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

10/27/2014

1

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Massachusetts Personal Auto

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

Vice President of Technical AffairsMassachusetts Association of Insurance Agents

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?

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.”

ABSOLUTELY

Buying another vehicle

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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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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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What COVERAGE does a replacement vehicle get…

The MAP doesn’t discuss this…

Historically, a replacement vehicle gets the coverage ofthe 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 discussionBEFORE a loss

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The policy lasts longer than the plate …

7 day law for transfer of vehicles with RMV


Regarding the registration process for the transfer

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.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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Regarding the registration process for the transfer 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.

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


Regarding the registration process for the transfer 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.

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


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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 ….


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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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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

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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 revocationordoesn’t have a current legal right to drive such as foreigner who has been her over 1 year …orsomeone 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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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.

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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.


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 ..

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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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.

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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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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.

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

Cancelling coverage

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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

The policy doesn’t really allow cancellation the day after the totaled vehicle claim unless the insured had turned the plate in.

Cancelling coverage

What date do I cancel the insurance on a vehicle that was totaled and there was another vehicle was on policy. I wanted to cancel it the day after the loss and the carrier wouldn’t let meAgain, 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

Cancelling coverage

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What date do I cancel the insurance on a vehicle that was totaled 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

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

What date do I cancel the insurance on a vehicle that was totaled 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

Though …if insured DOESN’T get around to turning plate in …the company does NOT have to return premium

Cancelling coverage

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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.

Valuing Total loss claim

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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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 endorsementShould be on every policy – it introduces standards of repair regulation language to the policy

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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:

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.

3. Anyone who is entitled to benefits under any workers’ compensation law for the same injury.

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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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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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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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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.

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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 facts3) any other endorsement change you the insured makes

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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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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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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 limitGeneral provision 15 states:

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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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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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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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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 non-renewal ... 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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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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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!

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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.

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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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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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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.

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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.

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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.

DanDaniel J. Foley, Jr.,Esq.

10/27/2014

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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.

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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.

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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.

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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?

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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.

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