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What Are the Maximum Limits for Additional No-Fault Coverage?

Question from an IIABNY member: Why is it in New York State for commercial lines Additional Personal Injury Protection (a/k/a, APIP or "additional no-fault) is offered to customers up to a maximum of $150,000 and for personal lines the max is $100,000 APIP. Is it just because one is commercial and one is personal.? Are there different amounts approved by New York State?

Answer: This is an interesting question. I checked the New York rating pages for both personal and commercial auto, and sure enough the personal auto page shows APIP limits up to $100,000 and the commercial auto page shows APIP limits up to $150,000. However, nothing in New York insurance law or regulations puts a limit on the amount of APIP benefits an insurer may offer, either for personal or commercial. 

New York Insurance Law Section 5102(a) defines “basic economic loss,” which is the formal name for no-fault benefits. It states, “ ‘Basic economic loss’ means, up to fifty thousand dollars per person of the following combined items …” However, Section 5102 does not contain a definition of “extended economic loss,” which is what the APIP endorsements provide. Section 5103 is the law that actually requires insurers to include no-fault coverage on all auto liability policies; the only reference it makes to higher limits is in subsection (c), which deals with deductibles:

(c) Insurance offered by any company to satisfy the requirements of subsection (a) hereof shall be offered (i) without a deductible and (ii) with a family deductible of up to two hundred dollars (which deductible shall apply only to the loss of the named insured and members of his household). The superintendent may approve a higher deductible in the case of insurance policies providing additional benefits or pursuant to a plan designed and implemented to coordinate first party benefits with other benefits.

New York Insurance Regulation 68-A (11 NYCRR 65-1.3) contains the rules for APIP coverage. Most of the regulation is the actual text of the APIP endorsement, and it includes a definition of “extended economic loss”:

Extended economic loss shall consist of the following:

(a) basic economic loss sustained on account of an accident occurring within the United States of America, its possessions or territories, or Canada, which is not recovered or recoverable under a policy issued in satisfaction of the requirements of article 6 or 8 of the New York Vehicle and Traffic law and article 51 of the New York Insurance Law;

(b) the difference between

(i) basic economic loss; and

(ii) basic economic loss recomputed in accordance with the time and dollar limits set out in the declarations; and

(c) an additional death benefit in the amount set out in the declarations

Note there is no stated maximum limit for extended economic loss here, either. Also, a New York State Department of Financial Services opinion dated May 15, 2008 states:

As set forth in 11 NYCRR § 65-1.3(b)(ii), APIP extends basic economic loss by permitting insurers to alter time and dollar limits in the policy declaration page beyond the limits of PIP basic economic loss. Although APIP must confer an additional benefit on the insured by altering the time and/or dollar limits available under PIP, the manner by which APIP confers this additional benefit is left to the discretion of the insurer. [EMPHASIS ADDED]

Here, the declaration page that the inquirer provided to the Insurance Department states that the inquirer's basic economic loss was increased to $200,000. …

Not only is the manner of providing APIP benefits up to the insurer’s discretion, but the attorney casually mentions that the policy in question provided a $200,000 APIP limit. I’ve read enough department opinions to know that, when an insurer offers something outside the parameters of New York law, the attorney writing the opinion always labels it as a violation. The attorney who wrote this opinion didn’t do that. Lastly, New York Insurance Regulation 41, which regulates excess line brokers, contains the so-called “export list,” the list of coverages for which an excess line broker is not required to obtain declinations from the voluntary market. Among the items on that list is, “Automobile Personal Injury Protection (PIP) Excess of $150,000.”

The only conclusion I can draw is that New York law and regulations do not limit the amount of APIP coverage an insurer may offer, but admitted insurers are unwilling to offer limits above $100,000 or $150,000. I’m sure you’re wondering where the options in the ISO rating manuals came from, and I really don’t have an answer to that. ISO works with industry panels; I served on a producer committee for three years that met with ISO annually, and I know that ISO has carrier panels as well. It’s possible that the carriers told ISO that the $100,000 and $150,000 limits were the most they typically offer. Maybe they offer more for commercial auto because commercial limits, in general, are typically higher than personal limits. That’s just a guess, however. 

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When An Employee Rents a Car: Protecting the Employer

Question from an IIABNY member: My commercial lines client wants to know if one of his employees rents a car for business, either on a company or a personal credit card, is the business covered by its commercial auto or liability policy?

Answer: I’m assuming that your client has the equivalent of the ISO Business Auto Policy, CA 00 01 03 10. The answer depends on the symbols shown in the policy Declarations for Liability Coverage. If the Declarations show symbol 1 (Any “Auto”), then there is coverage. Otherwise (assuming the employee is renting the vehicle in her own name, even if using a corporate credit card), there is no coverage unless the Declarations show symbol 9 (Non-owned “Autos” Only). In either case, however, your client’s policy would provide primary liability coverage for a loss involving the rental car only if the rental contract requires the client or employee to assume liability for use of that car. Otherwise, the car rental company’s coverage will be primary and your client’s coverage will be excess.

The policy defines symbol 9 as:

Only those "autos" you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes "autos" owned by your "employees", partners (if you are a partnership), members (if you are a limited liability company) or members of their households but only while used in your business or your personal affairs.

Recall that, in this context, the word “you” means the named insured shown in the Declarations; i.e., the name of the business. If the named insured is Acme Corp., then a vehicle rented by an employee for business purposes is one that Acme Corp. does not own, lease, hire, rent or borrow. (If the rental contract was actually between the car rental company and Acme Corp., then symbol 8, Hired “Autos” Only, would be needed. However, I think it’s more common for employees to rent cars in their own names.)

In Section IV – Business Auto Conditions, condition B.5. states:

5. Other Insurance

a.  For any covered "auto" you own, this coverage form provides primary insurance. For any covered "auto" you don't own, the insurance provided by this coverage form is excess over any other collectible insurance.

However, while a covered "auto" which is a "trailer" is connected to another vehicle, the Liability Coverage this coverage form provides for the "trailer" is: 

 (1)  Excess while it is connected to a motor vehicle you do not own. 

 (2)  Primary while it is connected to a covered "auto" you own.

b.  For Hired Auto Physical Damage Coverage, any covered "auto" you lease, hire, rent or borrow is deemed to be a covered "auto" you own. However, any "auto" that is leased, hired, rented or borrowed with a driver is not a covered "auto".

c. Regardless of the provisions of Paragraph a. above, this coverage form's Liability Coverage is primary for any liability assumed under an "insured contract".

d.  When this coverage form and any other coverage form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our coverage form bears to the total of the limits of all the coverage forms and policies covering on the same basis. 

Definition H. in the policy includes the following:

H. "Insured contract" means: …

6.  That part of any contract or agreement entered into, as part of your business, pertaining to the rental or lease, by you or any of your "employees", of any "auto". However, such contract or agreement shall not be considered an "insured contract" to the extent that it obligates you or any of your "employees" to pay for "property damage" to any "auto" rented or leased by you or any of your "employees".

Therefore, a car rental agreement is an insured contract. If the employee or employer assumes liability under the rental agreement, then the employer’s coverage is primary, but only if the employer has either symbol 1, symbol 8 (contract between employer and car rental company), or symbol 9 (contract between employee and car rental company.)

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Does Personal Underinsured Motorist Coverage Apply in Employer's Auto?

Question from an IIABNY member: If you are in an employer’s vehicle, you are the passenger, there is an accident, and the other driver and your employer carry only the minimum liability limits required by the state, are you able to collect on your personal auto policy Supplementary Uninsured/Underinsured Motorist (SUM) coverage for things not covered by your Workers' Compensation benefits? 

Answer: Interesting question. ISO endorsement PP 04 09 12 00, Supplementary Uninsured/Underinsured Motorists Endorsement – New York, states in relevant part:

Insured. The unqualified term "insured" means:

(1) You, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse;

(2) Any other person while occupying:

(i) A motor vehicle insured for SUM under this policy: or

(ii) Any other motor vehicle while being operated by you or your spouse; and

(3) Any person, with respect to damages such person is entitled to recover, because of bodily injury to which this coverage applies sustained by an insured under Paragraph (1) or (2) above.

In your scenario, the injured person was a passenger in the employer’s vehicle. Let’s assume that the injured person falls within the above definition of “insured” in the SUM endorsement. The endorsement goes on to define “uninsured motor vehicle” in part as:

The term "uninsured motor vehicle" means a motor vehicle that, through its ownership, maintenance or use, results in bodily injury to an insured, and for which: ...

(3) There is a bodily injury liability insurance coverage or bond applicable to such motor vehicle at the time of the accident, but:

(i) The amount of such insurance coverage or bond is less than the third-party bodily injury liability limit of this policy; or

(ii) The amount of such insurance coverage or bond has been reduced, by payments to other persons injured in the accident, to an amount less than the third-party bodily injury liability limit of this policy; or

(iii) The insurer writing such insurance coverage or bond denies coverage, or such insurer is or becomes insolvent.

In the incident you described, the other driver’s vehicle appears to fall within this definition. The Damages for Bodily Injury Caused by Uninsured Motor Vehicles provision states:

We will pay all sums that the insured or the insured's legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, caused by an accident arising out of such uninsured motor vehicle's ownership, maintenance or use, subject to the Exclusions, Conditions, Limits and other provisions of this SUM endorsement.

There are only three exclusions – settlement without the insurer’s consent, autos owned by the insured that do not carry SUM coverage, and non-economic loss. Therefore, it appears that a person injured in his employer’s vehicle is eligible for SUM benefits under his personal auto policy. Since both the employer’s UM/UIM coverage and the employee’s SUM coverage are involved, we have to refer to the Priority of Coverage provision determine who pays what:

If an insured is entitled to uninsured motorists coverage or supplementary uninsured/underinsured motorists coverage under more than one policy, the maximum amount such insured may recover shall not exceed the highest limit of such coverage for any one vehicle under any one policy, and the following order of priority shall apply:

(a) A policy covering a motor vehicle occupied by the injured person at the time of the accident;

(b) A policy covering a motor vehicle not involved in the accident under which the injured person is a named insured; and

(c) A policy covering a motor vehicle not involved in the accident under which the injured person is an insured other than a named insured.

Coverage available under a lower priority policy applies only to the extent that it exceeds the coverage of a higher priority policy.

Suppose there were three people in the employer’s car, each was injured, and a court awards them a total of $375,000 ($125,000 each.) The other driver carried minimum limits, the employer carried minimum UM/UIM limits and no SUM coverage, and  the employee had personal SUM coverage with limits of $250/$500. Here’s how the math works out: 

• Driver #2’s liability insurance pays $50,000 total for the three people injured in the employer’s car
• Employer’s UIM coverage pays $50,000 total for the three people (higher priority coverage)
• Employee’s SUM coverage pays $25,00 (lower priority coverage)

Bear in mind that the Non-Duplication provision states that SUM coverage will not duplicate Workers’ Comp benefits and no-fault benefits, so these numbers may have to be adjusted to reflect that. However, this is basically how it works.

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If You Sell a Car, Take the License Plates Off It

Photo by Steven Depolo. Used under a Creative Commons Attribution 2.0 license.

Suppose you sell a car in a private sale. Suppose further that the buyer didn't want to register the car right away. Suppose he asked you if you would leave the license plates on it for awhile. You just want the cash for the car. What do you care? What could possibly go wrong?

Well, the buyer could drive the car into a tree and seriously injure the young lady occupying the passenger seat. And, if that happens, in the eyes of the court, you still own the car.

Oops.

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What PAP Coverage Does an Additional Insured NOT Get?

Question from an IIABNY member: What is the difference between the coverages afforded the named insured on a personal auto policy vs. the entity named as additional insured on the same policy.  What would that additional insured NOT be covered for?

Answer: Interesting question. The answer hinges on the policy definitions and the wording in the exclusions. The definitions begin with: 

A. Throughout this policy, "you" and "your" refer to:

1. The "named insured" shown in the Declarations; and

2. The spouse if a resident of the same household.

This draws a distinction between the named insured and other insureds. A number of exclusions are relevant to this distinction:

EXCLUSIONS

A. We do not provide Liability Coverage for any "insured": …

2. For "property damage" to property owned or being transported by that "insured".

3. For "property damage" to property:

a. Rented to;

b. Used by; or

c. In the care of;

that "insured".

This Exclusion (A.3.) does not apply to "property damage" to a residence or private garage.

4. For "bodily injury" to an employee of that "insured" during the course of employment, this Exclusion (A.4.) does not apply to "bodily injury" to a domestic employee unless workers' compensation benefits are required or available for that domestic employee. ...

7. Maintaining or using any vehicle while that "insured" is employed or otherwise engaged in any "business" (other than farming or ranching) not described in Exclusion A.6.

This Exclusion (A.7.) does not apply to the maintenance or use of a:

a. Private passenger auto;

b. Pickup or van; or

c. "Trailer" used with a vehicle described in a. or b. above.

Here are examples of losses for which the additional insured could not collect because of these exclusions:

• An employee has a company-owned laptop computer in his car when he crashes into a toll booth because he was texting. The company cannot recover for the destroyed laptop because of exclusion 2 (property damage to property owned by that insured.)
• Similarly, if the employee had a sound system that his employer had rented for a special event in his car, the employer cannot recover for the damage to the sound system because of exclusion 3 (property damage to property rented by that insured.)
• Two employees are driving to a sales call, and the driver rear-ends another vehicle, injuring both employees. The employer cannot obtain defense and indemnity for the passenger’s injuries because of exclusion 4 (bodily injury to an employee of that insured during the course of employment.)
• An employee rents a U-Haul truck under his own name so that he can move furniture that his employer wants sent to a secondary location. He runs a red light and collides with another vehicle, totaling that vehicle and injuring the driver. The employer cannot obtain defense and indemnity for the damage to the other vehicle and that driver’s injuries because of exclusion 7 (using a vehicle while that insured is engaged in a business and where that vehicle is not a private passenger auto, pickup, van or trailer.)

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Is That Good Deed Covered?

Photo by Tim Pearce. Used under a Creative Commons Attribution 2.0 license.

Question from an IIABNY member: We have a personal auto client insured with a direct writer insured under a New York State personal auto policy. She is volunteering her time and her personal auto to drive people (who have no direct access to a vehicle) to doctors appointments and the grocery store. There is minimal public transportation in the area and in response to this, a non-profit was formed about 20 years ago. Our client drives her vehicle on behalf of the non-profit organization. 

Our client is dispatched by the organization and receives reimbursement for mileage at the current IRS rate (around 45-55 cents per mile) for passengers she transports in her personal auto. She receives no additional compensation other than mileage reimbursement. The organization maintains that they are not considered a livery or taxi service since no money changes hands between the driver and passenger (the car owner is paid mileage reimbursement directly from the non-profit) and since the mileage is reimbursed at a rate no more than the IRS payment schedule. The organization is stating that since they are not considered a livery or taxi service (based on the two reasons stated above) that their volunteers should have no coverage issues related to the standard livery conveyance exclusion contained in personal auto policies. 

I have attached a copy of the exclusion in our client's personal auto policy and would appreciate your interpretation.

Answer: This question turned out to be more complicated than I expected. I think your insured may have a coverage gap because I cannot say with any certainty how her carrier might apply the exclusion in this state. The ISO Personal Auto Policy contains a similar exclusion in the Liability Coverage section. The ISO exclusion states: 

A. We do not provide Liability Coverage for any "insured": …

5. For that "insured's" liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This Exclusion (A.5.) does not apply to a share-the-expense car pool.

The version in your client's policy states:

This coverage does not apply to liability for:

(1)    Your insured auto while used to carry persons or property for a charge, or any auto you are driving while available for hire by the public. This exclusion does not apply to shared-expense car pools.

According to the International Risk Management Institute, the ISO exclusion does not apply to situations like your client's because the transportation she provides is not available to the general public. IRMI's analysis cited a 1986 Kentucky court decision that found coverage in the PAP for just this type of arrangement. 

However, since the language in her policy is slightly different, I don’t think it’s safe to rely on this analysis as the basis for an assumption of coverage. Unfortunately, I could not find a New York court case that has interpreted this exact wording. The only case I found that even mentioned it was a 1988 decision that threw out a carrier's appeal on a technicality (they took too long to deny coverage.) Also, that case involved an insured using the car for his job, not someone doing essentially volunteer work. The most relevant case I found was a 1987 case from Alabama, where parents paid $1 each way to have their children picked up and driven to and from day care. The court ruled in favor of the carrier.

In short, I could not find a New York court decision testing the carrier’s language, and the one out-of-state case I found favored the carrier. If their wording mirrored ISO’s, I would conclude that your insured has nothing to worry about, but that’s not the case. I suggest that your insured check with her carrier's agent to see if an endorsement is available that would modify the exclusion to better fit her exposure.

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NY Changes to the Personal Auto Policy (Part 8)

 

Photo by orangesky3 (flickr). Used under a Creative Commons Attribution 2.0 license.

This is it. The last in the series looking at ISO endorsement PP 01 79 04 09, Amendment of Policy Provisions -- New York, starting with the nonrenewal provisions.

• If the insurer decides not to renew the policy, it must mail a notice to the named insured. The insurer's right to non-renew the policy is subject to the requirements of New York Insurance Law Sect. 3425.
• If the insurer has the right to nonrenew, it may instead condition a renewal upon a change of limits or elimination of any coverage not required by New York law (such as liability or no-fault.) The insurer must mail the conditional renewal notice to the named insured.
• Both nonrenewal and conditional renewal notices must be sent at least 45 but no more than 60 days before the end of the policy period, and they must state the reason for the insurer's action.
• The notice requirements do not apply if the named insured, another insurer, or the named insured's representative notifies the insurer that the policy has been replaced or is no longer wanted.

The endorsement adds three more termination provisions:

• A U.S. Postal Service mailing certificate is sufficient proof that the insurer mailed a notice.
• If the policy is cancelled, the named insured may be entitled to a premium refund which the insurer will send. The insurer will compute the refun according to its manuals, but making or offering to make the refund is not a condition of cancellation.
• The effective date shown in the notice becomes the effective end of the policy period.

Three other wrinkles to the New York endorsment:

• The unendorsed policy states that, if the policy and any other auto insurance policy issued to the named insured by the insurer apply to the same accident, the most the carrier is responsible for is the highest applicable limit of liability under any one of the policies. The New York endorsement states that this provision does not apply to Liability Coverage. Therefore, the insured could stack the limits of the policies together.
• Notice to an authorized agent of the insurer is equivalent to notice to the insurer. Any written notice given by or on behalf of a claimant to the insurer's authorized agent is also equivalent to notice to the insurer.
• Finally, if the policy includes the Limited Mexico Coverage Endorsement, the definition in that endorsement of "newly acquired auto" is changed to include a pickup or van predominantly used for nonbusiness purposes. The endorsement has a much narrower inclusion of pickups and vans -- they must have gross vehicle weights of 10,000 pounds or less and not be used for delivery or transportation of goods and materials unless that use is incidental to the named insured's business of installing, maintaining or repairing furnishings or equipment or of farming or ranching. 

That's a wrap, folks! Would you like to see more series like this in the future, reviewing the New York endorsements for other types of policies? Please drop a line in the comments.

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NY Changes to the Personal Auto Policy (Part 7)

 

Photo by stupid.fotos. Used under a Creative Commons Attribution 2.0 license.

We're nearing the end of the painful painstaking, exhausting exhaustive review of the New York changes to the ISO Personal Auto Policy. 

The endorsement makes several changes to the Legal Action Against Us Provision:

• The policy requires, for a Liability claim, either the insurer's agreement in writing that an insured has an obligation to pay or an actual court award, before legal action can be taken against the insurer. The endorsement specifies that the written agreement must be between the insurer, the insured and the claimant.
• The endorsement adds two paragraphs. If the insurer denies a bodily injury liability claim due to late notice of loss, the claimant may take legal action against the insurer. This applies only if the sole question is whether the denial is based on the failure to give timely notice. The claimant cannot bring an action against the insurer if, within 60 days of the denial, the insurer or insured brings an action to declar the rights of the parties under the policy and names the claimant as a party to that action.
• If the insurer fails to pay for bodily injury or property damage liability within 30 days after a judgment of liability is entered, an action may be brought against the insurer for the amount of the judgment, subject to the limit of liaiblity. The action may not be taken during a stay or limited stay of execution against the insured.

The endorsement replaces the entire Termination Provision with New York specific requirements.

• During the policy term, the named insured can cancel the policy by returning it to the insurer or giving the insurer advance written notice of the date cancellation is to take effect. 
• The insurer can cancel the policy during the policy term by mailing a notice to the named insured. The notice must provide 15 days' notice if the insurer is cancelling for nonpayment of premium and 20 days' notice for all other reasons.
• During the first 60 days a policy is in effect, the notice must state the reason for cancellation. After the first 60 days and on renewal policies, the insurer can cancel the policy only for the following reasons:
  • Nonpayment of premium
  • The suspension or revocation of the driver's license of any driver who customarily uses a vehicle insured under the policy. This does not apply to a suspension that occurs due to a violation during a new driver's probationary period or one or more administrative supsensions from the same incident which terminate before the cancellation date. The suspension or revocation must occur during the policy period or since the last anniversary of the original effective date (if the policy period is other than one year.)
  • Discovery of fraud or material misrepresentation in obtaining the policy or in presenting a claim. A misrepresentation is material if the truth would have changed the underwriting decision to accept the risk.
• The insurer has the right to cancel for one of these reasons even if it applies to new coverage added since the original issuance of the policy. The insurer's right to cancel applies to each and every coverage or limit provided by the policy.
• If the insurer has the right to cancel, it may instead condition continuance on change of limits or elimination of any coverage not required by law (such as Comprehensive or Collision.) The insurer must give the named insured 20 days' notice before doing this.

The next post will be the last in this series, covering nonrenewal, other termination provisions, a notice provision, and an optional coverage.

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NY Changes to the Personal Auto Policy (Part 6)

Photo by Pat Hawks. Used under a Creative Commons Attribution 2.0 license.

 

Continuing the analysis of the ISO Amendment of Policy Provisions — New York endorsement to the Personal Auto Policy, we see that the endorsement makes a number of changes to the policy's Part E — Duties After An Accident or Loss:

The endorsement replaces the word "promptly" with the phrase "as soon as reasonably possible" in the following duties:

• To notify the insurer of the details of the accident or loss
• To send the insurer copies of notices or legal papers received in connection with the event
• In a claim for Uninsured Motorists Coverage, to 1) notify the police if a hit-and-run driver is involved; and 2) send the insurer copies of the legal papers if a suit is brought

A failure to give timely notice of the loss to the insurer will not invalidate a claim unless that failure prejudices the insurer. The insurer cannot invalidate a claim if the insured, injured person or other claimant can show that it was not reasonably possible to give timely notice and that notice was given as soon as was reasonably possible afterward.

The policy's Fraud provision removes coverage an insured who makes fraudulent statements or engages in fraudulent conduct in connection with any accident or loss for which coverage is sought under the policy. The endorsement restores coverage for that insured for damages sustained by any person who has not made fraudulent statements or engaged in fraudulent conduct if the damages result from an accident that would otherwise be covered. 

Suppose father and 19 year-old son (who lives at home) are out for a drive with the son behind the wheel. The son rear-ends a 2013 Lexus. Father doesn't want his insurance premium to skyrocket (teenager with an at-fault accident on his record), so he tells the insurer that he (the father) was driving. The driver of the Lexus suffers a back injury and makes a no-fault claim to his insurer, giving said insurer a full description of what happened. Said insurer subrogates against father's insurance, whereupon it comes to light who was actually driving. In this case, the father made a fraudulent statment which would negate coverage for him in the absence of the endorsement. However, the other insurer is seeking recovery from him (he has money, his son doesn't), and these damages arise out of the clumsy but not fradulent conduct of his son. Therefore, father's insurance will cover his liability for this claim.

What happens to the father after that? We'll get to that in the next post or the one after, when we discuss the cancellation and nonrenewal provisions.

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NY Changes to the Personal Auto Policy (Part 5)

 

Photo by YF Photos. Used under a Creative Commons Attribution 2.0 license.

Your eyes are not deceiving you -- I am making a blog post for the second consecutive day. Trying to atone for my lengthy absence, as it were.

Back to the New York changes to the ISO Personal Auto Policy. The endorsement adds some provisions to Part D -- Coverage For Damage To Your Auto. Yesterday, we looked at the mandatory inspection provisions. Three others pertain to repairs, recovery of stolen autos, and collision deductible waivers.

When there is a loss to the insured's auto under Part D, the insurer may not condition payment of the claim upon repair (the insurer must pay even if the claimant decides not to make the repairs), and the insurer may not require that repairs be made by a particular repair shop. 

The insurer is entitled to:

• A completed Certification of Auto Repairs
• An itemized repair bill prepared by the shop, if the auto is repaired
• An inspection of the auto, whether the claimant has it repaired or not.

The insurer has the right to take custody of the insured's auto for safekeeping when it is stolen or abandoned and the insuree finds out where it is.

If the insured's auto is insured for Collision Coverage, and the loss was caused by a collision with another auto insured by the same insurer, the Collision deductible does not apply.

The endorsement makes a few changes to the Payment of Loss provision in Part D.

• While the policy states, "We may pay for loss in money or repair or replace the damaged or stolen property," the endorsement states, "We may pay for loss or the cost to repair or replace the damaged or stolen property."
• The policy promises that the insurer will, if it returns stolen property, pay for any damage resulting from the theft, whereas the endorsement states that the insurer will pay for damage resulting from the loss.
• The policy permits the insurer to keep all or part of the stolen property at an agreed or appraised value. The endorsement adds property the insurer determines to be a total loss or constructive total loss to that category.
• The endorsement repeats that the insurer may not require the insured to have repairs made by a particular repair shop. 

Next time: Duties in the event of a loss and other conditions.

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