Personal Auto Policy Revisions
Insurance Services Office, Inc. (ISO) is an acknowledged leader in writing policy language to cover property and liability risks. ISO recently released a revised personal auto policy that becomes effective on September 1, 2018.
This revised policy, and the accompanying endorsements, has been specifically crafted to provide for several emerging issues such as keyless entry and flying cars, and it also allows for some higher limits in areas where prices may be rising. These changes were worded specifically to make sure that both the insured and the insurer are protected to the fullest intent of the policy. The following discussion highlights some of the more important changes that ISO enacted in the 2018 version of the Personal Auto Policy (PAP).
Defining coverage options
ISO is awarding altruistic behavior by enacting changes to the public or livery conveyance exclusion, to incorporate an exception to the exclusion for coverage when the insured owns or operates a vehicle or a “your covered auto” while it is being used for volunteer or charitable purposes. This change broadens coverage by allowing an insured to recover for damages that occur while they are using their vehicle for good. The definition of “transportation network platform” used to be included in an endorsement and is now included in the PAP.
We’ve been saying it for decades “where’s my flying car?” The authors of the new version of the PAP have determined that the looming issue of flying cars is becoming too close for their comfort, so they added in a Flying Car Exclusion. The exclusion specifically addresses that there are some unique and unforeseeable risks associated with the emergence of flying cars or roadable aircrafts. The manual indicates that a specialty policy provides better coverage for these vehicles.
Previously the PAP allowed for a basic limit of liability for transportation expenses of $20 per day and up to $600. The authors of the form have determined that inflation and other market influences affect transportation expenses, so they have raised that limit to $30 per day with a maximum limit of $900 per day. The $30 per day limit is generally supported by current trends in the U.S. car rental market.
The new form changes the duties of the insured, now requiring the insured to submit, as often as reasonably required, to recorded statements. This provision has been included in order to help insurers gather information about an insured’s claim. A recorded statement may be taken at a time convenient for both parties; over the phone; allows for increased flexibility, transparency and accountability on behalf of both parties; and could potentially lead to lowered premiums if the increase in insureds’ accountability leads to a decrease in insurance fraud.
We all know how much of a pain it is to lose the key fob to the car, particularly when a replacement costs – on average – about $200. The PAP has a new endorsement allowing for replacement of a key fob if it is lost or stolen and, on a per-vehicle basis, will pay for reasonable expenses incurred for services to access a covered car if the key or key fob for that vehicle is lost or stolen.
With an increasing number of people considering their pets as their “starter children,” the new PAP is very on-trend with its new Pet Injury Coverage endorsement. If an insured is involved in an accident with the family dog in the front seat, the endorsement will provide veterinary expenses or services incurred as a result of bodily injury to the pet. This coverage only applies if at least one covered car is insured for Other Than Collision and Collision Coverages, and the pet is inside a covered car at the time of the loss or injury.
Another new endorsement to the PAP is the Child Restraint System Coverage Endorsement. Car seats can be expensive, and the National Highway Traffic Safety Administration recommends that they be replaced after a collision. With the new ISO endorsement, the replacement cost of a child restraint system would be covered, without a premium payment, in the event of an accident.
These are just the highlights of the newly revised personal auto form. As always, a thorough reading of the form and accompanying manual is necessary to fully understand the changes in coverage, but this article highlights specific areas of interest.