General Auto Insurance and Confiscation

What to learn more about general auto insurance?

The first exclusion shown above states that the insurer will not indemnify the insured for loss due to confiscation. (This refers to Comprehensive coverage, of course, since the loss would not be covered in any event under the other coverages.) The second exclusion states that, regardless of confiscation by the authorities, the insurer will not be liable for any loss what so ever collision, fire, theft, etc. while the automobile is used in illicit trade or transportation. Such usage, like public livery uses, subjects the insurer to greater chance of loss than that contemplated in the premium charged. In addition, of course, it is illegal.
Family cars can also be used in illicit transportation and are also subject to confiscation. The fact that the FAP omits these two exclusions does not mean that there is any intent to cover the losses referred to in them. Rather, the drafters of the FAP rely on the “exclusions” implicit in the common law itself and leave out express mention of them in the contract for purposes of simplicity and brevity only. Since it would be contrary to public policy to encourage the commission of criminal acts with the promise of indemnification, an general auto insurance policy would be held void at common law with respect to these matters whether expressly excluded or not.
Outside the egregious violations mentioned above, this general rule has to be applied with discretion. Driving without a license, at an illegal speed, on the wrong side of the road; failure to give right of way; and innumerable other violations of criminal statutes applicable to automobiles occur all the time. If the insurer were to turn down all physical damage claims tinged with a criminal element, many policyholders would be deprived of the protection for which they pay premiums.
As with the discussion of “Exclusions,” comment here will be confined to those aspects of the BAP that differ from the FAP.
Instired’s Duties in Event of Physical Damage Loss. In the BAP, proof of loss following an insured accident must be submitted “within 60 days after the occurrence of loss.” In the FAP the time allowed for filing proof is extended to 91 days. Since it is usually to the insured’s advantage to obtain payment for his loss as quickly as possible, there would seem to be little need for any extension in the time required for filing proof of loss. However, if the damages were minor and the insured was on an automobile trip that he did not wish to interrupt, there might be some advantage in having extra time in which to go through the formalities of proving loss on general auto insurance. Naturally, notice of physical damage loss must always be given “as soon as practicable.
Under both policies the insured’s first duty is to protect the property against further loss, and both policies agree to reimburse the insured for the reasonable expenses of so doing. However, this promise of reimbursement does not extend to rewards. If his automobile was stolen, the insured might feel that the posting of a reward could lead to an early recovery and hence to a protection of his property from further damage. The BAP expressly declines liability for this kind of expense. While the FAP is silent on the point, it is quite unlikely that a claim for a reward would be looked upon as a legitimate expense for the insured to incur as a “protection” measure.

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