Question

An insured woman has collision, OTS, and liability protection on her auto policy. She borrows an auto on which the owner carries only liability coverage. She is in an at fault accident. How will the claim be settled?

1) the auto owner's liability is primary; no collision coverage applies
2) the insured woman's liability is primary; no collision coverage applies
3) the auto owner's liability is primary; the insured woman's collision coverage will cover the borrowed car
4) the insured woman's liability insurance is primary and her collision coverage will cover the borrowed car

Answer 1

In case of an at-fault accident in a borrowed vehicle, the vehicle owner's liability insurance is primary, and the insured woman's collision coverage may provide secondary coverage for the borrowed car. Option 3 is correct.

Step-by-step explanation:

If an insured woman with collision, Other Than Collision (OTS), and liability protection on her auto policy borrows an auto which only has liability coverage and has an at-fault accident, here's how the claim would typically be settled:

The auto owner's liability insurance is considered primary when the accident occurs. This means that the owner's insurance will first be used to cover the damages or injuries to other parties. Since the owner only carries liability insurance, their policy will not cover the damages to the borrowed car itself. However, since the insured woman has collision coverage on her own policy, her insurance may act as secondary coverage and potentially cover the damages to the borrowed car after the primary insurance has been exhausted, subject to her policy's terms.

Therefore, the correct answer is:

(3) the auto owner's liability is primary; the insured woman's collision coverage will cover the borrowed car.