(Referred to in some policies as “Part E”) As there are duties of an insurance company to provide services or funds under stipulated conditions, there are duties of the insured also. Even though the greatest majority of policyholders never read their policies, they would automatically perform most of these duties, as again, common sense applies.
The insurer must be notified promptly as to how, when and where the accident or loss happened. One cannot assume that the police report will suffice as notification to the insurer, or that the other driver will file a report with their company who will then notify all other insurers involved. The original notice should contain as much information as possible, including the names and addresses of the other parties, whether injured or not, and of any witnesses. Normally, insured’s call their agents and ask them what to do, but the phone call by itself is not sufficient for an insurer to take the appropriate action.
The insured must cooperate with the insurance company during all stages of the claim, during investigation, settlement or through the defense procedures of any claim or suit. Any legal papers received by the insured must be sent promptly to the insured.
The insured (or driver, if family member) may be required to take a physical examination by designated doctors (paid for by the insurer), and possibly, to be required to submit to an examination under oath.
The insured must authorize the insurance company to receive copies of medical reports and any other pertinent records, and to complete any “Proof of Loss” when required by the insurer.
If a person is seeking Uninsured Motorists Coverage, they must promptly notify the police if a hit-and-run driver is involved, and if a suit is brought, they must send those papers directly to the insurer. The police need to be quickly informed as there is a possibility of criminal charges being filed as a hit-and-run.
If an insured (or family member) is seeking coverage for damage to the insured automobile, they must take reasonable steps after loss to prevent any further loss of the auto or equipment. Example: If a car is burglarized through a broken window, the window must be repaired or other steps taken so that other equipment gained by access through the window, does not become stolen. If the car is stolen, the police must be promptly notified.
The insurance company reserves the right to inspect and appraise the damaged property before it is repaired or disposed of.
CONSUMER APPLICATION
Doug leaves his car in the mall parking lot while shopping for a birthday present for his wife. When he returns to his car, he sees that someone had “keyed” the car (i.e., dragged a car key or other sharp instrument down the side of the car). Doug asks everyone he sees if they knew who did it to his new car, but was unable to find the culprit.
The next day he calls his brother’s body shop for an estimate to repaint the car. The estimate seems reasonable, so he authorizes his brother to paint the car. The paint job was perfect, so Doug send the bill to his insurance company.
Doug’s insurance company does not have to pay the bill, because:
(1) Doug did not notify the police about the vandalism. Even though that may not be “required” under his contract, it would support his claim of vandalism, and
(2) Doug should not have had his car painted without having an adjuster or appraiser from the insurance company look at the car first.
We have no duty to provide coverage under this policy unless there has been full compliance with the following duties:
A. We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses.
B. A person seeking any coverage must:
1. Cooperate with us in the investigation, settlement or defense of any claim or suit.
2. Promptly send us copies of any notices or legal papers received in connection with the accident or loss.
3. Submit, as often as we reasonably require:
a. to physical exams by physicians we select. We will pay for these exams.
b. to examination under oath and subscribe the same.
4. Authorize us to obtain:
a. medical reports, and
b. other pertinent records.
5. Submit a proof of loss when required by us.
C. A person seeking Uninsured Motorists Coverage must also:
1. Promptly notify the police if a hit‑and‑run driver is involved.
2. Promptly send us copies of the legal papers if a suit is brought.
D. A person seeking Coverage for Damage to Your Auto must also:
1. Take reasonable steps after loss to protect your covered auto or any non‑owned auto and their equipment from further loss. We will pay reasonable expenses incurred to do this.
2. Promptly notify the police if your covered auto or any non‑owned auto is stolen.
3. Permit us to inspect and appraise the damaged property before its repair or disposal.
STUDY QUESTIONS
1. In case of an accident or loss covered by a PAP, the insured must
A. promptly notify the insurance company.
B. let the police department file the report with the insurance company.
C. notify the Department of insurance first.
D. call his attorney.
2. The insured is required to cooperate with the insurance company
A. only during the investigative stage.
B. during the settlement stage only.
C. during all states of the claim.
D. only during the defense procedures of any claim or lawsuit.
3. Bill wrecked his car. The other driver insisted that Bill was totally at fault, and referred to Bill as an “Elderly Gentleman.” The insurance company wants Bill to take a physical examination to show what his physical condition actually is.
A. Bill does not have to take such physical according to the policy.
B. The only time that an insured must take a physical exam is if the court demands it.
C. Under the provisions of the policy, Bill must take the examination.
D. An insurance company cannot require this of any person as it is in violation of their privacy.
4. Bill’s insurer also wants copies of his medical records from Dr. Jones, his family doctor.
A. An insurer cannot require anyone to turn over private medical records.
B. Under the laws of most states, a person involved in an accident must automatically turn over their medical records to the court.
C. Under the provisions of the policy, Bill must also turn over any medical records from Dr. Jones.
D. Dr. Jones would never turn over any personal medical records to any person, authorization or not.
5. Cecil was hit by a hit-and-run driver. He has uninsured motorists coverage.
A. He must notify the police department immediately, and let them contact the insurer.
B. He must call his insurance agent and the agent should call the police.
C. He must file a claim immediately with the State Department of Insurance.
D. He must notify the police immediately, and if a suit is brought, notify the insurer.
6. Jim’s stereo was stolen from his car by the thief entering through a broken window. Because severe storms were forecast, Jim covered the window with plastic as soon as he discovered it was broken.
A. Jim must not touch the car if it has been burglarized, until the appraiser has looked at it.
B. Jim is required to take reasonable steps to avoid any further loss of the auto or equipment.
C. It is illegal to cover a broken window in a vehicle that has burglarized.
D. Jim must take the vehicle immediately to a professional shop to have the window fixed.
7. An insured is required to file a claim with their insurer in case of an accident. What information is NOT necessary to state in the report?
A. The date of the accident.
B. The time of the accident.
C. The names and addresses of all persons involved in the accident.
D. The name and address and license number of the insurance agent.
8. Bill car was struck at a red light by a car that ran the red light. There were no witnesses, and both drivers insist that they had the green light. In an effort to determine how liable Bill was, if at all, his insurance company could
A. require Bill to take a lie detector test.
B. pay the total damages out of his own pocket, and then he would be reimbursed if the other
party is discovered as lying.
C. require Bill to make a statement under oath.
D. refuse to take any action at all, even in a no-fault state.
9. Sonja was involved in an auto accident at a 4-way stop sign. The other driver insists that Sonja did not have the right-of-way, and is suing Sonja. Sonja’s boyfriend is an attorney and in an attempt to impress Sonja, he told her to let him handle it. After about 60 days, he and Sonja “broke-up”, and he told Sonja he wouldn’t do anything about the accident.
A. Sonja’s insurance company would have to settle the claim anyway.
B. Sonja’s insurance does not have to pay the claim as she was in violation of the provision that
instructs the insured to PROMPTLY send notice of suit to the insurer.
C. Sonja’s insurance company is restricted by law from taking any action whatsoever, either
against Sonja or in respects to the lawsuit.
D. The boyfriend’s auto insurance policy would have to settle the claim.
10. In the situation in Question 9 above, Sonja’s insurance company notifies Sonja that they have received the claims papers and will take “appropriate action.”
A. The insurer will immediately take action to prevent or defend the lawsuit.
B. The insurer MAY take action to prevent or defend the lawsuit.
C. The insurer, by sending notice that they have received the papers, must now take all action
that it ordinarily would have taken if they had been notified immediately of the suit.
D. Sonja’s insurance company will probably automatically cancel her insurance.
ANSWERS TO STUDY QUESTIONS
1A 2C 3C 4C 5D 6B 7D 8C 9B 10B