Right to recover payment after a loss or accident

Our Right to Recover Payment

This condition contains the personal auto policy's subrogation provisions. When an insurer makes a payment for a loss for which a third party is legally responsible, the insurer becomes subrogated (i.e., succeeds) to the insured's rights to recover from that third party. This condition provides that the insured must cooperate with the insurer in enforcing its subrogation rights against the responsible third party and must do nothing to prejudice the insurer's subrogation rights, such as, for example, releasing the responsible party.

This condition also provides that if the insured recovers damages from the responsible party and the insurer has paid the claim, the insured must hold the recovery in trust for the insurer and reimburse the insurer to the extent of the claim payment.

Policy Period and Territory

This condition provides that the policy's coverage applies only to accidents and losses that occur during the policy period shown in the policy's declarations. It further provides that the policy territory is the United States, its territories and possessions, Puerto Rico, and Canada. (Coverage applies to loss or damage involving covered vehicle while being transported between the ports of the covered policy territories.)

For most persons, it is more important to recognize where coverage will not apply. First, coverage does not apply in Mexico. You need to purchase a separate policy if you wish to drive into and in Mexico. The policy must be purchased from an insurer licensed to issue policies in Mexico. There are significant differences between the laws of the United States and Mexico and in the absence of a policy with coverages that conform to Mexican law, you could face being jailed or having your vehicle impounded in the event of an accident. Under Mexican law, traffic accidents and property damage and bodily injury arising out of accidents are both criminal and civil matters.

Second, the transport coverage only applies between ports of covered territory - while on a ferry between Seattle and Vancouver, British Columbia, for example. If you buy a car for European delivery, your United States auto policy will not cover loss or damage occurring while the car is in shipment to the United States. Again, you need to purchase separate coverage for such an exposure.

Termination

This condition contains the policy's cancellation and nonrenewal provisions. Almost every state has statutory requirements, which are added to policies by means of endorsements that contain the state's limitations on the insurer's right to cancel or nonrenew a policy and the amount and kind of notice required for an effective notice of cancellation or nonrenewal.

The insured's failure to pay premiums is a permissible ground for cancellation. Also, if your driver's license has been suspended or revoked, or if any driver who lives with you or who customarily uses your covered auto is suspended or revoked, the insurer may cancel the policy. Finally, the insurer may terminate if it discovers that the policy was obtained through material misrepresentation.

The ISO personal auto policy also contains two automatic termination provisions. The first of these states that if the insurer has offered to renew or continue coverage and the insured fails to pay the premium, the policy will automatically terminate at the end of the current policy period.

The second provision states that if the insured obtains any other insurance on your covered auto, any similar insurance provided by the policy will terminate for that auto on the effective date of the other policy. Such provisions may conflict with your state's laws governing cancellation of policies and may not be enforceable.

1. Duties that apply to the insured in case of an occurrence
This condition comprises six subparagraphs. First, the duties after occurrence condition has an introductory paragraph that states that in case of an occurrence, an ins...

2. Liability policies include the provision of bankruptcy of the insured
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3. Insurance coverages have various conditions that apply to them
Cancellation The cancellation condition in the standard ISO HO 3 homeowners policy is often superseded by specific states' statutory limitations on cancellation...

4. Structure of the standard personal car insurance policy
Structure of personal car insurance policies As with homeowners policies, there is a standard personal car insurance policy published by the Insurance Services ...

5. Concepts of the personal car insurance policy are very complex
The concepts embraced by this definition contained in the ISO personal auto policy are relatively complex. Most of these concepts appear in one form or another in the p...

6. Purpose of insurance coverage exclusion for owned or rented property
Insurance coverage for owned or transported property This exclusion precludes coverage for property damage to property owned or being transported by the insured...

7. Provisions applicable specifically to auto liability coverages
Car insurance limit of liability The ISO personal auto policy limit of liability condition is quite simple. It provides that the per accident limit of liability...