fin 3440 auto insurance

fin 3440 auto insurance - PERSONAL AUTO INSURANCE POLICY...

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PERSONAL AUTO INSURANCE POLICY Overview An automobile insurance policy, or personal auto policy (PAP) as it is commonly referred to today, consists of several types of insurance. Some are mandatory and some are optional, depending on state law. You can tailor the amount of coverage and the cost for each type of insurance, to fit your particular situation. The PAP is actually one of the more complex insurance contracts because it provides coverage against different types of losses and circumstances. The types of losses covered include legal liability, injury to the insured or members of his/her family, and damage to or loss of the automobile. The PAP is also designed for varied circumstances : to provide protection for the owner when someone else is operating his/her auto, or when the insured is driving someone else’s car. Chapter 22 (p. 113-140) and Appendix B (p. 188-201) of your text should be read together, because Chapter 22 is essentially a “tour guide” of the personal auto policy in Appendix B . As your author notes at the beginning of Chapter 22, the auto policy in Appendix B is issued by the Insurance Services Office (ISO) , an organization owned by the insurance industry to pool data, to publish standardized insurance contracts, and to perform other services for the industry. Recall from our prior lecture why functions such as pooling of industry data and the issue of standardized contracts are needed: to better analyze and forecast losses and to better price insurance products to reduce the chances of insurer insolvency. Chapter 22 and Appendix B are likely to have as much, or more, practical importance to you as any other two chapters that you have read in your studies at LSU. Why? Because most of you probably own or drive a car and because most people, not just students but parents also, do not read their insurance contracts and know important details contained within them. Chapter 22 does a nice job of explaining the auto policy contract provisions in Appendix B in sequence, and provides numerous examples of what some of the more ambiguous provisions really mean. Discussed below are your lecture notes for Chapter 22/Appendix . For the sake of brevity, text quotations below for the auto policy are from Chapter 22 , not Appendix B , therefore if you want to read the specific language of the sample ISO auto policy, refer to Appendix B . However, for all insurance policies that we will discuss this semester, always read your actual auto, home, or other insurance policy, because slight variations in policy terms may exist for different insurers and for different states in which you may ultimately reside. PART A: LIABILITY COVERAGE “Liability coverage (Part A) is the most important part of the PAP. It protects a covered person against a suit or claim arising out of the ownership or operation of a covered vehicle.” (Chapter 22, p. 115). Who is covered under the policy
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fin 3440 auto insurance - PERSONAL AUTO INSURANCE POLICY...

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