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From the Editor
"Ask an Expert" Briefs
Auto Insurance is NOT a Commodity…Really
A homeowners insured has his auto coverage with a captive agent. His resident daughter has her coverage with a direct sales insurer. He backs into her car and his auto insurer denies the claim because their policy doesn’t cover damage to a resident family member’s car. If he was insured on an ISO PAP, would there be coverage?
Drivers vs. Insureds
We find that often there is a misconception that listing someone as a driver on an auto policy automatically makes them an insured or that someone is not an insured because they are not listed as a driver. The reality is that the policy language is what governs and listing as a driver is more often an underwriting and rating tool. But there are exceptions…caveat emptor!
Insurance and Joint Custody of Kids
The divorce of insureds can often create problems for CSRs handling the transition of their personal lines account. However, even when a divorce is amicable, agents may be expected to provide legal advice in addition to insurance advice. This article discusses that caveat and identifies insurance issues that need to be considered, including handling joint custody of kids.
Kid’s Car Jointly Titled with Parents
Your insured’s daughter had a car at college jointly titled to her and mom. Daughter has graduated and moved to another state with the auto which remains insured on mom’s PAP and PUP. In addition, daughter’s boyfriend who hasn’t yet found a job has moved in with her and sometimes drives the car. How do you handle this new insurance exposure?
Kids Kars…An E&O Time Bomb: Can Your Staff Handle These Types of Scenarios?
Divorced parents have joint custody of their teenage son. Dad buys a car for the kid and insures it on his own policy. The agency insures mom and dad on separate PAPs with the same carrier and the CSR making the change is concerned about the rating on mom’s policy. The reality is that the CSR should be aware that mom has a potentially catastrophic coverage exposure but she’s not. Does your staff have the coverage chops to recognize these types of coverage scenarios?
The Insurance Implications of the U.S. Supreme Court Same-Sex Marriage Ruling – Personal Lines Edition
On June 26, 2015 in Obergefell v. Hodges, the U.S. Supreme Court in a 5-4 decision ruled in favor of same-sex marriage. So what does this mean for you and your customers? Specifically, what are the P&C coverage implications? This article primarily examines some personal lines issues and the companion article does the same for commercial lines issues.
Variations on a Theme: Another Look at the Teen Driver Coverage Gap
Have you ever had an attorney or other “expert” advise one of your customers with a teen driver to place that teen on his or her own policy (usually at minimum limits)? If so, are you prepared to explain to the child’s parents why THEY might have no coverage on THEIR policy if sued?
Auto Policies and Permissive Users
Most auto policies — personal and commercial — exclude the use of autos without permission. Commonly referred to as 'car thief' exclusions, they may exclude far more (or less) than that. Just what constitutes 'permission,' from whose perspective (owner or user), and must it be explicit or not? In this article, we'll explore the policy liability language and case law.
Some families have, let's say, 'less than desirable' drivers in the household. As a result, it may be difficult to procure auto insurance or at least obtain it at a reasonable price. Therefore, some insurers use driver exclusions, usually in the form of endorsements. Are these exclusions enforceable? In some cases, yes; in other cases, they are enforceable only beyond certain minimum limits. This article examines this issue, citing several court cases.
Family Member Autos...A Hidden E&O Exposure
One of the most often overlooked (and potentially catastrophic) coverage gaps in the Personal Auto Policy involves autos owned and separately insured by resident family members. This exposure most likely exists in MANY of your personal lines accounts. Here's the problem and what to do about it.
Insurance vs. Legal Advice
Quite often, the VU 'Ask an Expert' service gets a question about the insurance ramifications of something an insured was advised to do by an attorney, CPA, estate planner, or other non-insurance professional. What we have found is that such economic advice can frequently create a potentially catastrophic coverage gap that is penny wise but pound foolish.
Kids' Cars and Divorce
Mom and Dad are divorced. Daughter lives with Mom. Dad has offered to let his daughter drive one of his cars. He's fine with Mom driving it when needed. He does not want to add Daughter to his policy. What are the insurance implications under both Mom's and Dad's policies for this arrangement?
Kids' Cars and Divorce...Oops They've Done It Again
Even when a troubled marriage ends, some problems continue, especially when insurance and kids are involved. Few situations in personal lines pose more complex coverage issues than divorce, especially where there are driving-age kids lurking about. This article is about a situation that could lead to a coverage nightmare.
Kids' Kars Revisited
In another article, we discuss the potential coverage gaps if a resident child buys a car and it is insured under a separate policy, as opposed to the parent's policy. Recently this issue came up again in one of our 'Ask an Expert' questions. In this follow-up, we'd like to stress again how important it is to consider issues like this when evaluating insurance coverages for both adults and 'children.'
Kids' Kars...Are They Ready for Their Own Policy? Are YOU Ready?
When a resident child buys a car, should it be insured under the parents' policy or under a separate policy? Too often, this decision is made on a purely financial basis, without much thought about the possible coverage ramifications to all parties involved.
Leasing a Company Car to Yourself
Your insured owns a company that has no auto coverage. For tax (or other) reasons, the company buys a car then leases it to the owner, your insured. He wants to cover the car on his PAP and include his business as an additional insured, thus saving on his company having to buy a BAP. Is this penny wise or pound foolish?
More Parental Liability and Kids Kars Questions
While we have written extensively on this subject, questions continue to pour into our 'Ask an Expert' service. Invariably they deal with recommendations to insureds that they place their children on separate policies, often at minimum limits. In this follow-up article, we'll answer three questions involving named insureds and resident relatives, including links to previous articles on this subject.
PAP Annotated Part A - Liability Coverage: Insuring Agreement - Insureds
Liability coverage under a Personal Auto Policy is extremely broad with regard to vehicles, use and persons insured. For example, a person may have coverage for an accident in which they were not even involved, as well as the personal use of otherwise ineligible vehicles. In this section, we'll look at the Part A Insuring Agreement - Insureds.
PAP Coverage: Parents' PAP and Military Personnel
The 18 year old resident son of our insureds enlisted in the Army, went to boot camp for 14 weeks, and took 3 days leave. While riding in a pickup bed that overturned due to the driver's negligence, he was killed. A UIM claim has been filed, but the adjuster says he is no longer a resident relative. Is that right?
Parental Liability & The PAP
Your insured was told by his attorney to title and insure a car in his 16-year-old son's name to minimize the family's liability exposure. According to the attorney, if his son kills somebody, they can't touch the parents' assets. (Editor Question: Why can't we practice law without a license, but an attorney can provide risk management advice without an insurance license?)
The PAP and College Students
Your 20-year-old daughter is away at college. She does not have a car on campus, but her roommate does and she drives the auto occasionally. Would your unendorsed personal auto policy respond if she has an accident driving the car? If not, is there anything you can do about it? You might be surprised...
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