Hamilton/Ferguson, Personal Risk Management and Property-Liability Insurance – SK
Some states have even repealed their no-fault laws and returned to tort.
Personal Injury Protection (PIP) Endorsements (do we need this section? – cuts off)
If PIP Endorsement is used, then Part B – Medical Payments is not in effect.
State laws define the exact benefits, but these are fairly consistent.
Each endorsement includes: insuring agreement listing benefits; exclusions; definitions section; limits of liability provision; conditions by which the insured and insurer must abide.
Coverage Under Modified No-Fault Laws
Benefits (cuts off) – includes Medical expenses; work loss or income continuation benefits; essential services expenses; funeral expenses; survivor benefits.
Residual Market Auto Insurance (in Chapter 9)
Automobile Insurance Plans – assigned risk plans – administered by the state. Drivers apply to these programs when they are rejected in the voluntary market. Insurance companies are assigned proportional to premium volume in the state. The individual companies issue the policies and do all service work. But rates are uniform as determined by the state.
Reinsurance Facilities – premiums/losses can be ceded to this facility. The insurer that writes a policy services the claims that arise. Operating losses/expenses are shared by all insurers. When an insurer writes a policy, they can either keep it in their voluntary business or ceded the premiums to the facility, but each insurer is limited in the total amt of premium they can cede. When a claim occurs, the insurer pays the claim and is reimbursed by the facility. Periodically, losses are apportioned among insurers according to a formula.
Joint Underwriting Associations (JUAs) – a select # of insurers are designated to handle all residual business. Results of JUA business are shared based on an insurer’s share of the voluntary auto insurance written. How it works: the insurer forwards an unacceptable applicant to the JUA. Then the JUA picks a servicer who issues the policy. The rates are uniform, based on the experience of the pool.
Maryland Automobile Insurance Fund – the only state-run fund. A driver must provide evidence of cancellation from one insurer and evidence that application was rejected by 2 other private insurers. Everything is run by MAIF personnel.