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

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('8&$7,21352*5$0
MORE ?4U...Questions for You ...
MORE Mass Auto
sponsored by
10/27/2014
MORE?4U
Massachusetts Personal
Auto
with
Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CRIS, CPIW
Vice President of Technical Affairs
Massachusetts Association of Insurance Agents
Buying another vehicle
Your customer calls you on Monday to let you know that he is
buying a new car. On Friday, he will trade in his old car and pick
up his new car. The dealer faxes over the paperwork on Tuesday.
The customer will have a bank loan, and the dealer is asking for
a binder so that the bank will release the check for the car.
a. Can you issue the binder even though your customer has
not taken delivery of the vehicle?
ABSOLUTELY
b. Is there any special language needed on the binder seeing
how the title has not been signed over to your client?
Yes … “Coverage becomes effective upon transfer of title.”
1
10/27/2014
A replacement
vehicle is
covered if ppa,
pu, motorcycle,
trailer
How long is a replacement vehicle covered?
A replacement vehicle is covered for a MAXIMUM of 30 days from date
LOST possession of the vehicle that company currently knows about
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10/27/2014
It doesn’t say
that it must be
registered to be
covered … it says
that YOU must
take title or lease
as a permanent
replacement
What COVERAGE
does a
replacement
vehicle get…
The MAP doesn’t
discuss this
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10/27/2014
What COVERAGE does a replacement vehicle get…
The MAP doesn’t discuss this…
Historically, a replacement vehicle gets the coverage of
the vehicle it replaces ….
I would caution a client to call before they think they are
getting a replacement vehicle … if they don’t currently have
collision and/or comprehensive
MGL 90
Section 340
does state
that collision
is a
mandatory
offer
coverage …
But I’d rather
already have
had the
discussion
BEFORE a
loss
4
10/27/2014
The policy lasts longer
than the plate …
7 day law for transfer
of vehicles with RMV
Regarding the registration process for the transfer
buying a new car. On Friday, he will trade in his old car and pick up
his new car. The dealer faxes over the paperwork on Tuesday.
What day do you stamp the RMV????
One MUST talk to the client ..if they are driving OLD car
until FRIDAY … then FRIDAY is the date
If you date it Tuesday and the dealer processes paperwork
on Tuesday your insured is driving an unregistered vehicle
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10/27/2014
What day do you add it to the MAP????
Coverage became effective on transfer of title .. With all
good luck transfer was done on Friday …
Just remember …coverage became effective on date title
signed over to YOU
What day do you add it to the MAP????
Do some companies want you to wait until the vehicle is
actually REGISTERED?
Again …remember …coverage becomes effective on date
title transferred to YOU
6
10/27/2014
What day do I endorse the policy when ….
Client buys replacement vehicle but dealer issues new plate
This is an additional auto according to the MAP
What does the client get for coverage on this “additional auto”
Victor Fanikos, Esq., formerly legal counsel MA DOI stated
“Whatever the client wants”
One should be able to argue whatever coverages are on the other
vehicle plus mandatory offer of collision ….
7
10/27/2014
But it is NOT an additional auto as far as the client is concerned …
But it IS an additional auto per the policy
That other plate needs to be cancelled ASAP …
And then you need to ask the company what they want to do for
premium …technically the company was covering TWO vehicles at
the same time.
When does coverage start …or not
We were having a discussion in our office about when coverage is
active for a vehicle. Some are saying there is coverage as soon as we
stamp it and some are saying coverage starts once the transaction goes
through at the registry.
Below are a few situations.
We stamp an RMV1 today and the insured takes the paperwork to the
registry this afternoon and it gets rejected. It currently is registered to
the boyfriend with Revoked plates. If the boyfriend drives the car even
though the paperwork didn’t go through are we still on the hook for
this because we provided a stamped RMV1??
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10/27/2014
Another situation would be a customer comes in to start a new policy
which has cancelled for Non-Pay and the plates are revoked. The
insured is going to be taking the RMV3 to the registry to get the plates
reinstated. We stamp the RMV1 collect the 100% premium and send
them on the way letting them know there is no coverage until the
paperwork is processed at the registry. The insured decides to take the
chance and still drives the car with the revoked plates to the
registry. On the way there is an accident, would there be coverage
provided by the new company or would the insured be without
insurance??
One of our coworkers said we should be adding the new vehicle the
same day we are stamping the RMV1 to prevent any coverage
issues. This causes a problem when people buy cars from a dealer and
they send the paperwork on a Wednesday and are not
registered/picked up until Friday
9
10/27/2014
On the first policy …
first application …
coverage begins date and time stated on application … if insured never
goes to registry …then the company has to legally cancel policy.
If the named insured has his/her license under revocation
or
doesn’t have a current legal right to drive such as foreigner who has
been her over 1 year …
or
someone from a country not listed on the foreign drivers license article
written by RMV or who currently owes outstanding auto premium to a
MAIP carrier…
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10/27/2014
then the agent could have a problem with enforcing coverage through
company …
as those are the reasons why a voluntary or maip carrier does NOT
have to issue coverage …
other than that …
getting to the registry has NOTHING to do when coverage actually
starts.
I know in todays automated world that is how many companies choose
to do it …but …
they ARE providing coverage from the second you and the insured are
done with the transaction.
11
10/27/2014
On a replacement or additional auto once the insured HAS an auto
policy …
coverage begins when the title is signed over to client … again …has
NOTHING to do with RMV transaction.
We stamp an RMV1 today and the insured takes the paperwork to the
registry this afternoon and it gets rejected. It currently is registered to the
boyfriend with Revoked plates. If the boyfriend drives the car even though
the paperwork didn’t go through are we still on the hook for this because
we provided a stamped RMV1??
Your first question …may I “assume” that boyfriend signed title over to
girlfriend … and you have completed application in her name - then if
there is an accident …it will be extremely messy – but insured can
argue that coverage exists –
as the agent I upload or email or however you process information
…and report claim ..
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10/27/2014
Another situation would be a customer comes in to start a new policy
which has cancelled for Non-Pay and the plates are revoked. The
insured is going to be taking the RMV3 to the registry to get the plates
reinstated. We stamp the RMV1 collect the 100% premium and send
them on the way letting them know there is no coverage until the
paperwork is processed at the registry. The insured decides to take the
chance and still drives the car with the revoked plates to the registry.
On the way there is an accident, would there be coverage provided by
the new company or would the insured be without insurance??
Your second question …
again …date and time that you and insured have decided that coverage
begins …has nothing to do with RMV …
I’m sending this to Donna McKenna, VP Communications as she
understands RMV and UMS issues …that I don’t …but … new carrier is
on the hook.
13
10/27/2014
If there is a CURRENT policy …and the insured has TAKEN title …that is
the day coverage begins …
RMV is just whether one is LEGAL …not whether one is INSURED:
An additional auto is covered for 7 days … hopefully you have
discussed what coverages the client wanted …otherwise one is
arguing - at least same coverages as Parts,3,4,5,6,12 currently showing
and MA law says mandatory offer of $500 deductibles on
coll/comp. When Victor Fanikos, JD was legal counsel for MA DOI …he
used to say on additional auto client got “whatever they wanted”
…he’s retired now.
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10/27/2014
On a replacement vehicle …the end of the policy …automatic
termination provision …states that coverage lasts for 30 days from sale
of vehicle that we know about … unfortunately … on a historic basis …a
replacement vehicle gets coverage of vehicle it replaced …if we haven’t
talked to client.
Cancelling coverage
What date do I cancel the insurance on a vehicle that was totaled
and no other vehicle was on policy. I wanted to cancel it the day
after the loss and the carrier wouldn’t let me
Cancelling coverage the day after the loss if the insured rented or
borrowed vehicles would NOT be a good idea…
EVEN if the company allowed it
15
10/27/2014
Cancelling coverage
and no other vehicle was on policy. I wanted to cancel it the day
after the loss and the carrier wouldn’t let me
The policy doesn’t really allow cancellation the day after the totaled
vehicle claim unless the insured had turned the plate in.
Cancelling coverage
and there was another vehicle was on policy. I wanted to cancel it
the day after the loss and the carrier wouldn’t let me
Again, the policy doesn’t really allow cancellation the day after the
loss unless you have turned in the plate or purchased another policy
or it has been 30 days
16
10/27/2014
Cancelling coverage
Per the automatic termination provision one can argue that the
policy can be cancelled 30 days after the title has been signed over
to someone else and another vehicle has not been registered
Cancelling coverage
Though …if insured DOESN’T get around to turning plate in …the
company does NOT have to return premium
17
10/27/2014
Valuing Total loss claim
One of our insured’s paid $500 for a vehicle, he suffered a total
loss. The NADA was $2400, but the insurance co came back &
stated that they could not honor the NADA value & they went based
on a Market Value Program which they have.
Initially they were only going to offer what the insured paid for $500
but eventually the insurance co came up to $1400 final offer after
going back & forth with them.
I then explained to the co that the insured paid Sales Tax at the
RMV based on the $2400. This happens a lot also.
When someone goes to the RMV to register a vehicle, if the NADA
book value is more than what the insured paid, the RMV charges
the Sales Tax based on the higher value, so why can’t the co. honor
the same value?
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10/27/2014
What I paid for something should NOT penalize me now as the same
offer might not be in existence. The MA DOI approved the AIB
mandatory endorsement for determining ACV. See attached. It is
based on the standards of repair. Ultimately the insured can make a
consumer complaint ...that might instigate a higher payment just to
avoid it.
If I paid $100,000 for a $10,000 vehicle ...would the company then
want to consider what I paid for it?
As of September
2013 – the AIB
suggested
endorsement
Should be on
every policy – it
introduces
standards of
repair regulation
language to the
policy
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10/27/2014
Independent contractors and PIP
Our insured was in an accident and he is self-employed. He
does not have workman’s comp.
Will PIP pay for his medical bills? He was driving on his way
to pick tools up.
Thank you for your help!!
Independent contractors and PIP
It should …
The exclusion states:
3. Anyone who is entitled to benefits under any workers’
compensation law for the same injury.
An independent contractor is an employer in MA and therefore
not technically “entitled” to W/C benefits …UNLESS he/she
buys a W/C policy and ELECTS into coverage.
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10/27/2014
Negligence and suing
If an auto accident is 50/50. Is the customer eligible to
be reimbursed rental from the claiments carrier of at
least 50%?
In Massachusetts one can recover in court if they are
50% or less at fault.
Of course, one only recovers that portion that one is not
negligent. So in a 50-50 …one can only recover 50% of
their damages.
Once one is 51% at fault one loses the right to recover
in MA and one gets surcharged for the accident.
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10/27/2014
Based on a court case a
previous legal counsel
for MA DOI …
Wrote a letter stating
claimant has right to
comparable vehicle …
but that % of value that
NOT negligent
Based on a court case a
previous legal counsel
for MA DOI …
Wrote a letter stating
claimant has right to
comparable vehicle …
but that % of value that
NOT negligent
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10/27/2014
In Massachusetts one can recover in court if they are
50% or less at fault.
Of course, one only recovers that portion that one is not
negligent. So in a 50-50 …one can only recover 50% of
their damages.
Once one is 51% at fault one loses the right to recover
in MA and one gets surcharged for the accident.
Substitute transportation owned auto
If purchase substitute transportation then can be paid
100% of what purchase… and if your company can’t
subrogate for entire amount …oh well
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10/27/2014
Substitute transportation owned auto
I know it is not a cheap coverage …but insured should
look at rental costs of comparable vehicle to see which
limit works best for them
New driver to policy
Technical question for new driver:
Our insured’s son is taking his driver’s license test
tomorrow( Saturday).
If successful, can he be automatically included as a
driver under Mass auto policy until we can add him
with the carrier.
Can’t seem to get an answer from the carrier.
24
10/27/2014
OF COURSE the policy will apply …
at least for the weekend …and a tad longer …
by definition …living with you and related …
he is a household member.
The MAP follows YOU and household members for
parts 4,5,6,7,8,9 and the MAP covers YOUR AUTO if
used with consent.
General Provision 18 in the policy states you have to tell about
drivers on
1) original application
2) renewal statement of facts
3) any other endorsement change you the insured makes
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10/27/2014
General Provision 19 states you have to also tells us ASAP …if
rating information changes:
Certainly that would allow the weekend J
Also Parts 7 and 8 tone it down a tad …and give 60 days…not
60 days FREE …just a grace period to tell us.
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10/27/2014
Certainly first thing the next week to verify that son got
licensed is allowed.
I can’t believe no one in the company could tell you this.
Is there some kind of never talk to an agent rule …at
ALLLLLLLL?
Stacking limits or not
Husband and wife own their own vehicles …
insured on same policy … wife has 250/500 OBI …
husband has 50/100 OBI.
Both insured in husband’s vehicle … will wife’s policy respond?
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10/27/2014
I went looking for the language in the policy … it says they
won’t pay
There IS a premium for Part 5 … but not at the 250/500 level.
I was amazed that the company allowed different limits for the
two vehicles on the same policy
I know it states that premium must be shown …the company is
ONLY responsible for the “YOUR AUTO” that insured is in at
time. If in a non-owned auto …can go back to ONE highest
limit
General provision 15 states:
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10/27/2014
when one is in the auto that is shown on the dec page …that is
the ONLY limit that will apply …
and even if spouses had separate policies …the provision you
stated discusses that spouse CANNOT go back to own policy if
driving a vehicle owned by spouse
Hope agent had client sign a disclaimer that differing limits is
…. stupid.
Towing
We submitted a tow bill claim to Safety for one of our clients.
Safety is denying the claim as it was a police tow due to the
vehicle being unregistered.
The vehicle has the towing coverage noted on the policy.
Please advise.
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10/27/2014
Towing coverage or not
Even back in “my day” …police tows were not eligible.
The policy language states:
What was cause of police tow …was vehicle disabled
from a covered incident …or …
was the insured …”disabled” …
PD liability
I don’t know if you are aware, from the news, of an auto
accident that occurred inside a Liquor Store in Fitchburg, MA
yesterday (4/9/14).
A vehicle crashed through a window of a liquor store. We are
unsure if the operator was sober or not. Thankfully, no one
was hurt; except for the driver.
Our million dollar question is does the MAP cover loss of
income/revenue for the business? We are trying to read the
policy but obviously liability would serve for bodily injury.
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10/27/2014
PD liability
The MAP states:
It pays damage to property …other than autos …and the loss of
use of damaged property …so that would be loss of income for
store …but … what PD limit does this person have is the
question …hopefully high and an umbrella if serious damage to
store
Car on consignment
I have a customer who owns a handicap van. They want to sell
it so they left it at an auto dealership on consignment. My
customer still owns the vehicle and it is registered to them and
insured under a MAP.
If someone was test driving the vehicle, would their MAP
respond for Liability and Physical Damage? If the vehicle was
stolen or vandalized would the MAP respond? If the dealer or
an employee of the dealership were in an accident while
driving our insured’s vehicle would their MAP respond?
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10/27/2014
Car on consignment
The MAP responds if the driver has "consent of the owner".
I would want the insured to put it in writing that prospective
drivers have consent ...
so there is no problem ... otherwise ...might get gray
Having said that ...as an agent ...
I want to tell the company so that they can set it up for nonrenewal ...
as I wouldn't want to do this for any extended time voluntarily.
Car on consignment
.
If insured turns in plate ...
still legally responsible ...
and totally dependent on dealership ...and vehicle owner is
not an insured under that policy.
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10/27/2014
PD and c/c/c
Jack & Jill aren’t married but own a home together & have
lived together for years.
Jack has a vehicle registered in his name and Jill has a vehicle
registered in her name.
Can they be on the same policy together?
I spoke to a claim rep and was advised that as long as they are
both listed drivers there would not be an issue with claims.
PD and c/c/c
Their current agent has them on one policy.
I always thought if they were not married, then they had to
have separate policies unless of course they owned the
vehicles jointly.
Would appreciate any clarification .
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10/27/2014
PD and c/c/c
I guess ... a company can do as it wants ...
and give them multi-car discount status.
My problem with this ...if Jill hits Jack's car and they are BOTH
on the same policy ...Jill's policy doesn't pay PD to "YOUR"
property ..
Theft and legal responsibility
If an insured's car is stolen or used without permission how
does the MAP respond in terms of BI, PD and Collision/Comp?
Is there any state statutes that protect him/her in a case like
that?
I know there are policy exclusions but will the policy still
defend an insured if they are sued as the vehicle owner?
Just curious, if you have a tech talk on it, send it back!
34
10/27/2014
If my car is “truly stolen” …then I am not legally responsible for
the actions of it.
Part 4 pays if legally responsible:
If I did not give my consent for someone to use my vehicle …
that gives the company the right to deny coverage under many
of the optional coverages …
and reduce Part 4 to $5,000 …
whether or Not …I as the owner would still have some legal
responsibility if I don’t report it as stolen and prosecute …is a
different story.
35
10/27/2014
Importance of UM/UIM
I have an off the wall question.
I am trying to put a training package together and one of the
questions that keep being asked is what are the benefits or
reasons why we should have parts 3, 5 and 12 the same on an
auto policy.
Do you have some examples or reasons for this benefit? We
are always told that we should write it this way, but now I am
asking for the why?
BI/UM/UIM - All these coverages protect the NAMED insured’s
financial security and future lifestyle.
If I don’t have high BI limits …then I can lose my house, my pay
can be attached (leaving me only 125 per week) my savings
account can be depleted, my household contents and cars and
any personal possession might have to be sold.
I’ll never be able to give my daughter the wedding of the
decade or send any of my kids to college.
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10/27/2014
I’ll have to wear the same outfit …day after day after day…. Etc.
All due to an “accident” …an unplanned event … I will have
mental images of the incident I caused …
but do I also want financial failure and insecurity for the rest of
my life because of an unplanned incident???
Part 3 and 12 …sill protect ME …when someone couldn’t afford
to or didn’t want to. I am the VICTIM – someone the
perpetrator who didn’t want to or couldn’t afford to buy
insurance. I’m very injured ..I can never work again … I didn’t
have disability income insurance …or did …but that is a fixed
percent of a stagnant income …never to increase like a
paycheck would have …or worse yet …I am stuck with SSI and
the government.
How will we still afford our house, the wedding, college for our
kids …vacations …
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10/27/2014
Part 3 and 12 …sill protect ME …when someone couldn’t afford
to or didn’t want to.
I am the VICTIM – someone the perpetrator who didn’t want
to or couldn’t afford to buy insurance.
I’m very injured ..I can never work again …
I didn’t have disability income insurance …or did …but that is a
fixed percent of a stagnant income …never to increase like a
paycheck would have …or worse yet …
I am stuck with SSI and the government.
How will we still afford our house, the wedding, college for our
kids …vacations …
So …3/5/12 are ALL ABOUT ME!!!!
Taking care of myself and my family … I CANNOT buy 3/12
than I buy Part 5.
38
10/27/2014
I personally have UM/UIM under my PUP too …
which is allowed by some PUP carriers in MA such as RLI
Hitting a pothole …and resulting loss
We have a client that recently had a major single vehicle
accident. They hit a pot hole and totaled the vehicle. Our
insured was injured quite extensively.
I want to confirm that the only coverage they have for their
own injuries are the PIP and Medical Payments. Their injuries
will exceed the amount of their coverage and I honestly have
not had this experience in my 20 plus years in the business!!
I wanted to confirm this.
39
10/27/2014
MP and PIP are all the driver of the vehicle can get …a
passenger could sue the driver.
I don’t know if there is any recourse against the town/state
responsible for the pot hole …I doubt it .. but I’ll send this to
Dan Foley, Esq., VP Government Affairs.
Any chance to sue the town and/or state Dan?
There is a limit on municipal liability for cities and towns. It is
$100,000. Your insured should file a claim because your
insured may have a chance to recover something. But don't
wait too long to file the claim. If possible, I would get pictures
of the pot hole, if it hasn't already been repaired.
Good luck.
Dan
Daniel J. Foley, Jr.,Esq.
40
10/27/2014
Consent of owner ….or not
A parent Owner/Named Insured on a MAP provides a covered
auto to her daughter for her unrestricted personal use.
Daughter is a listed operator.
Daughter allows another party to use the auto. (Not regular
use.)
That driver gets into an accident with the car and causes BI and
PD, as well as damage to the car.
Our insurer’s claim rep pushes Mom into answering that use by
others was not necessarily permitted.
Claim rep denies coverage based on lack of permission.
Our insured felt pushed to the wall and daughter felt that her
permission to use the car could be assigned to others.
I’d appreciate your thoughts/opinion about it.
41
10/27/2014
The MAP excludes coverage if the driver does not have the
“consent of the owner” …the MAP is MUCH more specific than
the national PAP …which states “reasonable belief”
HOW did the adjuster convince the insured to do this?
Part 4 excludes:
If driver has consent …
then if they are a “customary operator” … they have to be
listed and paid for …
or failure to furnish information general provision 18 allows
company to deny all optional coverages and restrict Part 3 and
4 to what they are required to sell per MA mandatory offer
law.
42
10/27/2014
This is ALWAYS a dangerous situation …
You say “provides daughter” …this makes me think that
possibly daughter does NOT live at home?
In which case she is ONLY covered when in the vehicle.
If she is supporting herself and lives independently …it would
have been better to put the car in her name …the rating should
be essentially the same …and then she would have been the
named insured and consent to use vehicle would be hers.
43
10/27/2014
The fact that vehicle is provided for her use …is immaterial to
the MAP ….
She is a “permissive user” not a household member if she
lives on her own
and would be better served to have car in her name
But …bottom line if boyfriend is NOT “customary” routine
operator ..the company adjuster should NOT try to get out of
paying claim by using the “consent card”
Who can sue who
Insured has a car accident.
His daughter is an occupant of the vehicle and is injured. She
is a household member
Is the daughter entitled to any benefits under part 5 or would
it be restricted to part 2 only?
44
10/27/2014
Who can sue who
In the MAP an occupant can sue the negligent driver ...
even if they are related household members and
both insureds ...
an insured can sue an insured under the MAP.
45

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

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