?4U... Questions for You... Mass Auto. sponsored by

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1 ?4U... Questions for You... Mass Auto sponsored by

2 ?4U Massachusetts Personal Auto with Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CRIS, CPIW Vice President of Technical Affairs Massachusetts Association of Insurance Agents Regular use what s the point I have been receiving some mixed answers lately in regards to coverage between the personal and commercial auto policies in regards to when the Drive Other Car (DOC) and/or use of other autos endorsement should be used. Please let me know if the info contained in the attachment is correct or not. I am just trying to make sure that the regular use exclusions are properly covered for my insureds. 1

3 Regular use what s the point It is our understanding that: An insured that has a personal auto policy as well as regular use of a vehicle that is insured on a commercial auto policy, does not need to have regular use of other autos endorsement on the personal auto policy, Regular use what s the point Is the vehicle insured under the BAP in the SAME name as the PAP in which case My policy never sits over another vehicle that I own. Is the BAP insuring the regularly used commercial vehicle in a DIFFERENT name? One does NOT need a DOC in this case as one HAS a personal auto policy. DOC is used when one has a company car at his/her disposal and one does NOT have MAP in name or household 2

4 Regular use what s the point Is the vehicle insured under the BAP in the SAME name as the PAP in which case My policy never sits over another vehicle that I own. Exclusions Part 4 Part 6 Part 6 Regular use what s the point Is the vehicle insured under the BAP in the SAME name as the PAP in which case My policy never sits over another vehicle that I own. Exclusions Part 7 Part 9 3

5 Regular use what s the point If that the BAP and the MAP has the same named insured then the MAP will NEVER respond to that other vehicle and The there is NO way to endorse policy Each policy stands on its own Regular use what s the point One does NOT need a DOC in this case as one HAS a personal auto policy. Regardless of what name the BAP is in the individual HAS his/her OWN MAP. DOC is used when one has a company car at his/her disposal and one does NOT have MAP in name or household 4

6 Regular use what s the point The MAP of the person will NEVER NEVER NEVER apply to ANY vehicle that is regularly used by an insured under parts 4/5/6/7/8/9. Exclusions Part 4 Part 6 Part 6 Regular use what s the point The MAP of the person will NEVER NEVER NEVER apply to ANY vehicle that is regularly used by an insured under parts 4/5/6/7/8/9. Exclusions Part 7 Part 9 5

7 Regular use what s the point If the BAP has large limits and the insured has permission to use for personal and business use then it might be a non-issue. If the insured doesn t KNOW what the BAP limits are OR if the insured has a PERSONAL UMBRELLA OR if the insured has the opportunity to cause an injury to a co-worker then the Use of Other Auto endorsement should be added to the MAP to remove the exclusion for regularly used vehicle. Regular use what s the point MY opinion in MY case I only care about buying back the exclusion for Parts 4,5,6 which is NOT expensive but one has to differentiate that on the endorsement request. Removing the regular use exclusion for Parts 7 and 9 is expensive and I believe unnecessary if BAP has coll/comp 6

8 Regular use what s the point Removes regular use exclusion from Coverage Parts 4,5,6,7,8,9 If MAP has 4,5,6,7,9 then the endorsement will take all those coverages unless you specify JUST Parts 4,5,6 Regular use what s the point If family members use also should check the box so exclusion removed for them also Parts 4,5,6 has separate exclusion for regular use by HHM 7

9 Regular use what s the point Regular use what s the point 8

10 Regular use what s the point If you routinely use company car roommates car Zip car same one all the time Regular use what s the point V-ride yet another deal to save gas money because you drive another car to regularly use someone else s car 9

11 Regular use what s the point 3 page document to get you to commit to drive their vans and bring yourself and others to work Regular use what s the point Client will bump heads with regular use exclusion Hope insurance from V-rides works! 10

12 Vehicle sharing or not Flight Car Relay Rides Other social media businesses solicit your client to rent out their car. Vehicle sharing or not MAP doesn t exclude But not really eligible if we knew about it 11

13 Vehicle sharing or not Watch out for vehicle sharing endorsements being created then there WILL be an exclusion to the policy Public or livery conveyance Uber and you Uber use is EXCLUDED under the MAP It IS public or livery conveyance and doesn t NEED another exclusion Part 4 exclusion Optional Parts exclusion 5,6,7,8,9,10,11,12 12

14 Public or livery conveyance Uber and you I don t CARE HOW Uber advertises That activity is NOT allowed under the MAP whether or not there is an exclusion Public or livery conveyance Uber and you The insured has an obligation to inform the carrier when they start this activity so carrier can set up for non-renewal 13

15 Public or livery conveyance Uber and you And the insured IS obligated to inform carrier DURING the policy period Actual cash value what is it We have an insured that hit a fence at a restaurant. It is a two year old fence. Our insured was at fault. Our insured has 100K of property damage. Our insured s carrier depreciated the fence. Now this doesn t sit well with me since the owner of the restaurant had nothing to do with the damage. Is this customary? Nowhere do I see where depreciation is considered in the auto policy for property damage. My argument with the carrier was the restaurant should be put to pre loss condition. 14

16 Actual cash value what is it Since we can t get a 2 year old fence the next best thing is new. The insured feels that she has 100K of coverage that will pay for 100% of the fence repair. Also hit were a dumpster that the carrier replaced at 100% with freight to Nantucket, a cooking oil container that had to be brought to the island that wasn t cheap that they paid 100% coverage.a bicycle that they paid 100% for Actual cash value what is it Another question How does the MA auto policy pay out on property damage to others? Is it ACV or RC? We have a client whose building was driven through by a car and the carrier is trying to pay out on ACV. The commercial building owner has a $50,000 deductible so they can t collect through their auto policy. I can t get a straight answer from the carriers. 15

17 Actual cash value what is it Part 4 pays what the insured is legally responsible for: In common law one is legally entitled to collect actual cash value like kind and quality the second before the loss Actual cash value what is it Part 4 pays what the insured is legally responsible for: One also gets sales tax and loss of use if applicable 16

18 Actual cash value what is it Part 4 pays what the insured is legally responsible for: The newer the item the less the depreciation Actual cash value what is it My insured has coll/comp. They put a brand new motor in their car and then there was a total collision loss. The company is not considering the cost of that engine in the value of the vehicle. Is that right? 17

19 Actual cash value what is it The MAP pays collision and comp losses on an ACV basis Actual cash value what is it We have a standards of repair regulation in Massachusetts discussing how the value of losses should be determined: 18

20 Actual cash value what is it As of 2011 AIB suggested to the MA DOI that the following should be added to all MA auto policies M-0099s It adds the standards of repair regulation into the policy so that even the client will know! Canada cards need or what I was wondering if you could answer a question for me. There has been a discussion in our office that a client no longer needs a Canada I.D. card when traveling through Canada as I just need to know if the is actually correct as I have a client requesting one now. Could you please let me know at your earliest opportunity? Thank you and have a great day 19

21 Canada cards need or what It is my understanding that Canada cards are STILL necessary I found these two things online. I see some blog sites that say they are not and some direct writers who say they are not but I don t trust that. Canada cards need or what 20

22 Canada cards need or what Canada cards need or what If you want it I have a fillable pdf form that allows you to complete Canada Card me But one must make sure that one s carrier has in fact filled power of attorney forms with Canadian Government 21

23 My insured wants to know the law that requires them to.. What is the Massachusetts law that requires all licensed household members to be listed on an auto policy? Is there a specific # to the law or a place where I can read the actual law? MA laws requiring full disclosure on the application MGL Chapter 175: 186. Misrepresentations by insured; effect. No oral or written misrepresentation or warranty made in the negotiation of a policy of insurance by the insured or in his behalf shall be deemed material or defeat or avoid the policy or prevent its attaching unless such misrepresentation or warranty is made with actual intent to deceive, or unless the matter misrepresented or made a warranty increased the risk of loss 22

24 This law, MGL 175 c.186 states information that could increase the carrier s risk of loss has been interpreted as just involving $1.00 of premium. If you went to a Fraud class...which you should have according to the Division of Insurance then you would know this and be able to enlighten your insureds. Most certainly the failure to list a household member who has been driving less than 6 years when the named insured has been driving for over 6 years would result in a premium increase. Also, failure to list a household member who has a worse driving record than the named insured would result in a premium increase. 23

25 There is also a law regarding fraud - MGL c. 266, 111B Motor vehicle insurance policies; penalty for fraudulent claims MGL c. 266, 111B or the fraud law requires full disclosure in completing an application ASSUMING the application ASKS for the information and guess what it does!!! This law also applies to INSURANCE AGENTS who help the insured to falsify information presented to the insurance company. Prior to teaching the Fraud class I used to refer to this as creative rating now I call it DEFRAUDING the insurance company. 24

26 One last more specific law regarding Part 7 Collision and Part 8 Limited Collision MGL 90 Section 34O Compulsory Motor Vehicle Liability Insurance So regarding Collision and Comprehensive there is a definite law that allows the insurance company to DENY claims if the named insured has not fessed up regarding household members who would increase premium. I believe this is just a more specific application of the fraud laws. 25

27 Do these laws REALLY require the listing of household members? The insured might argue that these laws don t apply to listing household members or drivers on an auto application. but we should encourage them that these laws DO require full disclosure of information. And, if the application ASKS the question.then the information MUST be provided. The New Business application states: 26

28 The application asks for a household member AS WELL AS others who customarily operator your vehicle. SO even if the argument is that the household member does NOT operate the vehicle that is NOT what is asked it asks about household members period. We then discuss the usage or not.and ratability or not for each listed operator and/or household member. Each operator will receive either a D, O, P, E. D Deferred (rated CORRECTLY elsewhere per rule 28) O Occasional rate for particular operator listed P Principal rate for particular operator listed E Excluded this household member is exclude per Rule 28 with M-0106S Operator Exclusion form/endorsement 27

29 D Deferred (rated CORRECTLY elsewhere per rule 28) O Occasional rate for particular operator listed P Principal rate for particular operator listed E Excluded this household member is exclude per Rule 28 with M-0106S Operator Exclusion form/endorsement Then right after the listing of the information on the original application it states.. bad things happen to those people who fail to give us complete information 28

30 Then every year your insured receives a coverage selections page alias declarations page. The front of it gives the drivers listed with the appropriate letter after their name. The Back of the Coverage Selections page states (as designed by AIB): 29

31 The MAP itself Under Parts 7 and 9 we find the MGL 90 34O law language. The MAP policy states under General Provision 18 and 19 30

32 The MAP policy states under General Provision 18 and 19 Granted one ONLY gets a MAP ONCE but every year one gets the Coverage Selections Page 31

33 Renewal questionnaire. We require that at LEAST every three years the company MUST send a renewal questionnaire to an insured The MA auto manual (AIB and MAIP) reminds us: The renewal form states: 32

34 The renewal form ALSO states: AND SO there ARE laws. And there are questions. And those who lie.cry 33

35 WHAT is a household member. Living with YOU And RELATED to you. Or legal involvement WHAT is a customary operator. Good question not defined in policy in manual ask company 34

36 Trailer and map I have a customer who has a trailer in his personal name. Currently he is only a listed driver on his family s company policy of whom he is an employee. So he doesn t have his own personal insurance. How would that work with stamping his expired Trailer Plate to renew registration? Wouldn t he need to have a personal auto policy in his name in order to have liability extend over to the trailer? Trailer and map Or could he possibly be added as additional named insured on the commercial policy? Could we then add trailer onto it since it is commercial, of course with the okay of the Business and the Company writing it? 35

37 Trailer and map From a personal lines standpoint if he doesn t have an MAP in his name, I was always taught you can t stamp the RMV but I m sending this to Donna McKenna, VP Communications for her input. Donna says I agree with Irene. Even though the MAP provides automatic (FREE) liability coverage for an owned or non-owned trailer being towed by a vehicle listed on the coverage selections page, he would NEED a MAP and a vehicle in order to get that coverage. Trailer and map From a BAP standpoint you d have to ask the company. Most underwriters won t add a personally owned trailer to the BAP of a business. The MM Additional insured endorsement is really not for that purpose but if they added it to dec page and added him as the additional insured for it then it could work. The worst that can happen is no. Or he can sell trailer to commercial entity and then it registers it and then if he has permission to use it then he would be an automatic insured under the BAP 36

38 Trailer and map Ok so regarding trailers (just like a small boat trailer etc) I know whoever is pulling the trailer (regardless if it is their trailer or not) their insurance would respond for liability. What if whoever is pulling the trailer (that they did not own) and their insurance did not respond Would the owner of the trailer s insurance company respond? Trailer and map My client has a commercial auto policy only. And he may borrow his sons trailer, and the commercial auto will not respond So will the son s policy Ok I have just totally confused myself! J 37

39 Trailer and map The MAP states under the Your Auto definition Under Parts 1, 2, 3, 4, 5 and 6 the term your auto also includes any trailer not described on the Coverage Selections Page as covered under those Parts. Trailer and map The MAP provides Parts 1-6 (assuming you bought them) for ANY trailer owned or non-owned so If I own it my parts 1-6 will be there for me and for someone I let use my auto. And the definition of trailer is 6. Trailer means a vehicle designed to be pulled by a private passenger auto, motorcycle, pick-up truck, van, or similar vehicle and designed for use on public roads. This includes a farm wagon or a farm implement. 38

40 Trailer and map The BAP can provide liability coverage for a non-owned trailer As long as liability is purchased even the worst symbol activating liability coverage under the BAP symbol 7 provides coverage for a non-owned ATTACHED trailer: Trailer and map Can anyone please respond to me regarding travel trailers and mass auto Insured puts travel trailer on his auto policy and we insure with coll and comp coverage While he is towing the vehicle and anything happens I know we are all set I know we are all set as long as the trailer is attached to the vehicle. 39

41 Trailer and map Insured pulls into state forest and detaches trailer Does he lose his coverage? I feel the best way to insure these is thru Foremost But I need to confirm the unattached travel trailer at camp site Trailer and map The definition of auto in the MAP states: 40

42 Trailer and map SO a trailer IS an auto whether attached on road or detached used recreationally. That does NOT mean left all year round at camp ground/ Parts 1-6 are free whether attached or not under Your Auto definition Under Parts 1, 2, 3, 4, 5 and 6 the term your auto also includes any trailer not described on the Coverage Selections Page as covered under those Parts. Trailer and map As long as it is a trailer by definition 6. Trailer means a vehicle designed to be pulled by a private passenger auto, motorcycle, pick-up truck, van, or similar vehicle and designed for use on public roads. This includes a farm wagon or a farm implement. Trailer has Parts 1,2,3,4,5,6 if show for ANY your auto on Coverage selections page.and 7 and 9 if shown on Coverage Selections page FOR the trailer 41

43 Trailer and map Does the MAP only provide liability coverage when a trailer is attached? Trailer and map No as shown previously as long as buy Parts 1-6 for a covered auto then get Parts 1-6 FREE for defined trailer attached or not General Provision 18 reinforces this When NOT attached car has Parts 1-6 and so does trailer when they ARE attached only ONE set of limits 42

44 Trailer and map BEWARE if you keep trailer at a campsite YEAR round beyond recreational use and now a premises or residence use then it is NO longer and auto and even though listed on auto policy there is NO coverage that is when a specialty policy is necessary PIP and.medicare With regards to your article about discouraging a PIP deductible, I was also told by a claims person that if you are a person who only has Medicare or Medicaid, it can't be used as "primary" for auto accidents, and therefore, you d be on the hook for the first $2000 if you have a PIP deductible. Is that also true? 43

45 PIP and.medicare That could very well be true I heard from someone else who told me that regarding Medicaid/medicare that THEY can suck on to ALL $8,000 worth of PIP unlike other health insurance providers since the way the law is written gives them wiggle room..and companies don t want to waste the defense dollars. We re from the government and we re here to help! PIP and MP and.health insurance If my insured has health insurance and takes a PIP deductible will that be a problem? 44

46 PIP and MP and.health insurance The health insurance plan can be written to preclude the first $2,000 or auto related medical bills even if the insured opted for a PIP deductible. I bet that the return premium for the PIP deductible was NOT $2,000! The insured MUST check with their health insurance carrier! PIP and MP and.health insurance AND Metropolitan v. Blue Cross. MA Supreme Court stated Health insurance carrier could come back after the auto medical payments And/or deny clients for auto related medical bills HIGHER than $2,000!!!!! 45

47 PIP and MP and.health insurance PIP originally started at $2000. When limit increased the law disallowing health insurance companies from attaching wasn t changed PIP and MP and.health insurance If your insured buys $25,000 medical could the health insurance carrier attach the excess $6,000 and PIP and the $25,000 in MP to reimburse itself and insured not have $$ for items NOT covered by health insurance??? Yes it depends on how they write their policy. 46