State Office of Risk Management Auto Symposium 2015 Commercial Statewide Auto Program Basics

Transcription

1 State Office of Risk Management Auto Symposium 2015 Commercial Statewide Auto Program Basics

2 1. Business Auto Conditions 2. Business Auto Coverages 3. Business Auto Coverage Expansions 4. Endorsements 2

3 1. Who is an insured 2. Coverage Territory 3. Other Insurance 4. Premium Audit 5. Lose Conditions and Duties in the Event of a Loss 3

4 A. Who Is An Insured 1. You for any covered auto LIABILITY COVERAGE - SECTION II 2. Others with named insured's permission for covered "auto" that the named insured owns, hires, or borrows EXCEPT: a. Owner of covered "auto" you hire or borrow except a "trailer attached to covered "auto" you own b. Named insured's employee if covered "auto" owned by him/her or his/her household c. In auto business, except the named insured's d. Anyone, other than the named insured's employee, partners (if "you" are a partnership), members (if "you" are a LLC), lessee, or borrower, while loading and unloading e. Partners (if partnership) or a member (if LLC) for individually owned "autos" or his/her household Several ways to address this the key is catching the partners before they title their new car 3. Others with vicarious liability for the conduct of an "insured a. Extends insured status to ANYONE who may be held liable for the conduct of an "insured" such as: 1) A general contractor for whom the insured is working 2) A charitable organization for whom the insured is doing work 4

5 WHO IS AN INSURED? NAMED INSURED FOR A COVERED AUTO PERMISSIVE USER OF A COVERED AUTO VICARIOUS RESPONSIBILITY EXCEPT THE OWNER OR ANYONE ELSE FROM WHOM YOU HIRE OR BORROW A COVERED "AUTO" ** EMPLOYEE IF THE COVERED AUTO IS OWNED BY THE EMPLOYEE OR A MEMBER OF THEIR HOUSEHOLD ** ANYONE USING A COVERED AUTO WHILE WORKING IN THE AUTO BUSINESS UNLESS THAT IS YOUR BUSINESS LOADING AND UNLOADING (Under certain circumstances) PARTNER/MEMBER IF THE COVERED AUTO IS OWNED BY THE PARTNER/MEMBER OR A MEMBER OF THEIR HOUSEHOLD ** ** This coverage may be purchased by endorsement. 5

6 B. Policy period, coverage territory 1. Policy period - shown on declarations 2. Coverage territory a. USA, its territories and possessions, Puerto Rico and Canada b. Anywhere in the world if Non-owned PPA for 30 days or less (Rental must be without a driver) AND c. Suit is brought in territory shown in (a.) above 3. Mexico endorsements serve a limited purpose Two or more coverage forms or policies issued by us 6

7 C. Other insurance 1. Primary I excess a. Covered owned "auto" primary b. Covered non-owned "auto" excess c. Covered trailer 1) Excess connected to non-owned 2) Primary connected to owned covered "auto 2. Primary for hired auto physical damage 3. Primary for "insured contract 4. Pro rata when other insurance applies on same basis D. Premium audit 1. Policy is Composite rated 2. Audit Process 7

8 E. Loss Conditions 1. Appraisal for physical damage loss 2. Duties in the event of accident, claim, suit, or loss a. Prompt notice b. Assume no obligation, make no payment, and send copies of demands, summons or legal papers. Cooperate with the insurer. Grant medical authorization and submit to medical examination c. Notify police in event of theft, protect damaged property, permit the insurer to inspect before repair or disposition, give statement under oath 8

9 2. Business Auto Coverages A. Liability Coverage 1. Owned autos exposures 2. Non-owned autos exposures Example: employees driving their own autos 3. Hired or Borrowed auto exposures Examples: rental cars, limos, etc. B. Physical Damage Coverage Options to protect against exposures such as: 1. Collision 2. Weather related, floods & quakes 3. Theft, vandalism 4. Miscellaneous other types of exposures that could damage an auto 9

10 A. Insuring Agreement 1. Promise to pay legal obligations of the "insured" for "Bodily Injury and "Property Damage" Definition of "Bodily Injury" and "Property Damage 2. Promise to pay legal obligations of the "insured" for "Covered Pollution Cost or Expense a. Pollution liability is excluded; however there are a few exceptions for which "Covered Pollution Cost or Expense applies. b. Exclusions and exceptions 3. Right and duty to defend against a "suit a. No duty to defend if coverage does not apply b. Insurer may settle any claim or suit c. Duty to defend ends when limits have been exhausted by payments or judgments or settlements 10

11 B. Coverage 1. "Loss" to covered "auto" or its equipment a. Comprehensive b. Specified causes of loss c. Collision 2. Glass Breakage, Hitting a Bird or Animal, Falling Objects or Missiles a. Paid under comprehensive if carried b. Glass breakage can be covered under collision - insured's option Typically filed as Comprehensive if the deductible is lower! 11

12 C. Exclusions-partial 1. Direct I indirect I concurrent a. Nuclear hazard b. War 2. Racing 3. Wear and tear, freezing, mechanical, or electrical breakdown or road damage to tires 4. Electronic equipment and media a. Tapes, records, discs or similar audio, visual or data electronic devices b. Radar detectors c. Electronic equipment that reproduces, receives or transmits audio, visual or data signal d. Any accessories used with the electronic equipment described in c. above e. The exclusion of c. and d. do not apply to equipment designed to be operated solely by use of the power form the auto s electrical system that is: 1) Permanently installed in or upon the covered auto; 2) Removable from a housing that is permanently installed in or upon the covered auto; 3) Integral part of the same housing unit; 4) Necessary for normal operation of the covered auto 12

13 5. Diminution in Value D. Limits of Insurance Pays the lessor of 1. Pays the lesser of a. ACV at time of loss or b. Cost to repair or replace with like kind and quality No obligation to use manufactures original parts 2. $1,000 limit for audio, visual, data electronic equipment that is a. permanently installed in housing, opening for location not normally used by the manufacturer for such equipment b. removable from permanently installed housing not normally used by manufacture, or c. Use CA Audio, Visual and Data Electronic Equipment Coverage Added Limits if needed to increase the sublimit 3. Adjustment for depreciation and no payment for betterment E. Deductible 1. Per covered auto 2. Comprehensive deductible does not apply to loss caused by fire or lightning 13

14 F. Newly Acquired 1. If Symbols 1, 2, 3, 4, 5, 6 or 19 are used In Item Two of the declarations to trigger coverage Newly acquired autos of the same described type will AUTOMATICALLY have that coverage FOR THE REMAINDER OF THE POLICY PERIOD 2. BUT, if Symbol 7 is used in Item Two of the declarations to trigger Coverage a. An additional unit will be covered ONLY if that insurance company covers all owned autos for that specific coverage OR A replacement auto will be covered only with the same coverage as the unit it replaces b. AND, must notify company within 30 days of acquisition for additional or replacement If symbol 7 is used, you MUST tell the company within 30 days of purchase that you want them to insure the newly acquired auto for that coverage otherwise there is NO coverage. 3. Symbol 10 Can be used for items that would fall into an other category. (scheduled trailers, autos with a different type of coverage, etc) 14

15 G. Certain Trailers, Mobile Equipment, And Temporary Substitute Autos Liability Only 1. Trailers - 2,000 lbs. load capacity 2. "Mobile equipment" - carried or towed by a covered "auto" a) Dovetails with the GL exclusion Example: Front-end Loader rolls off the back of a trailer towed by an owned power unit - severely crunches the vehicle behind it. 3. Temporary substitute Must be substituted for one of the following reasons: a) Breakdown b) Repair or Servicing c) Loss d) Destruction May be any type of vehicle, even if it is substituting for a PP type. 15

16 Business Automobile Coverage Extensions 16

17 A. Coverage Extensions 1. Transportation Expenses - a. $20 per day I $600 maximum b. Arising from total theft of covered private-passenger-type "auto 2. Loss of Use Expenses - Hired Auto Physical Damage a. Insured must be legally responsible under a written rental contract b. $20 per day I $600 maximum for loss of use of a rental car Reminder: Must have symbol 8 Hired Auto indicated under Physical Damage section of Item Two 17

18 B. Additional Coverage Extensions 1. Supplementary payments - in addition to limit of insurance a. All expenses the insurer incurs b. Up to $2000 for cost of bail bonds due to covered accident c. Cost of bonds to release attachments d. Reasonable expenses incurred by an "insured" at insurer's request, including up to $250 per day for loss of earnings e. Court costs taxed against "insured" in any "suit" the insurer defends Does not include attorneys' fees or attorneys expenses f. Post-judgment interest Unlike GL, which covers Pre and Post judgment interest 2. Out-of-state coverage extensions a. Increase liability limits Typically comes into play when there are different PIP laws, or financial responsibility minimums b. Provide minimum amounts and types of other coverage required by law 18

19 ENDORSEMENTS AM84 17 Abuse or Molestation Exclusion Endorsement AM08 14 Attorney General Endorsement CA 2002 Audio, Visual and Data Electronic Equipment Coverage, Fire Policy and Emergency Vehicles CNA09 04 Audit Basis Beginning/Ending Inventory CA 2048 Designated Insured for Covered Autos Liability Coverage CA Employee As Lessor CA Employee As Insureds CA Employee Hired Autos CA 0445 Golf Carts and Low Speed Vehicle CA Hired Auto Specified As Covered Auto You Own CA Lessor - Additional Insured and Loss Payee CA Limited Mexico Coverage CA 2015 Mobile Equipment AC Notice of Accident Endorsement AM09 14 Texas Tort Claims Act Special limits CA Waiver of Rights of Recovery Against Others to Us 19

20 Mexico Auto Coverage Provided in Policy (Form CA 01 21) The coverage territory is extended to include Mexico but only for: a)"accidents" or "losses" occurring within 25 miles of the United States border; and b) Trips into Mexico of 10 days or less Physical Damage Coverage is amended to include repairs to covered autos made in Mexico that are necessary in order for the vehicle to be driving Excess Coverage over other applicable policies

21 Why Separate Coverage for Mexico is Necessary US and Canadian auto insurance is not valid in Mexico. US and Canadian auto insurance is not recognized by Mexican authorities. If you do not have Mexican liability insurance, you may be prevented from departing the country even if you require lifesaving medical care, and you are almost certain to spend some time in jail. Your US or Canadian insurance does not cover theft or physical damage to your vehicle while in Mexico.

22 Statewide Coverage Program Summary Available by Purchase

23 How to Purchase Mexico Auto Coverage Go to the following hyperlink: spx Complete all fields on the form and click the Submit button (if you have any questions about these fields please call The Jenkins Agency at ). A submission message will pop up and within 30 minutes, and the employee traveling to Mexico will receive a phone call from the Jenkins Agency. The employee will need to provide the following information: Date of birth Driver s license number License plate of the vehicle they are driving Whether it is a state-owned or personal owned vehicle

24 Need to Know If You Have an Accident in Mexico If you have a claim in Mexico, be sure to REPORT it IN MEXICO. Call the toll free number provided in the policy documents. One of the biggest mistakes people make is thinking they can report a claim once they get home. The problem with this is how to verify that the claim actually occurred in Mexico? When you call the toll free number, an adjuster will be dispatched to the scene of the accident; they will complete a report and let you know what's next. Be sure to get a copy of the adjuster's report. It will help with the follow up process. So PLEASE report the claim in Mexico. If you choose to have your vehicle repaired in Mexico, the insurance company can provide the name of a shop that the insurance company is familiar with.

25 CONTACT INFORMATION Dale Sharpe Jenkins, M.S. CIC The Jenkins Agency, Inc Corporate Dr., West, Suite 306 Arlington, TX (817) office (817) fax