Terms
Method of Valuation that recognizes the reduction of value of property as it ages and becomes subject to wear and tear
Actual Cash Value
Part A
Liability
Vehicle titled to the insured
Owned
What does liability cover?
Pays for bodily injury, defense costs, and costs resulting from a settlement or defense of insured
What is the primary liability policy called?
Underlying liability
Proof that one can pay for damages caused, often fulfilled by purchasing insurance
Financial Responsibility
Part B
Medical Payments
Private vehicles operated by the insured, but not titled to them
Nonowned
Term that means the maximum amount the policy will pay
Limits of liability
Coverage that can be greater or less than the underlying coverage
Umbrella (Stand-alone)
The term that means the date that an insurance policy goes into effect
Inception
Part C
Uninsured Motorist
Auto that is leased, rented, or borrowed
Hired
Broken into bodily injury for each person involved, the entire accident, and property damage
Split Limits
Form that mirrors the underlying policy and increases the limits of liability
Excess (follow form)
A written law passed by a legislative body
Statute
Part D
Property Damage to your auto
Auto not owned by the insured used while the insured vehicle is out of service
Temporary Substitute
One dollar amount indicating the maximum coverage for all losses
Combined single limit
Also referred to as catastrophe insurance
Personal Umbrella
Term that means unable to meet financial obligations
Insolvent
Part E
Duties after and accident or loss
What is the difference between a hired auto and a non-owned auto?
Autos leased, hired, or borrowed from and employee or partner are considered non-owned.
Name at least 3 exclusions for auto liability
1. Intentional damage or injury
2. Use of auto without permission
3. Use of commercial-types vehicle in business
4. Damage to property being transported
Retained limits the insured much pay before umbrella policy will respond to certain losses
Self-insured retention (SIR)