motorist, without the consent of the company, then coverage is voided. It is not clear as to the purpose of this provision since it is often the court and not the company that determines the award the insured, family members or other persons occupying the insured's vehicle at the time of the accident will receive. The coverage applies to the insured, family members and any other person occupying the covered auto.

Part C of the form also describes what is considered to be an "uninsured motor vehicle" as follows:

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 bond or policy applies at the time of the accident. In this case its limit for bodily injury 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 not 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 insurance company:

a. Denies coverage; or b. Is or becomes insolvent.

First, we observe that the first clause indicates that all land motor vehicles and trailers are covered. It does not have to be just another private passenger type vehicle. Secondly the coverage will apply should the at-fault operator carry less than the state required limit of coverage according to their financial responsibility law. The one that causes the most problems is where there is a hit-and-run operator who can't be identified. Some states have modified this to include a provision where a "hit" does not have to occur. In this situation the insured must prove that he was run off the road or forced into a line of traffic, for example, by a "phantom" driver and that no contact was made with the insured's vehicle and as a result the insured was injured. Coverage also applies to the insured and family members even if they are pedestrians. Part C also describes six vehicles that are excluded from coverage:

1. Vehicles owned by or furnished to the named insured or family members. Vehicles owned by the insured and not insured are not covered. We have already discussed the furnished or made available for regular use provision as not applying to medical

payments and the same is true of uninsured motorists coverage. Nor can the named insured collect if injured in an uninsured vehicle owned by a family member.

2. Owned or operated by a self-insurer, except for an insolvent self-insurer as defined by the state. If a self-insurer becomes insolvent and has no assets to honor a claim, the insured's policy would provide uninsured motorists coverage.

3. Owned by a government unit or agency. (This is self-explanatory)

4. Operated on rails or crawler treads. (Railroads and heavy earth movement type equipment would not be covered)

5. Designed mainly for use off public roads. Therefore, all terrain type recreational vehicles are not covered. All terrain vehicles does not mean SUVs such as Jeeps, Ford Broncos, etc.

6. Located for use as a residence or premises. This type of vehicle does not meet the definition of uninsured vehicle. Thus if the insured is camping and is injured in another camper's trailer, coverage would not apply because the vehicle is being used as a residence.