Principles of Risk Management and Insurance: Personal Auto Policy

Principles of Risk Management and Insurance: Personal Auto Policy

1. Personal Auto Policy (PAP)
2. Liability Coverage

In limited coverage, the settlement is done by the PAP even if the insured is found legally responsible for the property damage or injury (Gorge, 2016). It covers anyone driving the car, whether the insured or someone else driving the vehicle.

1. Medical Payment Coverage

Medical payment coverage is an optional cover where anyone in the insured care whether the policyholder, family member or policyholder with someone else in the car can claim medical expenses incurred due to an accident. However, it does not cover third parties medical expenses.

• Unsecured Motorist Coverage

Unsecured motorist coverage covers the name insured for body damages if the insured is involved in an accident with an underinsured, uninsured, or a hit and run driver.

1. Coverage for Damage

Coverage for damage covers the car from any physical damage due to collision or causes other collisions, including contacts with birds, theft, or fire. Damages to the car are covered under this part.

2. Purchase Recommendations

Miranda should purchase all the I), III), and IV). Part I) covers her legal liability as she is buying her first car, and the chances of legal obligation are quite high. Part II) may not be compulsory if Miranda has a medical cover. Part III) is crucial as it is mandatory in some states. Part IV) will cover any physical damage to the care, and since she is a student, losses may be quite high for her.

3. Coverage Availability
4. The cover is available according to Part IV), any legal liability because of driving the care is covered under PAP if responsible for the accident.
5. No coverage is unavailable since PAP does not cover the insured or the insured car in case the driver is under the influence of alcohol or any other drug
6. Part IV) states that whether the insured is at fault or not, coverable is available. However, it must not be intentional or on purpose.

Reference

Gorge, G. (2016). Insurance risk management and reinsurance. Lulu. Com.