Vehicles have gone through some intense changes throughout the past few years. What was widely regarded as science fiction is now becoming possible. As of September 1, 2018, Insurance Services Office, Inc. (ISO) released revised policy language. This new language paves the way for issues the auto industry is facing and will affect all auto insurance policies in the coming years.
Here are a few of the newest policy language changes implemented by ISO.
Newly Acquired Auto Insurance
Prior to the language changes, a “newly acquired automobile” replaced a vehicle that was listed in the declarations. This new vehicle took over the coverage, in a sense and was protected beyond “Coverage for Damage” to the automobile. This was not something that the insurer would have to specify.
However, with the mounting differences in insurer’s situations, as well as symbol and rating factors, this has changed. Under the new language, a re-evaluation of the policy is in order. This could raise or lower a premium’s price. Therefore, insured individuals must inform their respective auto insurance agency for any acquired vehicle. Otherwise, only “coverage for damage” will apply.
Excluding Public Conveyance
Public Conveyance is for those who are using their vehicle for charitable or volunteer purposes. ISO has changed the language for this portion to broaden coverage. This allows insured individuals protection while they are doing good for their community. This helps the insured party rest easier when riding around for a charitable or volunteer position.
For those who race, it was normal for liability coverage to be excluded while inside a racing facility. This exclusion covered all the bases of working on vehicles, preparing for races, and the races themselves. To combat this, racing organizations started training drivers. The hope was that the educational skill development that was obtained would lessen the liability and ease the exclusions.
Yet, the new language that was revealed by ISO indicates only adds an exclusion for driver skill training or driver skill events. Even though this is an educational initiative, aimed at keeping the drivers safe, it is still a substantial risk that insurance companies will not take.
According to the revised language within the ISO, The Jetsons would have to find a specialty policy. The new language identifies a flying car exclusion. These vehicles, (which are sadly still fictional) would provide too much foreseeable risk. Therefore, the manual’s response is that no regular insurance company would be required to shoulder such a burden. Instead, when the time comes, owners of such vehicles would need to be accommodated by a specialty policy.
Key Fob Revision
Key fobs are becoming more important to a car than the key, with some even extinguishing the traditional key completely. That is all well and good until the insured loses that key fob and must spend a couple hundred to replace it.
Fortunately, the new language inherent in the IOS manual explains that reasonable expenses will now be covered. Reasonable expenses include services to access a covered car if the key or key fob is lost or stolen. This new language is intended for a per-vehicle basis and helps to ease the distress of losing a key fob.
Pet injury coverage
ISO has also endorsed pet injury coverage in the new policy changes. The new parameters for coverage state the pet must be in the front seat, in a covered car. If this is true, insurance companies will provide coverage for veterinary expenses or services incurred in the accident. Additionally, the coverage that the insured possesses must be more than Collision and Collision Coverages.
The outdated language accounted for transportation expenses of $20 per day, up to $600. However, with inflation and related market influences, the ISO decided to raise that limit. Currently, the transportation expenses are $30 per day with a maximum limit of $900. This level is supported overall by the U.S. rental car market trends.
Although to take advantage of the trends, the insured are responsible for submitting required statements as often as possible. This statement must be recorded by both parties, to legitimize the claim. Having a recording of both parties also allows for increased flexibility and accountability with insurer’s claims.
Child Restraint Systems
The Child Restraint System Coverage Endorsement is another improvement to the ROI statement language. This endorsement enables insurers to easily adhere to the National Highway Traffic Safety Administration’s recommendation that regarding car seats. The administration advises that car seats are replaced after a collision. This endorsement covers the cost of replacing a car seat after an accident.
To close, this new language, issued by ROI has many interesting highlights. The newly revised personal auto forum is the bedrock of auto insurance industry standards. Therefore, it is always best for agents and brokers to read the report in its entirety. Yet, these addendums provide a quick update on some of the most prevalent changes in the industry.