Question

a) Identify & discuss the three major classes of loss associated with the ownership of an automobile. Choose one of the 4 coverages and discuss the coverages and exclusions of that specific coverage.

b) Identify and describe 3 of the major property losses that a business faces, and how commercial property insurance protects against those losses.

Answer 1

Question a)

Three major classes of loss associated with the ownership of an automobile:

1. Legal liability: the entire ownership and title to the automobile lies with the owner

2. Injury to the insured or to his family members

3. Loss to the automobile like theft (in totality or parts) or damage to the vehicle owing to accident etc

An insurance policy which provides prtection against all these 3 types of losses is the Personal Auto Policy.

Coverages included in the policy are: liability coverage, uninsured motorist coverage, physical damage insurance, medical payments coverage. Also, the policy will give protection for various other situations like it will protect the vehicle owner from damages or losses incurred when someone else is driving or operating the vehicle.

Personal Auto Policy is applicable to selected classes of people, like automobiles owned by corporates, partnership firms or by 2 or more individuals who are not residents of the same household are not eligible. The vehicle has to be owned by an individual, husband or wife, or 2 or more persons of the same household.