Question

Read and complete the following statements regarding the coverages provided by the PAP. • Insurance companies can express their liability coverage using either a combined limit or split limits. If a split limit is used, such as $100,000/$300,000/$100,000, then the third term in the limit expresses the maximum dollar amount that the insurance company will pay for the maximum amount paid for all vehicles damaged in the accident Most states allow you, as a poli each person's bodily injury expenses incurred in each accident hit of your policy, even if the following are true. Check all that apply. • Most states allow you, as a policyholder, to seek reimbursement for your medical expenses up to the limit of your policy, even if the following are true. Check all that apply. O You have already received compensation from your health insurance company. Your insurance company proves that someone else was at fault and you've already been paid by the other person's insurance company. You are occupying a vehicle that is not covered by the policy. Three conditions must be met for you to receive compensation under Uninsured Motorists Coverage. These are as follows. Check all that apply. The only damages sustained in the accident are personal injuries; property damages are not covered. The at-fault motorist is underinsured or lacks insurance altogether. Another motorist must have been at fault in the accident. Underinsured motorists coverage is also available, and protects you, a policyholder, against damages caused by an at-fault or underinsured driver. If the at-fault driver causes damage than the limit of his or her liability coverage, then your company will make up the difference, up to less , and then subrogates with the negligent driver. more • Underinsured motorists coverage is also available, and protects you, a policyholder, against damages caused by an at-fault or underinsured driver. If the at-fault driver causes damage than the limit of his or her liability coverage, then your company will make up the difference, up to , and then subrogates with the negligent driver. a maximum of $100,000 the limit of your policy - --- -- --- - -- - ----.. . -- -.L . ..-L • Collision coverage pays to repair the policyholder's vehicle typically require this coverage, and unless replacement cos vehicle's regardless of who is at fault only if the policyholder is not at fault . Lenders and lessors ny will pay only the

Answer 1

Note: FIB= Fill In the Blanks

PAP or Personal Auto Protection Policy is a standardized comprehensive auto insurance policy covering the following:

Part A- Liability coverage

Part B- Medical payments coverage

Part C- Coverage for uninsured motorists

Part D- Coverage for under insured motorists

Part E- Insured's responsibilities after a crash

Part F- Any other provisions

	CONCEPT 1: Categorization of Automobile insurance policies based on liability coverage provided by the insurance companies
	There are many types of auto insurance policies available in the market like liability coverage, collision insurance, comprehensive insurance, uninsured motorist insurance, underinsured motorist insurance etc.
	However, based on the liability coverage provided by the insurance companies, they can be classified as:
	Split Limit Liability	Combined Single Limit Liability
Features	Insurance policy with different coverage limits for 3 areas- i. coverage for medical bodily injury per person ii. Total coverage for medical bodily injury for the entire accident iii. Total property damage coverage	Single insurance amount including personal injury, accident damage or personal property damage.
	A standard split limit coverage such as $100,000/$300,000/$100,000 means	$300,000 of Combined Single Limit coverage means
	-$100,000 limit for medical bodily injury coverage per person	Coverage of $300,000 for the entire accident; separate amounts for bodily injury and property damage are irrelevant
	-$300,000 limit for bodily injury coverage for the entire accident and
	-$1000,000 for total property damage limits
Pros	Lower premiums, personalized/customized coverage as per needs of the insured	Acts like an umbrella policy to protect insurer from all accidents, specially for high value assets like a home/business
Cons	Insufficient coverage in case of major accidents/higher damage	Higher premium- more expensive

Statement 1: Insurance companies can express their liability coverage using either a combined limit or split limits. If a split limit is used, such as $100,000/$300,000/$100,000, then the third term in the limit expresses the maximum dollar amount that the insurance company will pay for_______.

Answer to FIB 1: the maximum amount paid for all vehicles damaged in the accident

CONCEPT 2
What is Uninsured Motorists Coverage?	What is Underinsured Motorists Coverage?
Type of auto insurance policy that covers you for medical injury or property damage if you are hit by a driver who does not have auto insurance.	Type of auto insurance policy that covers you for medical injury or property damage if you are hit by a driver who has an insurance policy that does not cover your damages in the accident.
Coverage in Uninsured Motorists Insurance	Coverage in Underinsured Motorists Insurance
Uninsured motorist bodily injury coverage	Underinsured motorist bodily injury coverage
Uninsured motorist property damage coverage
Conditions for receiving compensation	Conditions for receiving compensation
1) You are in an accident .	1) You are in an accident .
2) Other driver is at fault.	2) Other driver is at fault.
3) Other driver has no auto insurance.	3) Other driver has insufficient insurance cover for the damages

Statement 2: Most states allow you, as a policyholder, to seek reimbursement for your medical expenses up to the limit of your policy, even if the following are true. Check all that apply.

	Whether applicable?
You have already received compensation from your health insurance company.	Yes; In some states the benefit is given in conjunction with health insurance policy.
Your insurance company proves that someone else was at fault and you've already been paid by the other person's insurance company.	No; it is against the principles of insurance as the damage has already been compensated.
You are occupying a vehicle that is not covered by the policy.	No; it is beyond the coverage of the policy

Statement 3: Three conditions must be met for you to receive compensation under Uninsured Motorists Coverage. These are as follows. Check all that apply.

Answer to FIB 3:

	Whether condition is applicable?
The only damages sustained in the accident are personal injuries; property damages are not covered.	No (Uninsured motorists coverage can cover both personal injuries and property damages)
The at-fault motorist is under insured or lacks insurance altogether.	Yes
Another motorist must have been at fault in the accident.	Yes

Statement 4:

Underinsured motorists coverage is also available, and protects you, a policyholder, against damages caused by an at- fault or underinsured driver. If the at-fault driver causes_____damage than the limit of his or her liability coverage, then your company will make up the difference, up to ______________ and then subrogates with the negligent driver.

Answer to FIB 4A: More damage than the limit of his or her liability coverage (Refer condition no. 3 in Conditions for receiving compensation in concept 2 above)

Answer to FIB 4B: up to the limit of your policy and then subrogates with the negligent driver (There is no specified upper limit of $100,000 and varies from policy to policy taken by the insured.)

CONCEPT 3

What is Collision Coverage?

As the name suggests, this insurance coverage helps in repairs or replacement of the automobile if caused due to collision with another vehicle, object irrespective of who is at fault- you or the other driver.

Coverage in Uninsured Motorists Insurance

Covered- Only damages to the insured's automobile due to actual collision is covered

Not covered- Theft/vandalism damages, medical injury damages or damages to other person's vehicle

Statement 5:

Collision coverage pays to repair the policyholder's vehicle _____. Lenders and lessors typically require this coverage, and unless replacement costs _________the company will pay only the vehicle's_______.

Answer to FIB 5: regardless of who is at fault (Refer meaning of Collision coverage in concept above).