05.03. PAP Part F - General Provisions

  1. Part F - Bankruptcy of Insured
    if insured declares bankruptcy or becomes insolvent, the insurer isn't relieved of its obligations under the policy
  2. Part F - Changes to the Policy
    • changes that can affect premium are
    • number, type, use of insured vehicles
    • operators using insured vehicles
    • place of principal garaging
    • coverage provided, deductibles, limits
    • liberalization clause: automatically provides broadened coverage if insurer changes PAP w/o premium modification, except if changes both broaden and restrict at the same time
  3. Part F - Legal Action Against the Insurer
    • no legal action can be brought against the insurer until the insured has fully complied with all policy terms
    • under Part A, no legal action can be brought against the insurer unless the insurer agrees in writing that the insured has an obligation to pay damages or the amount of the insurer's obligation has been finally determined
  4. Part F - Insurer's Right to Recover Payment
    • must cooperate with insurer to preserve his subrogation rights
    • not applicable to PD
    • if insured recovered from insurer and then from third party, must hold funds in trust and reimburse insurer
  5. Part F - Termination
    • state law restricts insurer's ability to cancel or nonrenew
    • state law often departs from PAP recommendations
    • state law is incorporated by endorsement
    • state law always supersedes policy provisions
  6. Part F - 4 parts of termination provision
    • cancellation: anytime for the insured, limited for the insurer (can duringĀ firstĀ 60 days of nonrenewal policy; nonpayment = 10 days notice, otherwise 20 days notice) on only 3 reasons (1) nonpayment (2) suspended drivers license (3) misrepresentation
    • nonrenewal: 20 days notice
    • automatic termination: insured fails to accept renewal; insured obtains replacement coverage
    • other provisions: proof of notice, premium refund, end of coverage
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05.03. PAP Part F - General Provisions
General Provisions