8.3 Liability Exclusion Copy

Topic Progress: http://adjustercourses.com/lessons/chapter-8-texas-personal-auto-policy/

LIABILITY EXCLUSIONS

The exclusions section of the liability part of the PAP contains a total of 13 exclusions, divided into paragraph A and paragraph B. Paragraph A deals with excluding liability Coverage for “any insured” under certain circumstances. Paragraph B deals with excluding liability coverage for the “ownership, maintenance, or use of” certain types of vehicles.

Exclusion 1 of paragraph A deals with liability coverage for any insured who “intentionally causes” bodily injury or property. This exclusion reinforces the stipulation in the liability insuring agreement that damages for BI or PD must result from an auto accident.
Exclusion 2 denies liability coverage for any insured for property damage to property owned or being transported by that insured.
Exclusion 3 is the PAP’s version of the care, custody, or control exclusion. The PAP will not provide liability coverage for any insured for property damage to property rented to, used by, or in the care of that insured.
Exclusion 4 applies to liability coverage for any insured for bodily injury to an employee of that insured; the exclusion does not apply to BI to a domestic employee unless workers compensation benefits are required or available for that domestic employee.
Exclusion 5 deals with liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. The intention of this exclusion is to deny coverage in those situations where it is obvious that the insured is holding the vehicle out for hire to the general public. This exclusion is not meant to apply to instances such as using a private passenger auto for deliveries of pizza or newspapers.
Exclusion 6 is for any insured while employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking vehicles designed for use mainly on public highways. This exclusion does not apply to the ownership, maintenance, or use of the ‘covered auto by the named insured, any family member, or any partner, agent, or employee of the named insured or any family member.
Exclusion 7 is for any insured maintaining or using any vehicle while that insured is employed or otherwise engaged in any business not described in exclusion 6. Exclusion 7 does not apply to the maintenance or use of a private passenger auto, a pickup or van, or to a trailer used with such vehicles.
Exclusion 8 precludes liability coverage for any insured using a vehicle without a reasonable belief that that insured is entitled to do so; the exception is for a family member using the named insured’s covered auto owned by the named insured.
In the last exclusion under paragraph A, there is no liability coverage for any insured for BIor PD for which that insured is an insured (or would be an insured) under a nuclear energy liability policy.

The first exclusion is for any vehicle that has fewer than four wheels or is designed mainly for use off public roads; the exceptions are for when such vehicles are being used by an insured in a medical emergency, or if such vehicles are trailers or non-owned golf carts. Vehicles such as motorcycles or dune buggies should not be considered as autos, nor automatically insured as autos under the personal auto policy.

The exceptions to the exclusion are bikes and dirt bikes and motorcycles used for recreational and fitness purposes. Also, if the insured is driving a (non-owned) golf cart on the course and hits someone with the cart, it helps to know that the PAP will apply to a claim against the insured.

Exclusion 2 is for any vehicle, other than the named insured’s covered auto that is owned by the named insured or furnished or available for the named insured’s regular use.

Exclusion 3 applies to vehicles owned by or furnished or available for the regular use of any family member; an exception exists for the named insured while maintaining or occupying such vehicles.

The use of the word “occupying” is an exception to exclusion 3. By doing this, the insurer; requiring the named insured to physically be in or upon the vehicle in question in order for the exception to take

Exclusion 4 in paragraph B is for any vehicle, located inside a facility designed for racing, for the purpose of competing in or practicing or preparing for any prearranged or organized racing or speed contest.

Medical Payments – Part B1

The medical payments section (part B1) of the personal auto policy (PAP) covers medical and funeral expenses that result from an auto accident. The policy covers these expenses-for services rendered-if the expenses are incurred within three years of the accident date.

The policy covers these expenses for the named insured and family if they are injured while occupying a motor vehicle that is “designed for use mainly on public roads.” It also covers the named insured and family when struck as pedestrians. Finally, it covers these expenses for other people while occupying the named insured’s car.

Part B covers these expenses regardless of fault. It simply agrees to pay any medical and funeral expenses that the insured incurs as a result of an auto accident.

It simply agrees to pay any medical and funeral expenses that the insured incurs as a result of an auto accident.

Medical Payment Exclusions

There are certain exclusions that apply to the medical payments section of the PAP.

The first exclusion eliminates coverage for the insured when occupying a vehicle with fewer than four wheels-thus no coverage while operating or riding on a motorcycle.
The second exclusion removes coverage while the covered auto is being used as a “public or livery conveyance.” The policy makes a specific exception for vehicles used in a carpool arrangement.
The next exclusion removes medical pay coverage for injuries the insured sustains while he/she is “occupying any vehicle located for use as a residence or premises.”
Medical pay exclusion #4 is the “workers compensation” exclusion. Nothing is payable under coverage B if workers compensation benefits are available to the insured for the injury.

Medical Payment Conditions

Two conditions apply to this section of the PAP: “limit of liability” and “other insurance. “

The limit of liability shown on the declarations page is the most the insurer will pay per person injured in an accident. However, there is no aggregate limit. This condition does, however, reduce any medical payments coverage available to the injured person, by the amount he receives under the liability or un(under)insured motorist (UM or UIM) sections.

The “other insurance” condition provides that this section pro-rates payments with any other available automobile medical pay.
The condition goes on to stipulate that the coverage is excess when the insured is injured in a non-owned vehicle.

Personal Injury Protection – Part B2

Insuring Agreement: The insurer will pay Personal Injury Protection benefits because of bodily injury:

Resulting from a motor vehicle accident; and
Sustained by a covered

The insurer’s payment will only be for losses or expenses incurred within THREE YEARS from the date of accident.

Personal Injury Protection Benefits Consist Of:

Reasonable expenses incurred for necessary medical and funeral services.
Eighty percent of a covered person’s loss of income from employment.
These benefits apply only if, at the time of the accident, the covered person
Was an income producer’s; and
Was in an occupational status

These benefits do not apply to any loss after the covered person dies.

Loss of income is the difference between:

Income which would have been earned had the covered person not been injured; and
The amount of income actually received from employment during the

If the income being earned as of the date of accident is a salary or fixed remuneration, it shall be used in determining the amount of income which would have been earned. Otherwise, the average monthly income earned during the period (not more than 12 months) preceding the accident shall be used.

REASONABLE EXPENSES INCURRED FOR OBTAINING SERVICES. THESE SERVICES MUST REPLACE THOSE A COVERED PERSON WOULD NORMALLY HAVE PERFORMED:

Without pay;
During a period of disability; and
For the care and maintenance of the family or

THESE BENEFITS APPLY ONLY IF, AT THE TIME OF THE ACCIDENT, THE COVERED PERSON:

Was not an income producer; and
Was not in an occupational

THESE BENEFITS DO NOT APPLY TO ANY LOSS AFTER THE COVERED PERSON DIES.

Limits Of Liability

The Limit of Liability shown in the Declarations for this coverage is the insurer’s MAXIMUM LIMIT of liability for each person injured in anyone accident and will pay regardless of the number of:

Covered persons;
Claims made;
Vehicles or premiums shown in the Declarations; or
Vehicles involved in the accident.

Other Insurance

LOSS PAYMENTS. BENEFITS ARE PAYABLE:

Not more frequently than every two weeks; and
Within 30 days after satisfactory proof of claim is

MODIFICATION:

The General Provision part of the policy entitled “Our Right to Recover Payment” does not apply to this coverage.

Assignment of Benefits:

Payments for medical expenses will be paid directly to a physician or other health care provider if the insurer receives a written assignment signed by the covered person to whom such benefits are payable