?4u questions for you mass auto · public or livery conveyance …uber and you i don’t care how...

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

10/27/2014

1

?4U

MassachusettsPersonal Auto

withIrene Morrill, CPCU, CIC, ARM, CRM, LIA, CRIS, CPIW

Vice President of Technical AffairsMassachusetts 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.

10/27/2014

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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,


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

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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.

Part 4

Part 6

Part 6

Exclusions


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.

Part 7

Part 9

Exclusions

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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


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

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Part 4

Part 6

Part 6

Exclusions

The MAP of the person will NEVER NEVER NEVERapply to ANY vehicle that is regularly used by an insured under parts 4/5/6/7/8/9.


Part 7

Part 9

Exclusions

The MAP of the person will NEVER NEVER NEVERapply to ANY vehicle that is regularly used by an insured under parts 4/5/6/7/8/9.

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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.


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

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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


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 …

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If you routinely usecompany carroommates carZip car … same one all the time


V-ride … yet another …deal… to save gas money …because you drive another car

to regularly use someone else’s car

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3 page document to get you to commit to drive their vans and bring yourself and others to work


Client will “bump heads” with regular use exclusion …

Hope insurance from V-rides works!

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Vehicle sharing …or not

Flight Car

Relay Rides

Other social media businesses solicit your client to “rent out” their car ….


MAP doesn’t exclude …

But …not really eligible if we knew about it

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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

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I don’t CARE HOW Uber advertises …

That activity is NOT allowed under the MAP –whether or not there is an exclusion


The insured has an obligation to inform the carrier when they start this activity so carrier can set up for non-renewal

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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.

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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…


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.

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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



One also gets sales tax and loss of use if applicable

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The newer the item the less the depreciation


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?

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The MAP pays collision and comp losses on an ACV basis


We have a standards of repair regulation in Massachusetts discussing how the value of losses should be determined:

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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

10/27/2014

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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.


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If you want it I have a “fillable” pdf form that allows you to complete Canada Card

Email me …

But …one must make sure that one’s carrier has in fact filled power of attorney forms with Canadian Government

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What’s the law

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?

What’s the law

MA laws requiring “full disclosure” on the applicationMGL 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

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What’s the law

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.

What’s the law

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.

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What’s the law

There is also a law regarding “fraud” - MGL c. 266, § 111B Motor vehicle insurance policies; penalty for fraudulent claims

What’s the law

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.

10/27/2014

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What’s the law

One last more specific law …regarding Part 7 Collision and Part 8 Limited Collision …MGL 90 Section 34O Compulsory Motor Vehicle Liability Insurance

What’s the law

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 ….

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What’s the law

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.

What’s the law

The New Business application states:

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What’s the law

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.

What’s the law

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

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What’s the law

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

What’s the law

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

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What’s the law

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.

What’s the law

The Back of the Coverage Selections page states (as designed by AIB):

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What’s the law

The MAP itself … Under Parts 7 and 9 we find the MGL 90 34O law language ….

What’s the law

The MAP policy states under General Provision 18 and 19

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What’s the law

The MAP policy states under General Provision 18 and 19

What’s the law

Granted …one ONLY gets a MAP …ONCE …

but every year one gets the Coverage Selections Page …

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What’s the law

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:

What’s the law

The renewal form states:

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What’s the law

The renewal form ALSO states:

AND

What’s the law

SO …there ARE laws….

And there are questions ….

And those who “lie” ….cry

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What’s the law

WHAT is a “household member” ….

Living with YOUAnd

RELATED to you ….

Or …legal involvement

What’s the law

WHAT is a customary operator….

Good question …not defined

in policy

in manual

ask company

10/27/2014

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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?

10/27/2014

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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 99 50 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

10/27/2014

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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

10/27/2014

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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.

10/27/2014

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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 colland 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.

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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:

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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

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

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.

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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

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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?

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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?

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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!


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!!!!!

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PIP originally started at $2000. When limit increased…the law disallowing health insurance companies from attaching …wasn’t changed


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 ….

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