The ISO personal auto policy limit of liability condition is quite simple. It provides that the per accident limit of liability shown in the policy's declarations is the most the insurer will pay regardless of the number of insureds, claims made, vehicles or premiums shown in the declarations, or vehicles involved in an accident.
This is one example of an antistacking provision. Plaintiffs' personal injury lawyers seeking to maximize recoveries for their clients will commonly urge that the various coverages of all applicable coverages should apply. This would increase their clients' settlement leverages and potential recoveries in the event the cases are tried and go to judgment. Because of this, most auto insurance policies include a variety of provisions intended to negate such claims that the limits of various coverages should be stacked.
Other insurers' policies sometimes go further. For example, in states where a spouse's loss of consortium claim is deemed separate from that of the injured person, only that state's applicable minimum financial responsibility limits are covered for the loss of consortium claim. Exclusions of this sort mean if the law of your state deems a loss of consortium claim by a spouse to be an independent claim from that of the injured spouse, a separate full policy limit will not apply to the loss of consortium claim.
Rather, additional coverage for that loss of consortium claim is limited to the statutory financial responsibility limits that apply in that state (which, depending on the state in question, can be as low as $15,000 per accident).
This is a necessary provision in light of the fact that cars and trucks are by definition mobile, creating the risk of injury or damage to others when cars or trucks are used outside the state of the insured's residence. This condition recognizes that the various states' laws as to minimum statutory financial responsibility limits vary, and provides that the policy will conform to the requirements of applicable laws, regardless of the state in which an accident occurs.
This condition provides that if an auto accident occurs in a state or province other than that where your insured vehicle is principally garaged, and the minimum financial responsibility laws of that state or province require a higher bodily injury or property damage limit than those shown in the policy's declarations, the policy will provide the higher limit required by that state or province. This condition is likely to be of concern only to those persons who maintain the minimum limits required.
The second subparagraph of this condition provides that if the state where the accident takes place has laws that require nonresidents operating vehicles within that state to maintain insurance, the policy will provide at least the minimum limits required by that statute's laws. The final subparagraph of this condition makes clear that this provision will not entitle any person to duplicate payments for the same loss.
This condition is substantially similar to the out-of-state coverage condition. The difference is that this condition is a conformity with the statute provision with respect to the minimum financial responsibility requirements of any state, including the state where a vehicle is principally garaged. It provides that where the insurer certifies the policy as proof of financial responsibility, the policy will afford at least that state's minimum financial responsibility limits.
In the auto liability context, it is relatively common for an insured who is involved in an accident to have coverage under more than one policy. Such circumstances arise when the insured is involved in an accident while using a borrowed or rented vehicle, or using a personal vehicle while engaged in employment.
The other insurance provisions of the ISO personal automobile policy provide that if there is other applicable insurance, the coverage of the policy will apply on a shared basis with the other insurance - the limit the policy bears in proportion to the total limit of all the policies. This is made subject to an exception when the vehicle involved is not owned by the insured. In such circumstances, the policy's limits will apply as excess coverage over any other collectible insurance.
There is common provision in policies issued by companies that do not use the ISO personal auto policy. It states that when an insured is covered under more than one policy issued by the same insurer, the total limits of liability available will not exceed the limits of the policy that has the highest limits. This is an example of an antistacking of policy limits provision.
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1. Insurance coverages have various conditions that apply to them
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