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EXPOSURES AND INSURANCE
PERSONAL INSURANCE EXPOSURES
Personal insurance consists of the insurance coverages designed to transfer the
financial
consequences of personal losses from individuals and families to an insurer.
Personal Auto
insurance is one of the most important types of personal insurance.
Personal Automobile insurance accounts for about one-third of the total property
and liability
insurance premiums in the United States. More than 150 million drivers and
roughly 110 million
private passenger cars are insured in the United States It is a major source of
commission
income to producers and is also a great entry into other personal lines
policies. It is often the
largest single line handled by an agency and, due to the number of claims and
necessary policy
changes, it usually accounts for a large portion of an agent's workload.
LOSS EXPOSURES OF INDIVIDUALS AND FAMILIES
A loss exposure is any condition or situation that presents the possibility of a
financial loss.
The term personal loss exposures mean all loss exposures relating to an
individual or family
unit, including both property and liability loss exposures. Personal loss
exposures exist when
personal resources are subject to causes of loss that might adversely affect an
individual's or a
family's financial condition. All individuals and families face loss exposures.
How they handle
those loss exposures varies according to individual preference, resources,
knowledge, and
often ignorance.
Loss Exposures are usually grouped into two major categories: Property and
Liability. There are two
major automobile exposures for which individuals seek protection. First, people
want protection for
damage to their own automobile should the auto suffer damage in an accident or
other types of
damage, such as fire, theft or vandalism (Property). Second people want to be
protected against
their liability should they injure someone or damage someone else's
automobile (Liability).
courtesy of the sr22 shop insurance exposures
PROPERTY LOSS EXPOSURES
Property losses result when property is destroyed, damaged, stolen, lost, or
otherwise suffers
a decrease in value because of a particular cause of loss (or peril). Property
losses also include
loss of use of the damaged property. A property loss exposure is any condition
or situation that
presents the possibility that a property loss will happen. Property loss
exposures consist of
three elements:
The property exposed to loss
The possible causes of loss
The financial consequences of loss
PROPERTY EXPOSED TO LOSS
Property is any item with value and can be divided into two basic categories:
real property and
personal property.
Real Property
Real property consists of land as well as buildings and other structures
attached to the land or
embedded in it. A family might own several types of real property that give rise
to property loss
exposures. The land on which their home is built, items permanently attached to
it, such as
underground pipes or foundations, and any separate structures on their land,
such as a storage
shed, pool cabana or detached garage, present real property exposures
Other types of real property also create property loss exposures, such as
ownership rights to
common areas of condominium property, (i.e. land, swimming pools, and
recreational areas),
vacation homes or rental properties.
Personal Property
Personal property consists of all tangible or intangible property that is not
real property. For
the purpose of identifying and insuring personal property loss exposures,
personal property can
be divided into the several categories:
Household contents - including furniture, appliances, kitchenware, groceries,
clothing,
sports equipment, tools, and many other items common to the use of a dwelling as
a home.
High-value personal property - items of personal whose value comes from their
unique
characteristics such as silverware, jewelry, furs, antiques, works of art, coin
or stamp
collections, and firearms.
Business personal property - personal property used for business purposes,
such as office
furniture and computer equipment.
Motor vehicles, trailers, watercraft, and aircraft - mobile property typically
excluded (or
covered only up to a certain limit) in policies covering dwellings and their
contents.
In order to keep the cost of insurance reasonable, personal insurance policies
are designed to
cover the loss exposures of the average person or family. If personal policies
included unlimited
coverage on all categories of personal property, insurance for such coverage
would be higher
than most people would be willing to pay. To keep insurance premiums affordable
for the
average consumer, it is fair for those persons who own valuable or unusual items
to pay an
additional premium to insure them.
It is very important, however for agents to explain any limitations or
exclusions for various types
of property, which may exist in the policies they sell. For example, automobile
policies do not
cover personal property items, which are carried in the car, such as luggage.
Homeowners
policies have limits on various types of property such as jewelry, cash, and
property used in
business. Agents must be familiar with the limits and exclusions in the policies
from the various
companies they represent. Be aware that each companys property may include
different
provisions.
CAUSES OF LOSS AFFECTING PROPERTY
A cause of loss (also known as a peril) is the actual means by which property is
damaged or
destroyed. Examples are fire, theft, collision and flood. All types of property
are exposed to
numerous causes of loss, many of which can be insured against, but not all. It
is important to
carefully explain to the insured which perils are automatically covered, which
can be added by
endorsement or written under a separate policy, and which are uninsurable.
FINANCIAL CONSEQUENCES OF PROPERTY LOSSES
When a loss happens to property, an individual or family suffers one or more of
the following
consequences:
Reduction in value of property - the difference between the value of the
property before
the loss and after the loss, such as the cost to repair or replace damaged or
stolen vehicles.
Increased expenses - expenses in addition to normal expenses that are
necessary because
of the loss, such as the cost of renting a vehicle while the damaged vehicle is
being repaired.
Lost income - loss of income that results if property is damaged, such as loss
of rental
income.
A policy may provide some benefits directly to the named insured, such as
medical payments or
recovery for physical damage losses. But most claims for property damage, lost
income, and
"pain and suffering" require a claim against the driver who caused the loss.
LIABILITY LOSS EXPOSURES
A liability loss exposure is any condition or situation that presents the
possibility that a liability
loss could happen. As disastrous as a property loss might be, the amount is
still limited by the
value of the property, which has been damaged. The potential for loss created by
a liability loss
exposure is essentially unlimited since it involves placing a value on the life
of, or injury to,
human beings.
Unfortunately, the legal climate In the United States encourages lawsuits.
Attorneys advertise
for clients enticing them with large potential settlements. Even people who
would not have
previously thought of suing see it as a quick way to make some additional cash.
Individuals
and families face a severe drain on assets from the possibility of being sued or
being held
responsible for injury to someone else.
CIVIL LAW
Claims for liability damages are governed by civil law. Civil law is the body of
law deals with
the rights and duties individual citizens with respect to one another, such as
automobile
accidents. In contrast, criminal law deals with conduct that endangers the
public welfare, such
as the crimes of murder, rape, and theft.
Since criminal acts are generally not the subjects of insurance, civil law
provides the legal
foundation of insurance. Several types of claims fall under civil law, but the
most common ones
involve tort liability, contractual liability, and statutory liability.
Tort Liability
Automobile accident victims have traditionally had to rely on tort law and the
legal liability
system for any awards for injury or damages. Tort liability is liability for
damages caused by one
party (the first party) to another party (the third party). A tort is a wrongful
act, other than crime
or breach of contract, committed by one party against another. Fault, or
negligence, must be
established before recovery can be made. The tort liability system, based on
fault, is the
traditional and most commonly used method in the United States of seeking
compensation for
injured auto accident victims. An individual may face a claim for tort damages
on the basis of
any of the following:
Negligence
Negligence is the most common cause of liability losses. It is usually defined
as acting
differently from the way a reasonably prudent person would act under similar
circumstances.
An individual is negligent when he or she fails to exercise the appropriate
degree of care under
given circumstances. In order to prove negligence, an injured party must prove
that all four
legal elements of negligence have occurred.
1. That the person suspected of negligence owed a legal duty to the person who
was injured
(i.e. Every person has a legal duty to operate their vehicle in a safe manner)
2. That they breached that duty
(i.e. That they failed to do so by speeding, following too close, driving
recklessly, etc.)
3. That actual damages resulted from the breach
(i.e. Repair costs due to collision damage, medical bills and lost wages due to
whiplash,
etc.)
4. That the breach of duty was the Proximate Cause of the damages.
(i.e. That a direct relationship existed between the breach of duty and damages
suffered and
nothing intervened between the time the duty was breached and the damages
resulted)
If someone operates an automobile in a negligent manner that under given
circumstances
results in damage to another's property or in bodily injury to another person,
the operator can be
held legally liable for the damages incurred by the injured person. In order to
avoid legal
liability, owners and operators of automobiles must exercise a high degree of
care to protect
others from harm while operating an automobile.
Intentional Torts
An intentional tort is a deliberate act that causes harm to another person.
Regardless of
whether the harm itself is intended, the intentional act can create liability.
Examples are libel
and slander or intentionally inflicting bodily injury to another.
Absolute Liability
Absolute liability involves the right of recovery in cases involving inherently
dangerous
activities that result in injury or harm to another; liability that does not
involve proving
negligence. For example, if a person keeps a pet tiger in a cage in his back
yard and the tiger
bites a neighbor. The owner of the tiger could be held liable whether or not
negligence can be
proved. Owners of dangerous animals are typically held liable for injuries that
the animals cause
regardless of how carefully the owners confine them.
Contractual Liability
Contractual liability is liability assumed under any contract or agreement. The
possibility of
contractual liability arises when an individual enters into a contract or
agreement. Leases for
homes and apartments, as well as rental agreements for autos, power tools, and
other
equipment, typically contain provisions that transfer the financial consequences
of liability losses
from the owner of the property to the renter.
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Statutory Liability
Statutory liability is liability imposed because of a statute or law. Usually it
is not necessary for
the injured person to prove negligence. If the law is broken, and damage to
another occurred, it
is presumed that the person who violated the law is at fault. For example, if an
accident occurs
in which the insured is intoxicated, they will probably be considered at fault.
Most important to individuals and families are the laws dealing with liability
arising out of
automobile accidents. Laws vary by state and motorists should know the laws that
apply in the
state, or states, in which they live and operate motor vehicles.
THE TWO ELEMENTS OF LIABILITY LOSS EXPOSURES
Regardless of the type of liability alleged, the second element of a liability
loss exposure
involves the possibility that the injured party will make a claim for damages
against the insured.
Possibility of a Claim for Money Damages
A liability loss exposure involves the possibility that one party, claiming
injury or damage, will
bring a claim for money damages against another party allegedly at fault for the
injury or
damage. A liability loss results when a claim for money damages is actually
made.
Financial Consequences of Liability Losses
When a liability claim occurs, an individual or family can suffer two major
financial
consequences:
Costs of investigation and defense
Money damages awarded if the defense is not successful (or if the claim is
settled out of
court)
If one driver is liable for an accident, then the other party may be entitled to
compensation for
injuries or damage or both. Compensation may include both Economic Damages, also
called
Tangible Damages, such as out-of-pocket medical expenses, lost wages and the
cost to repair
a damaged vehicle, as well as Non-economic Damages, also called Intangible
Damages,
such as pain and suffering or mental anguish.
Unlike most property loss exposures, liability loss exposures put all of an
individual's financial
resources at risk of loss. When a court orders an individual to pay liability
damages, the amount
of the damages is based on the loss the injured party suffers, not with the
financial resources of
the party at fault or their ability to pay the damages. As a result, all of an
individual's or family's
savings and property are exposed to loss. The fact that all of an individual's
assets, plus his or
her future income, may be required to pay for liability damages makes insurance
for liability
losses a necessity.
Tremendous sums are often awarded in bodily injury liability cases. When we
damage another
car, our liability might be limited to the value of the vehicle. But if we
injure a person, causing a
permanent disability and pain and suffering, a court could award millions of
dollars in damages.
Many liability claims are settled before they reach court. The parties to the
claim negotiate the
amount paid in damages, and the costs of investigation and defense are usually
reduced. Since
settling out of court is usually less expensive than going through a potentially
long trial,
insurance companies often try to reach out-of-court settlements.
LEGAL LIABILITY LAWS & THE AUTOMOBILE
Automobile liability insurance is one of the most important automobile insurance
coverages.
The potential legal liability exposure of drivers and owners far exceeds the
risk of loss or
damage to the automobile itself. A loss because of theft of an entire automobile
cannot exceed
the value of the automobile, but a judgment for injuries and damages because of
an accident
could easily amount to hundreds of thousands of dollars, and even exceed $1
million.
Because US society is built on the easy access to automobiles, resulting in a
high potential for
liability, many laws, statutes, and ordinances have been enacted to address the
responsibility of
owning an auto. Auto statutes and regulations can vary widely by state. Be
certain you are
familiar with the provisions of the states in which you sell personal automobile
insurance.
These statutes modify some of the common-law concepts of negligence and place
specific
obligations and responsibilities on the owners and operators of motor vehicles.
Following are
some of the more important statutes and regulations relating to automobile
liability that every
producer should know.
Contributory Negligence
A few states have contributory negligence laws that make it difficult for an
accident victim to
collect damages. Under contributory negligence, when both parties to an
automobile accident
are negligent, each party must bear its own damages. If a person contributes in
any way to his
or her own injury, that person cannot recover damages. For example, if two cars
are involved
in an accident and one car was speeding and the other car ran a red light,
neither driver would
be able to collect from the other party.
Contributory negligence rules currently exist in six states, Alabama, Idaho,
Maryland, North
Carolina, South Dakota, Virginia, and the District of Columbia.
Comparative Negligence
Because of the harshness of contributory negligence laws, most states have
enacted some type
of comparative negligence law that allows injured persons to recover damages
even though
they might have contributed to the accident. Although comparative negligence
laws vary by
state, they all share the common element that negligence on the part of the
injured party does
not necessarily prevent recovery for damages.
Under a comparative negligence law, if both the injured person and the other
driver are
negligent, the relative negligence of each party is determined, and a percentage
of blame is
assessed to each. Under the most common version of the comparative negligence
rule, the
damages recoverable by the plaintiff are reduced by the percentage of the
plaintiff's contribution
to the accident. For example, if the plaintiff were judged to be 20 percent
responsible, the
plaintiff would recover only 80 percent of damages arising out of the accident.
In this way a
driver who is partially at fault can still collect partially from another driver
who was more at fault.
Guest Statutes
In most states, a driver owes the "reasonable and prudent" standard of care to
guests in their
vehicle. However, guest statutes, which modify the common-law doctrine of
negligence by
altering the standard of care a driver owes a guest in the auto, in five states
(Alabama, Idaho,
Illinois, Nebraska, and Texas). The extent of these laws varies by state.
Producers and
insureds must be familiar with how the laws in the states in which they operate
affect their
responsibility for injuries to passengers.
In order for a driver to be held responsible for injury to guests in states in
which a guest statute
exists, the driver must be held responsible for "willful and wanton misconduct,"
"gross
negligence," or some other such conduct, for example if a driver is intoxicated.
As a result, it
becomes extremely difficult for a guest to pursue an action against the driver.
Guest statutes
apply only to guests. A fare-paying passenger in a taxi or bus would not be
considered a guest.
Vicarious Liability
The person who negligently operates a motor vehicle is typically held
responsible for resulting
injury and damage. However, some states have passed vicarious liability statutes
under which
the owner is held liable for the negligent operation of a car driven with the
owner's permission or
if the driver is acting as an agent for the owner at the time of the accident
even when the owner
is not in the automobile.
The most common situation involving vicarious liability are parents who are held
liable for the
operation of motor vehicles by their minor children, and employers who are held
liable for
negligent acts of their employees during the performance of their job. The
person who is held
liable vicariously does not even have to be near the scene of the accident to or
to have any
personal involvement in the incident to be held responsible for damages
incurred.
TORT REFORM
The number and size of third party claims presented to insurance companies, and
defended and
contested, have increased steadily over the years. A victim usually has to share
a good portion
of a settlement with an attorney. Tort reform is the process of changing
legislation in a way
that reduces legal costs or settlement awards resulting from negligence
lawsuits. The tort
liability system has come under attack by critics in recent years, arguing that
this system is
unfair and has many defects.
By the end of the 1960s, critics were charging that the entire system suffered
from deficiencies
that added to insurance costs and delayed payment to victims when they needed it
most. Many
people believe that a new system is needed for compensating auto accident
victims. One type
of tort reform that several states have proposed and enacted is no-fault
insurance, which will be
discussed in a later section in this text.
sr22 shop
Risk management is the process of making and carrying out decisions that will
decrease the
adverse effects of potential losses. Personal risk management is the application
of the risk
management process to the exposures of individuals or families. Risk management
helps
people identify loss exposures and decide how to protect against potential
losses before they
happen. Families and individuals who engage in risk management can minimize
worry and
ease the harmful effects of a loss.
BASICS OF PERSONAL RISK MANAGEMENT
The typical individual or family does not pay much attention to personal risk
management.
Personal risk management is often unplanned and unintentional. Most individuals
and families
consider insurance as the only way to handle their loss exposures and to expect
insurance to
take care of all their exposures for them. They are not likely to identify all
their loss exposures,
study alternative risk management techniques, or select and implement other
techniques. They
are even less likely to monitor and revise their decisions. Large corporations
are far more likely
to have a formal risk management program than are families.
RISK MANAGEMENT AND THE INSURANCE AGENT
Many customers expect their insurance agent or company representative to serve
as their risk
manager. Although trained insurance personnel can help clients identify their
loss exposures
and suggest appropriate insurance coverages, customers should make their own
coverage
decisions. Insurance professionals should offer customers several optional
coverages and
limits and then let the client choose the ones they want and can afford.
Insurance personnel can become involved in errors and omissions (E&O) claims if
they act as
risk managers for their clients. Errors and omissions (E&O) are negligent acts
(errors) or failure
to act (omission) committed by a person in the conduct of the insurance business
that give rise
to legal liability for damages. Customers who think that an insurance
professional gave them
misleading or incorrect advice might bring an E&O claim against the insurance
agency or
company they believe to be responsible. sr-22 shop
There are also several advantages to the producer who assists his or her clients
to develop a
good risk management program:
It necessitates account selling and leads to larger premiums;
the account becomes less vulnerable to takeover by a competitor because the
producer
handles all of a family's insurance coverages; account retention is increased;
and
the producer has the satisfaction of knowing that the client is being well
served.
Insurance personnel can help a client identify loss exposures and can suggest
appropriate
insurance coverages, but they should not select coverages for the customer, or
they might
become involved in errors and omissions (E&O) claims. Although insurance is one
effective risk
management technique, it is certainly not the only one. Agents must consider
other risk
management techniques that might be used instead of, or in combination with,
insurance.
HOW A PERSONAL RISK MANAGEMENT PROGRAM WORKS
Personal risk management involves the following steps:
Identifying and analyzing loss exposures
Examining possible risk management techniques
Choosing the appropriate techniques
Implementing the chosen techniques
Monitoring and revising the plan
Good risk management means addressing all exposures. First, a family needs to
identify and
analyze their property loss exposures. They should also list their personal
activities that could
cause liability claims. The use of a risk management tool such as a
questionnaire or checklist
can help to generate the information needed to recommend the personal auto
coverages that
the producer believes will best protect the insured.
INSURANCE AS A RISK MANAGEMENT TECHNIQUE
One risk management technique is insurance. Insurance is an excellent risk
management
technique for individuals and families, as long as personal insurance clients
understand that
insurance will not cover all their loss exposures and that they must choose
other techniques as
well. Personal insurance can protect against many typical loss exposures the
average person
or family faces. Unfortunately, many individuals think insurance is the only
technique available
to handle loss exposures, and they do not explore other possibilities. They
might also think that
insurance should cover all losses, no matter what the cause or the
circumstances.
OTHER TECHNIQUES TO TREAT LOSS EXPOSURES
In addition to insurance, the following are typical risk management techniques
that an individual
or family should consider:
Avoidance
Loss control
Non-insurance transfer
Retention
Avoidance
Avoidance involves not participating in an activity or not owning an object that
might give rise to
losses in the future. For example not owning a car or getting rid of one you
currently own.
Unfortunately, avoidance is not practical for most personal exposures since in
avoiding the
exposures, you must also avoid the enjoyment and/or income derived from the
thing avoided.
For example, if a family chooses not to purchase a vehicle, they might still
have auto exposures
from renting or borrowing vehicles or as a passenger in anothers car or as a
pedestrian.
Loss Control
Loss control is one of the most important and most overlooked personal risk
management
techniques. Controlling loss exposures involves both loss prevention and loss
reduction.
Loss prevention measures seek to control the frequency of losses, to prevent
losses, or at
least keep them from happening as often. (i.e. anti-lock brakes, car theft
alarms)
Loss reduction measures seek to control the severity of losses that do occur.
Loss
reduction cannot prevent losses, but it can help to reduce the dollar amount of
losses that
occur. (i.e. airbags, seat belts, shock absorbing bumpers)
Noninsurance Transfer
A noninsurance transfer is the act of transferring loss exposures from one party
to another
party that is not an insurance company. Individuals can transfer the potential
consequences of
a loss exposure to another party by contract such as a lease or rental
agreement. Persons who
assume a transfer of exposure usually cover the exposure with insurance.
Retention
Retention means drawing on the financial resources of an individual or family to
pay for part or
all of the consequences of a particular loss exposure. If individuals or
families do not transfer
their loss exposures to an insurance company or to anyone else, they retain
their losses (either
intentionally or unintentionally) and must pay for such losses with their own
resources.
PERSONAL INSURANCE POLICIES
Personal insurance is a subject that affects all of us - not only in our
professional lives, but
also in our personal lives. Without insurance, most of us could not purchase our
homes, finance
our cars, pay our hospital and medical bills, or handle unexpected financial
emergencies.
WHAT IS AN INSURANCE POLICY?
An Insurance policy is a written agreement between two "parties." One party is
the insured
person, and the other party is the insurer (the insurance company). An insurance
policy is also a
legally binding contract. As with all contracts, an insurance policy describes
the rights and
obligations of each party. In addition, the policy identifies how much the
insured must pay to
receive those rights (the "premium.") The policy also identifies how much the
insurance
company is obligated to pay if certain events occur (the "limits of insurance.")
TYPES OF PERSONAL INSURANCE POLICIES
Personal insurance consists of the insurance coverages designed to cover loss
exposures of
individuals and families. Personal insurance policies are designed to transfer
the financial
consequences of many personal loss exposures from individuals and families to
insurance
companies. Although personal insurance policies meet the needs of most
customers, no policy
covers every potential loss exposure.
Personal insurance policies are often standardized and are usually written as a
package policy,
combining property and liability coverages in one policy. Examples of package
policies are the
homeowners policy and the personal auto policy.
This text examines one of the many policies used to insure loss exposures for
individuals and
families: the personal auto policy (PAP). Some of the other policies that
provide important
protection include:
Homeowners policy
Dwelling policy
Mobile home insurance
Farm insurance
Flood insurance
Inland marine insurance
PERSONAL AUTO POLICY
Automobile insurance is the largest line, in terms of premium volume, in the
property and liability
insurance field. As such, it is a major source of commission income for
producers.
Consequently automobile insurance is often the key to individual and family
insurance accounts.
A car is likely to be the first major possession that most people acquire, and
automobile
insurance is usually their first property and liability insurance purchase. The
producer who
successfully handles an insured's automobile insurance needs satisfactorily will
probably write
the insured's homeowners as well as other coverages.
The personal auto policy (PAP), a simplified language policy, is intended to
provide all of the
automobile insurance protection needed by the vast majority of Americans. It
consists of the
Declarations, Insuring Agreement, and Definitions, as well as several parts that
describe
specific coverages such as liability coverage, medical payments, uninsured
motorist coverage,
coverage for damage to your auto, and duties after an accident or loss.
Automobile insurance policies are primarily "third party" contracts. Under a
"third party"
contract, the insurer agrees to pay on behalf of an insured for damages that the
insured is
legally responsible to third parties. The PAP also includes first party
coverage to reimburse
the insured directly for damages to, or theft of, the vehicle itself and/or its
equipment.
In conjunction with the many endorsements that can be attached to it, the PAP
can be used to
insure passenger cars, trailers, pickup trucks, vans, motorcycles, golf carts,
snowmobiles, and
other motor vehicles not used for business purposes. To be eligible for coverage
under the
personal auto policy, the vehicle to be insured must be owned, or leased for at
least six months,
by an individual or married couple.
As you can imagine, not all vehicles and owners are exposed to the same type of
losses and so
not all owners require the same type or amount of coverage. An insured's choice
of which
coverages to purchase is influenced by:
Coverages which must be purchased because of state law
Coverages which the insured truly needs or wants
The premium cost for optional coverages
PERSONAL AUTO INSURANCE POLICY MODERNIZATION
At one time the Basic Automobile Policy (BAP) was used to insure almost all
types of personal and
commercial vehicles. During the 1950s, the Family Automobile Policy (FAP) and
Special Automobile
Policy (SAP) were introduced. The BAP was used most extensively in the
commercial area as time
went on. The FAP provided broad coverage for private passenger and utility
vehicles owned by
individuals, and it became the predominant personal lines auto policy for two
decades. The SAP was
an economy package, which was not as broad as the FAP.
The Personal Auto Policy (PAP) was introduced in 1977. It is designed to be easy
to read and
understand. Highly technical terms have been eliminated, and simple definitions
and short
sentences are used throughout the policy. The PAP contains only about half as
many words as the
family policy did, but it provides essentially the same coverages. The result is
that the PAP is easier
to understand than earlier versions of personal automobile policies.
The PAP has been revised several times since it was introduced. The following
discussion is
based on the 1994 edition of the standard PAP. Be aware that many companies use
other
variations of the personal auto policy and that the PAP has been amended in many
states to
conform to state laws.
ELIGIBLE VEHICLES
Types of Eligible Vehicles
The PAP is designed to insure 4 wheel private passenger autos, as well as pickup
trucks and
full-size vans, subject to certain restrictions.
Private passenger autos include vehicles such as cars, vans, station wagons,
and sport utility
vehicles designed primarily for use on public roads.
Coverage for pickups and vans is available only if their gross vehicle weight
(GVW) is less
than 10,000 pounds. In addition, the pickup or van must not be used to transport
or deliver
goods and materials unless such use is for farming or ranching or is incidental
to an insured's
business of installing, maintaining, or repairing furnishings or equipment.
The PAP can also be endorsed, if allowed by the state and the insurer, to cover
motorcycles,
golf carts, snowmobiles, and similar vehicles by adding an appropriate
endorsement to the
policy. Vehicles rented to others, or used to carry passengers for a fee, are
ineligible for
coverage under a personal auto policy.
Ownership Rules
To be eligible, a vehicle must be owned or leased under contract for a minimum
period of 6
consecutive months by one of the following:
An individual
Fill
out our INSTANT online SR22 rates comparison form
( It takes only 2-3 minutes.)
If
the pricing is acceptable to you call us toll free at 1-866-872-4689
and we will confirm the SR-22 filing price
If
the SR22 package is acceptable to you we will fill out your
application over the phone and FAX or EMAIL the application for your
signature. You sign and return, and in 5 minutes you will have an
sr22 filing and ID cards for your vehicle in your email box or on
your fax machine!