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Will my insurance cover me if I was drunk and got into a car wreck?
Typically an insurance policy doesn’t distinguish the condition of a driver at the time of an accident. Whatever auto insurance carrier is on the auto at the time of loss would be responsible for all coverages in place at the time of loss as they would apply. Of course this may vary from carrier to carrier but is best determined by carefully reading the policy. However, once a driver has a DUI on their driving record it will significantly affect their ability to obtain auto insurance at a reasonable price if attainable at all. It is always best to know the specific policy exclusions and then to reshop auto quotes.
Basic Insurance Definitions
Glossary – Commercial Property
Additional Coverages: Coverage for indirect losses that would not otherwise be covered by the CP policy.
Agreed Value: Optional coverage that provides a predetermined amount in case of a total loss.
Bailee: One who is charged with the care of the property of another. For example, a garage is bailee of a customer’s (bailor’s) car (the bailment) and a jeweler is a bailee of
customer’s jewelry while in for repair or appraisal. There are various standards of care that a bailee must meet, depending upon whether the bailment is gratuitous or a bailment for hire (paid).
Building: The building or structure described. A building must have a roof and four walls.
Business Personal Property: Personal property owned and used in the business of the
named insured, including personal property of others in the care, custody or control of the named insured.
Collapse: “An abrupt falling down or caving in.” This falling down or caving in may be of a building or any part of a building.
Commercial Property Policy: The principal contract for insuring the building and business personal property exposures of commercial insureds. Generally referred to in this course as the “CP policy.”
Computer Virus: An unauthorized code into a computer.
Concurrent Causation: To avoid unintended insurance recovery in situations that involve an excluded peril and a non-excluded peril, current forms contain concurrent causation exclusions; concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is not excluded.
Concurrent Causation Doctrine: Holds that losses are covered if caused jointly by an
excluded peril, such as flooding or earth movement, and some other peril not excluded by the policy, such as negligent construction.
Concurrent
Causation Exclusions: Exclusions added to modern property policies in response to litigation activity involving the concurrent causation doctrine. They are designed to avoid intended insurance recovery in situations that involve damage that can be said to be caused by both an excluded peril and a nonexcluded peril. Concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is
not excluded.
Consequential Loss: Indirect loss arising out of direct damage to property, such as spoilage of food following lighting damage to a freezer unit.
Coverage Extensions: Additional insurance for things already covered under the CP policy.
Debris Removal: Coverage for the expense of removing debris of covered property that has been damaged by a covered cause of loss.
Delay, Loss Of Use, Loss Of Market: Indirect losses that are the result of a covered loss, such as a restaurant losing customers, with the attendant revenue, while rebuilding after a fire.
Direct Damage: Damage directly caused by a covered cause of loss.
Endorsement: An attachment to a basic policy that becomes part of the policy and modifies coverage. Endorsements can add, delete, or modify provisions in the basic policy.
Functional Valuation: An alternative valuation method that provides for the replacement of a scheduled building with similar property that performs the same function but is less costly.
Increased Cost Of Construction: Coverage for the additional costs of complying with
enforcement of an ordinance or law regulating the construction or repair of buildings after a loss.
Indirect Or Consequential Damage: Damage that arises as a result of a direct loss – such as loss of income when a business must shut down due to a fire. Inflation Guard A provision by which the limits of coverage are increased on a regular basis by a designated percentage in order to offset increasing building costs associated with inflation.
Intangible Property: Property that cannot be seen or felt – such as customer records, patents, and trademarks.
Liberalization: A broadening of coverage without an added charge to the insured.
Named Perils: A specific list of covered causes of loss, such as fire, lightning, or wind, contrasted to open perils, which provides coverage for any damage not otherwise excluded.
Open Perils: Property coverage that applies to risks of loss on a general basis, in contrast to policies that cover specifically identified (named) perils. Formerly known as “all risks”
coverage.
Permanently Installed: A piece of property that is set up for use and intended to
remain in the same place without fundamental change.
Personal Effects: Items usually worn or carried on a person.
Personal Property: All property other than real estate.
Physical Damage: What’s covered by property insurance policies.
Prosecution Or Abatement Policies: Insurance policy that pays for offensive litigation against a patent infringer.
Separation Of Coverage: The various categories of business personal property
(stock, machinery and equipment, furniture, fixtures, tenant’s improvements and betterments) may be assigned individual limits of insurance through the use of this
endorsement.
Sinkhole: A hole in the ground created when water wears upon limestone or dolomite.
Structure: A broader term than building. Anything that is constructed.
Subrogation: The insurer’s right to collect payment from the ultimate wrongdoer.
Valuation: The method used to place a value on damaged property.
Vandalism: The willful and malicious damage to or destruction of covered property.
What is an HSA plan?
An HSA plan stands for “Health Savings Account” and typically is associated with “high deductible” medical plans. HSA plans usually have lower premiums than standard “co-pay” types of plans as the insured normally pays the first dollar amounts up to the “high deductible”.
The high deductible is currently around $2500 to $5000 for individuals and can be around $10,000 for families. Either the plan will pay %100 after the deductible is met or an 80/20 split with the twenty percent being the insured’s responsibility.
HSA plans normally are good for younger and healthier people who don’t visit the doctor often as the money they put into their HSA is building interest and is tax free up to the annual limit. Thus it becomes a good savings plan for medical emergencies. Some HSA medical plans will include “well visits” which is an added benefit.
Like anything else it is best to shop around and compare different carriers if it is not part of your employment benefits.
Are Personal Umbrellas Necessary?
Personal line umbrellas are not necessary from the perspective of law, lenders or insurance carriers when it comes to covering your home and auto. However, from the perspective of protecting your assets and future it does make a lot of sense.
Personal line umbrellas can be purchased usually from the carrier that currently insures your home and auto. Most surprisingly is the inexpensive cost to have a million dollars over your home and auto policies. Typically a million dollar personal lines umbrella can be purchased for $200 to $300. To have this extra coverage is fairly inexpensive for what you get.
When considering an insurance umbrella consult your agent concerning requirements or any other state specific laws or requirements. And as always be sure to call and get a few quotes.
Why do I need auto insurance?
This is a common question often asked by many younger drivers just starting out on their journey down the road. Mostly the question is prompted by the expense of having to have auto insurance without truly understanding the immediate and future protection that it offers. Once a driver understands the reasons it is definitely easier to accept.
Reason number one is because as a member of the driving community you need to be responsible for any injuries or damage that you may cause to another’s property or being. This aspect of insurance is commonly referred to as liability coverage.
Reason number two is that if you’re driving an auto that is financed by a bank or some other financial institution they require that you protect their interest. This is called Comprehensive and Collision coverage. This insurance comes into play when you either have “bad luck” or you were just being a bad driver.
Reason number three is if someone else hits you and your car and they don’t have any insurance or may be under insured then you will probably want someone to pay you for your losses. Since the driver at fault has no insurance to pay you then you will want your insurance to pay. This concept is much more easier to grasp for many. This coverage is called “uninsured motorist” and “under insured motorist”.
These three reasons usually are the core of why people purchase car insurance in addition to the reality that having auto liability insurance is the law. Of course auto insurance laws vary from state to state but nonetheless the reasons set forth above are a good place to start.
What is the “Limit of Insurance”?
Insurance is always a little bit tricky to understand and when it comes to auto insurance it certainly is no different. For example there are typically 13 exclusions in a Business Auto Policy that should always be understood, however, at the end of the day regardless of the number of covered autos, insureds, premiums paid, claims made, or vehicles involved in an accident the most the insurer will pay on any auto policy will be the limit of insurance shown on the declarations page.
One thing to note is to always be sure that you are comfortable with your limit of insurance as this is the bottom line of what your auto insurance will pay when everything is tallied up.
What is Symbol 8 on my auto insurance?
Symbol 8 represents “hired autos” only. These are autos that the named insured either leases, hires, rents, or borrows. Symbol 8 gives the insured coverage for rented or leased autos during the policy period. Although this will save the insured premium dollars, there are other things the risk manager needs to know concerning the use of symbol 8.
For example let’s take a look at the Gartner Company. The company risk manager explains that the company does not own any autos, but does rent autos every once in a while, and even requires employees to use their own cars on company business. Jeff, the risk manager explains that the company’s current auto policy uses symbol 1 to describe covered autos and as a result has a very expensive premium because of the broad coverage. Jeff the risk manager asks how to lower the premium and still have appropriate coverage.
Max which is Jeff’s agent then explains both symbols 8 and 9 and how this can protect the company while reducing the cost of insurance.
It is important to note that under symbol 8 autos leased, hired, rented, or borrowed from any of the named insured’s employees, partners, members of a limited liability company, or members of their households are not covered.
Symbol 8 is only applicable when the named insured rents, leases, or hires an auto whether at an airport or any other car rental business. Remember that if an employee is on company business and rents a car in his or her own name, symbol 8 will not apply.
Lastly, it is very important to understand that a hired auto is one that is not owned by the named insured!
What is Symbol 1 on my auto policy mean?
Symbol 1 on a auto policy signifies “any auto.” The significance of this coverage symbol for example could be the Kennedy Company, which buys insurance coverage for its auto exposures. Bob, the president of the company, favors a comprehensive approach and thinks any auto that the company owns, hires, borrows, or uses in its business should be insured in order to protect his company from financial loss. The company treasurer notes that the company acquires new autos occasionally, but he does not always have the time to report these new cars to the insurer thus creating an exposure.
In order to handle the request of the insured, the insurance agent for the Kennedy Company uses symbol 1, “any auto”. Symbol 1 meets the comprehensive approach that Bob wants. And, it doesn’t need any correspondence to the insurance company every time an auto is acquired. The BAP covers such autos automatically under symbol 1 for the remainder of the policy period.
Auto Insurance Definitions
Business Auto Glossary
Accident:
An unforeseen and unplanned event on the part of the insured.
Appraisal:
The process by which the amount of physical damage loss on a covered auto is decided.
Collision:
The covered auto’s collision with another object or its overturn.
Comprehensive Coverage:
Any cause of loss except collision.
Concealment, Misrepresentation Or Fraud:
Actions on the part of the insured that allow the insurer to void coverage.
Coverage Territory:
The U.S., its territories and possessions, Puerto Rico, and Canada.
Covered Pollution Cost Or Expense:
Any cost or expense arising out of any request, demand or order demanding that the insured cleanup or respond to the effects of pollutants.
Deductible:
The amount that the insured is responsible for in the event of a loss.
Designated Insured:
A certain person or organization scheduled as an insured on an endorsement for liability coverage.
Designation Symbol:
Any of nine numerical symbols used on the BAP to designate a covered auto.
Diminution In Value:
The loss of value for a damaged auto after that vehicle has been repaired.
Direct Loss:
Auto physical damage loss that does not include loss of use of the auto.
Drive Other Car Coverage:
Insurance coverage for the driver of an auto that is not owned by either the driver or the named insured.
Drive-Away Contractors:
An individual or company hired by an auto dealer to drive cars from point A to point B.
Duties Of The Insured:
The list of steps the insured must take after a claim or loss to assist the insurer in settling the claim or loss.
Exclusion:
Sets out certain circumstances under which liability coverage is precluded.
Hired Autos:
Autos that the named insured leases, hires, rents, or borrows.
Insured:
Any person or organization qualifying as an insured in the who is an insured clauses of the BAP.
Leased Worker:
A person leased to the named insured by a labor leasing firm.
Limit Of Insurance:
The most the insurer will pay for the total of all damages and covered pollution cost or expense combined.
Loss:
Direct and accidental loss or damage to a covered auto.
Nonowned Autos:
Autos that the named insured does not own, lease, hire, rent, or borrow that are used in connection with the named insured’s business.
Other Insurance:
Coverage for the covered auto on another insurance policy.
Pollutant:
Any solid, liquid, gaseous, or thermal irritant or contaminant.
Private Passenger Auto:
A four-wheel auto of the private passenger or station wagon type, including a pickup, panel truck, or van not used for business.
Property Damage:
Damage to or loss of use of tangible property, in contrast to the direct loss definition.
Rolling Store:
A vehicle used as a mobile snack bar or lunch van, bringing products to customers.
Snowmobile:
A land motor vehicle that is designed for use on ice and snow and mainly off public roads.
Subrogation:
A right of the insurer to recover damages from another if the insurer has paid those damages for a covered loss.
Supplementary Payments:
Payments made by the insurer in addition to the limit of insurance.
Temporary Substitute Auto:
An auto not owned by the named insured while used as a temporary substitute for a covered auto owned by the named insured that is out of service.
Temporary Transportation Expenses:
Expenses incurred by the insured to rent or borrow a car because the covered auto has been stolen.
Temporary Worker:
A worker furnished to the named insured for a finite time period to supplement the regular workforce under special work situations.
What is RCV?
This is a great question to ask before deciding on the insurance that you are going to purchase. Whether you are needing car insurance, home insurance or commercial insurance, Replacement Cost Value (RCV) is critical in the settlement phase as this plays a very large roll in the amount that will be offered from the insurance companies.
So why is RCV so important? Simply put it’s the difference between replacing your insured items with new versus used. With RCV the insurance carrier will indemnify the policy holder with the amount of money necessary to replace the insured items at the new price. Without RCV or Replacement Cost Value, the items would be paid out at what it would cost if were to be bought on Ebay or at an Estate Sale.
The settlement dollar amount offered in most cases in a loss is significantly greater, as a result the premium for RCV is greater than ACV or Actual Cash Value. However the premium difference isn’t so much more where it is unaffordable in comparison to an ACV policy. Therefore RCV is typically more desirable when insuring anything if it is offered and affordable to the potential policy holder.
Be sure to check out the article on “What is ACV”.
