Bob-And-Mary-Gordon-Are-Both-Employed.-Bob-Is-A-Su45

Bob and Mary Gordon are both employed.
Bob is a supervisor for a large automobile
repair firm. Marie is a social worker for the
State Welfare Department. Bob and Marie
have two children. Karen, aged 20, is
ati1/2tending college 200 miles from home.
Ken, aged 16, lives at home and attends
high school. The Gordoni1/2s own 4
vehicles. Marie is the principal driver of a
1-year old sedan, which she uses to drive to
and from work. The car is also driven
occasionally on state business.
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Bob is the principal driver of a 3-year old customized van, which he uses to
drive to and from work The van is also used by the family for fishing, camping
and outdoor recreation Karen is the principal driver of a 4-year old sedan,
which she uses at coli1/2lege and to travel home carsurance on holidays and
weekends Ken is the principal driver of a 6-year old compact car, which he
drives to and from school All vehicles are legally titled in the names of Robert
and Marie Gordon Personal Auto Policy Coverages No-Fault Auto Insurance
does not apply in Gordon's state Endorsement PP 03-03 is the Towing and
Labor Costs Coverage and eni1/2dorsement PP 03-11 is the Under-Insured
Motorists Coverage with limits of $100,000 for each accii1/2dent Loss
Situations The Loss Situations involve the various types of coverage provided
by the Gori1/2don's Peri1/2sonal Auto Policy Their PAP covers not all of
these losses, the comments about each loss explain the coverage that applies
or why the loss is not covered Liability Coverage The following Loss Situations
apply primarily to the Liability Coverage (Part A) under the PAP Each loss is a
sepai1/2rate occurrence

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Loss - Bob is involved in an accident with another motorist who claims that
Bob did not have the right of way Damage to the other driver's car is $5,000
The other motorist also sues Bob for $100,000 and is awarded dami1/2ages
for Bodily Injury in the amount of $50,00i1/20 The court also awards $2,250
as a prejudgment interest Legal dei1/2fense costs incurred by Bob's insurer
are $25,000 Comment - The Property Damage Claim of $5,000, the Bodily
Injury Claim of $50,000, and prejudgment interest of $2,500 is paid by Bob's
insurer under the Liability Section of the PAP The legal defense costs of
$25,000 are paid in addition to the amount that Bob is legally required to pay
Loss - Bob is confronted by an irate customer who claims that the brakes of his
car are not repaired properly The mechanic who rei1/2paired the brakes
states that the brakes are fine To determine who is correct, Bob dei1/2cides
to road test the customer's car

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While Bob is road-testing the car, the brakes fail and Bob hits another motorist
The motorist is seriously injured and Bob is personally sued for $200,000
Damage to the customer's car is $4,00i1/20 Bob also has medical expenses
of $3,000 resulting from the collision Comment - The Bodily Injury incurred by
the injured motorist and the Property Damage to the customer's car are
cleari1/2ly excluded under the Liability Section of the PAP, since Bob was
using the custi1/2omer's car in the automoi1/2bile or garage business The
medical exi1/2penses ini1/2curred by Bob are excluded under Medi1/2ical
Payments Coverage, since the injury occurred during the course of
employi1/2ment and benefits are required and available to Bob under the
State's Wori1/2kers' Compensation Law The excluded Liability Losses are
Comi1/2mercial Loss Exposures that would be covered under a commercial
Garage Liability Policy Bob's injury is covered by the firm's Workersi1/2
Compensation Insurance Loss - Ken, Bob and Marie's son was driving his
girlfriend's car After a football game, they went to a party

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He was involved in an accident with anothi1/2er motorist who became
permanently disabled from the accident The police arrested Ken and charged
him with driving while intoxicated He was required to post a bail bond of
$2,500 Ken is later coni1/2victed of driving while intoxicated The ini1/2jured
motorist is awarded a judgment against Ken in the amount of $500,000 The
liability limit of the girlfriend's car is $25,000 Comment - Ken's girlfriend's PAP
is primary and pays the first $25,000 of the judgment The girlfriend's policy will
also pay up to $250 for the cost of the bail bond Gordon's PAP pays only
$300,000 as Excess Insurance, since that is the applicable Limit of Liability If
Bob and Marie were ini1/2sured under a Peri1/2sonal Umbrella Policy, the
remaining $175,000 of the judgi1/2ment would have been paid by the
Umbrella Insurer

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As a result of the driving while intoxicated conviction, Ken will most likely be
excluded from future coverage under his parent's polii1/2cy Loss - Marie is
attending a professioni1/2al meeting in a large city She rents a car at the
airport While driving to her hotel, she is involved in an accident with another
motorist when she suddeni1/2ly changes lanes without signaling The other
driver is seriously ini1/2jured and is later awarded a judgment of $250,000
The rental agency carries liability limits of $100,000 on the rental car
Comment - The loss is covered under the Non-Owned Auto Coverage of the
Gordon's PAP The first $100,000 of the judgment, however, is paid by the
rental agency's insurer as primary ini1/2surance The Gordon's PAP pays the
remaining $150,000 as Excess Insuri1/2ance

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