Insurance Policies and Regulations Flashcards

Under a standard personal auto policy appraisal clause, if the two appraisers cannot agree on the amount of loss, what happens next?

Answer: The differences are submitted to an umpire

The appraisal clause has each party pick an appraiser, and any disagreements go to a neutral umpire; a decision agreed by any two of the three is binding.

Who typically pays for the umpire in an auto policy appraisal process?

Answer: The insured and the insurer share the cost equally

Each party pays its own appraiser and the umpire's cost is usually split equally.

What does the appraisal clause in an auto policy generally resolve?

Answer: Disputes over the amount of loss

Appraisal settles disagreements about the value or amount of the loss, not coverage or liability questions.

Which first-party coverage pays for damage to the insured's vehicle from hail, theft, or hitting a deer?

Answer: Comprehensive (other than collision)

Comprehensive (other than collision) covers non-collision losses such as hail, theft, fire, vandalism, and animal strikes.

In most states, contact with an animal such as a deer is classified under which coverage?

Answer: Comprehensive

Standard personal auto policies list contact with a bird or animal as a comprehensive loss.

What is the term for an insurer's right to recover what it paid on a claim from the at-fault third party?

Answer: Subrogation

Subrogation lets the insurer step into the insured's shoes and recover what it paid from the party responsible.

When a lender is listed as loss payee on an auto policy, how is a total loss settlement usually paid?

Answer: Jointly to the insured and the lienholder, or to the lienholder up to the loan balance

A loss payee clause protects the lienholder's interest, so payment goes to the lender up to the payoff amount or is made jointly.