1. Bob and Mary Gordon are both employed. Bob is a
supervisor for a large automobile repair firm. Marie
is a social worker for the State Welfare Department.
Bob and Marie have two children. Karen, aged 20, is
at�tending college 200 miles from home. Ken,
aged 16, lives at home and attends high school. The
Gordon�s own 4 vehicles. Marie is the principal
driver of a 1-year old sedan, which she uses to drive
to and from work. The car is also driven occasionally
on state business.
carsurance.com.sg

2. Bob is the principal driver of a 3-year old customized van, which he uses
to drive to and from work The van is also used by the family for fishing,
camping and outdoor recreation Karen is the principal driver of a 4-year
old sedan, which she uses at col�lege and to travel home on holidays
and weekends Ken is the principal driver of a 6-year old compact car,
which he drives to and from school All vehicles are legally titled in the
names of Robert and Marie Gordon Personal Auto Policy Coverages
No-Fault Auto Insurance does not apply in Gordon's state Endorsement
PP 03-03 is the Towing and Labor Costs Coverage and en�dorsement
PP 03-11 is the Under-Insured Motorists Coverage with limits of
$100,000 for each acci�dent

3. Loss Situations The Loss Situations involve the various types of
coverage provided by the Gor�don's Per�sonal Auto Policy Their
PAP covers not all of these losses, the comments about each loss
explain the coverage that applies or why the loss is not covered Liability
Coverage The following Loss Situations apply primarily to the Liability
Coverage (Part A) under the PAP Each loss is a sepa�rate
occurrence Loss - Bob is involved in an accident with another motorist
who claims that Bob did not have the right of way Damage to the other
driver's car is $5,000 The other motorist also sues Bob for $100,000 and
is awarded dam�ages for Bodily Injury in the amount of $50,00�0

4. The court also awards $2,250 as a prejudgment interest Legal
de�fense costs incurred by Bob's insurer are $25,000 Comment - The
Property Damage Claim of $5,000, the Bodily Injury Claim of $50,000,
and prejudgment interest of $2,500 is paid by Bob's insurer under the
Liability Section of the PAP The legal defense costs of $25,000 are paid
in addition to the amount that Bob is legally required to pay Loss - Bob is
confronted by an irate customer who claims that the brakes of his car are
not repaired properly The mechanic who re�paired the brakes states
that the brakes are fine To determine who is correct, Bob de�cides to
road test the customer's car

5. While carsurance.com.sg Bob is road-testing the car, the brakes fail and
Bob hits another motorist The motorist is seriously injured and Bob is
personally sued for $200,000 Damage to the customer's car is
$4,00�0 Bob also has medical expenses of $3,000 resulting from the
collision Comment - The Bodily Injury incurred by the injured motorist
and the Property Damage to the customer's car are clear�ly excluded
under the Liability Section of the PAP, since Bob was using the
cust�omer's car in the automo�bile or garage business The medical
ex�penses in�curred by Bob are excluded under Med�ical
Payments Coverage, since the injury occurred during the course of
employ�ment and benefits are required and available to Bob under the
State's Wor�kers' Compensation Law

6. The excluded Liability Losses are Com�mercial Loss Exposures that
would be covered under a commercial Garage Liability Policy Bob's
injury is covered by the firm's Workers� Compensation Insurance
Loss - Ken, Bob and Marie's son was driving his girlfriend's car After a
football game, they went to a party He was involved in an accident with
anoth�er motorist who became permanently disabled from the
accident The police arrested Ken and charged him with driving while
intoxicated

7. He was required to post a bail bond of $2,500 Ken is later con�victed
of driving while intoxicated The in�jured motorist is awarded a
judgment against Ken in the amount of $500,000 The liability limit of the
girlfriend's car is $25,000 Comment - Ken's girlfriend's PAP is primary
and pays the first $25,000 of the judgment The girlfriend's policy will also
pay up to $250 for the cost of the bail bond

8. Gordon's PAP pays only $300,000 as Excess Insurance, since that is the
applicable Limit of Liability If Bob and Marie were in�sured under a
Per�sonal Umbrella Policy, the remaining $175,000 of the
judg�ment would have been paid by the Umbrella Insurer As a result
of the driving while intoxicated conviction, Ken will most likely be
excluded from future coverage under his parent's poli�cy Loss - Marie
is attending a profession�al meeting in a large city She rents a car at
the airport While driving to her hotel, she is involved in an accident with
another motorist when she sudden�ly changes lanes without signaling

9. The other driver is seriously in�jured and is later awarded a judgment
of $250,000 The rental agency carries liability limits of $100,000 on the
rental car Comment - The loss is covered under the Non-Owned Auto
Coverage of the Gordon's PAP The first $100,000 of the judgment,
however, is paid by the rental agency's insurer as primary in�surance
The Gordon's PAP pays the remaining $150,000 as Excess
Insur�ance

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