Question

The Anytime Insurance Agency has a Business Auto policy with $100,000 in Liability with coverage Symbol #1. The also have Collision, Other than Collision and Basic Personal Injury Protection (PIP) with a $500 deductible and coverage Symbol #2. The company owns two vehicles, a 2005 Ford Expedition and a 2003 Lexus. One day the company's office manager was taking the Lexus to the bank to make some deposits and was broadsided by a vehicle running a red light. Injuries were severe and the office manager was rushed to the hospital emergency room. Claims for damage to the Lexus and injuries to the employee were turned into your office for processing under the company's Business Auto policy's Collision and PIP coverages. How would you handle the claims?

(A) The collision claim is not covered as symbol #2 provides coverage only for specifically-described autos. The PIP claim is not covered as it is excluded. The employee's injuries would be covered under Workers' Compensation.

(B) Neither the collision claim nor the PIP claim is covered because the employee did not get permission to drive the car.

(C) The collision claim is covered but the PIP claim is not as it is excluded. The employee's injuries would be covered under Workers' Compensation.

(D) The collision claim is covered, subject to the $500 deductible, and the employee's injuries would be eligible for PIP coverage up to the $10,000 limit.

Answer 1

The collision claim for Anytime Insurance Agency's Lexus would be covered subject to a $500 deductible, and the employee's injuries are eligible for PIP coverage, as the vehicle is likely listed under the policy referring to coverage symbol #2. Liability coverage applies due to coverage symbol #1, and PIP benefits provide necessary coverage for the injuries sustained.

Correct answer is D.

Step-by-step explanation:

The correct answer to how the claims would be handled is (D) The collision claim is covered, subject to the $500 deductible, and the employee's injuries would be eligible for PIP coverage up to the $10,000 limit.

Coverage symbol #1 denotes any auto, which means the liability coverage applies to all vehicles the insured owns, leases, hires, or borrows.

In this case, since the accident happened during a business errand, the company's auto liability insurance should cover the damages to other parties involved.

Coverage symbol #2 specifies that only the vehicles listed in the policy are covered for Collision, Other than Collision, and PIP.

If the Lexus is listed under the policy, the damages to the Lexus due to the collision would be covered after the payment of the $500 deductible. Furthermore, irrespective of fault,

Basic Personal Injury Protection (PIP) provides benefits for necessary medical expenses and, in some cases, lost wages and other damages due to an injury from an auto accident.

Since the coverage symbol #2 is mentioned for PIP, it indicates that this specific coverage applies to a covered auto, which means the employee's injuries should be covered by PIP.

The example with 100 drivers paying a $1,860 premium each demonstrates how automobile insurance works by pooling risk and ensuring there are enough funds to cover claims.

This principle applies to the business auto policy held by Anytime Insurance Agency, allowing for the coverage of such collision claims and PIP benefits.

Correct answer is D.