Exhibit 1005
`
`rumm
`"W mm
`
`NOV 21 1988
`
`U-"v.-'».__ .._...-u ur-
`IWAMI LIBRARY
`
`1988
`
`AUTOMOBILE
`
` INSURANCE
`SHOPPERS’
`GUIDE
`
`
`
`Florida Department of Insurance
`
`Liberty Mutual
`
`Exhibit 1005
`
`Bill Gunter, Insurance Commissioner
`
`Page 000001
`
`

`
`
`Comm-1'ss1'oner’s Message
`
`This guide is designed to help you control some of the
`costs associated with your automobile insurance.
`The guide explains the mandatory and optional auto in-
`surance coverages in Florida and discusses legislation
`adopted in 1988 that may effect your auto insurance
`coverage. Also included are consumer tips and rate com-
`parisons for 10 auto insurance companies authorized to
`sell insurance in the state.
`
`As a personal note, you may save hundreds of dollars
`by shopping around and comparing companies and poli-
`cies. You can also cut costs by tailoring your coverages,
`maintaining a good driving record, considering the type
`of car you drive and joining a car pool.
`And though price is an important factor, you should con-
`sider these factors as well: the services provided by the
`agents and brokers of the insurance company, the com-
`pany’s cl aims procedures, and the coverages the company
`offers to meet your needs.
`Automobile insurance is a costly but necessary part of
`everydaylife. I encourage you to use this guide to help
`you determine the best protection at the best possible price
`for your needs.
`If you have further questions after you read this guide
`and talk with licensed insurance agents, please‘ call the
`Insurance Consumer Hotline toll-free at 1-800-342-2762.
`
`Sincerely,
`
`Zfi1e,z:Jo;z1,
`
`INSURANCE COMMISSIONER
`
`Page 000002
`
`

`
`g
`
` __
`
`CONTENTS
`i Florida’s New Auto Legislation
`
`Types of Coverage
`Mandatory Coverage
`Who Mast Carry PIP
`What PIP Covers
`
`.
`Proof of PIP
`Enforcement of PIP and Property Damage Liability Requirements
`Optional Coverage
`Liability Coverage
`Bodily Injury Liability
`Property Damage Liability — Mandatory as of October 1, 1989
`Collision
`
`Comprehensive
`Uninsured Motorist
`Medical Payments
`Rental Car Coverage
`_
`Rental Reimbursement
`Accidental Death and Dismemberment
`
`mPolicy Cancellations and Non-renewals
`EPremiums
`
`How Premiums are Determined
`Shopping Around is Important Because Prices Differ
`Teen-age Drivers
`,
`Discounted Rates for Seniors
`
` Sample Rates
`
`Driver
`
`Coverage
`Premiums
`
`Areas
`
`Companies
`
`Elnsnrance Consumer Service Offices
`
`This consumer guide is distributed for educational purposes only and does not constitute an endorsement by the Depart
`ment of Insurance of any service, company or person offering any product or service
`
`Page 000003
`
`

`
`Florida’s New Auto Legislation
`
`
`F1orida’s law governing auto insurance was
`changed by the 1988 Legislature. These changes
`are intended to bring greater fairness to the auto
`insurance system, to crack down on those who
`drive without the required insurance,‘ and to
`reduce the cost of some auto insurance coverages.
`Parts of the law will take effect on the follow-
`
`ing dates:
`
`July 1, 1988 — Fees to reinstate a driver’s
`license suspended for driving without required
`insurance coverage will increase from $15 to
`$150 for the first offense, to $250 for the second
`and $500 for the third and all subsequent offenses
`within three years. Part of this money will go to
`pay for stepped-up state and local enforcement.
`
`October 1, 1988 — The new law makes it un-
`lawful for any attorney to send advertising direct-
`1y to motor vehicle accident victims for the pur-
`pose of filing a lawsuit or a claim. Attorneys who
`violate this provision face the penalties of a third-
`degree felony. Attorneys can, however, solicit
`such business through general advertisements.
`
`October 1, 1988 — Whenever an auto accident
`occurs, the investigating police officer will for-
`ward a written report within 24 hours of com-
`pleting the investigation to the Department of
`Highway Safety and Motor Vehicles. Each party
`involved in the accident must provide proof of in-
`surance to be included with all filed accident
`
`reports within 24 hours of the accident.
`
`April 1, 1989 — Insurance companies must re-
`port new policies, renewals, cancellations or non-
`renewals to the Department of Highway Safety
`and Motor Vehicles within 30 days of the effec-
`tive dates of new policies and within 45 days of
`policy renewals, cancellations or non-renewals.
`This will help the state make sure all drivers
`carry mandatory insurance.
`October I, 1989 — All drivers will be required
`to carry $10,000 Property Damage Liability
`coverage in addition to the already-mandated
`Personal Injury Protection coverage. The new re-
`quirement is designed to make sure a motorist
`who is at fault in an accident can pay for damages
`he or she causes to someone else’s property.
`October 1, 1989 -— PIP and Property Damage
`Liability policies must be for a term of at least
`6 months and may not be canceled, with certain
`exceptions, during the first one-third of the policy
`term.
`
`October 1, 1989 — The amount of Uninsured
`Motorist coverage you can receive from your in-
`surance will be reduced by the amount received
`from the at-fault driver. Ifthe at-fault driver does
`not have liability insurance or other means to
`pay for any part ofthe damage he caused, you
`may receive up to the full amount of your un-
`insured motorist coverage. Since insurance com-
`panies will pay less money for uninsured motorist
`claims, it is expected that uninsured motorist
`rates will go down and,
`therefore save you
`money.
`
`
`
`AUTOMOBILE INSURANCE 3
`
`Page 000004
`
`

`
`Types of Coverage
`
`Mandatory
`Coverage
`
`Who Must Carry PIP
`
`Ifyou own a motor vehicle with four or more
`wheels, you must carry PIP.
`Motorcycles and three-wheeled vehicles are ex-
`cluded from PIP requirements.
`Ifyoiir son or daughter is or. legal resident of
`Florida and attends college in another state and
`has a car, you must_have PIP coverage on the
`vehicle. However, if your child is a legal resident
`of the state where the college is located, the vehi-
`cle must be insured in accordance with the laws
`of that state.
`
`Any person who has a car in Florida for more
`than 90 days out of the last 365 is required to
`carry PIP. The 90 days do not have to be
`consecutive.
`
`Military personnel who must register their per-
`sonal cars in Florida must also carry PIP and
`beginning October 1, 1.98.9, Property Damage
`Liability.
`If you have recently moved to Florida, ask your
`agent about mandatory Florida coverage and
`rates.
`
`What PIP Covers
`
`PIP provides benefits without regard to who is
`at-fault. PIP pays 80 percent of reasonable
`medical expenses, 60 percent of lost income or
`earnings and up to $1,750 for funeral expenses,
`for a combined total of $10,000. -Some companies
`offer higher limits. PIP does not d-uplicate
`workers’ compensation benefits.
`Medical expenses covered by PIP include sur-
`gery, X-rays, prosthetic devices, necessary am-
`bulance expenses, and dental, rehabilitative,
`hospital and nursing services. Also covered are
`services permitted by Florida law for healing in
`accordance with religious beliefs.
`By law, you are allowed to buy a PIP policy
`with a deductible of up to "$2,000. A deductible
`is the amount you must pay from your own
`pocket before your insurance starts paying.
`
`If you already have adequate health and
`disability insurance you may decide to choose a
`higher deductible when buying PIP coverage.
`The PIP deductible applies only to your personal
`claims and the claims of dependents in your
`household who you list on your policy applica-
`tion. It does not apply to unrelated passengers
`or pedestrians who may be entitled to benefits
`-under your policy.
`Florida law specifically provides that benefits
`are not -to be paid when:
`0 a person operates your car without your
`consent;
`0 a person intentionally contributes to his own
`injury while committing a felony.
`For accidents which occur in Florida, PIP
`covers bodily injuries suffered by you and
`relatives who reside in your household; drivers
`who operate your motor vehicle with your per-
`mission and passengers in your vehicle unless
`they have their own PIP coverage; pedestrians,
`bicyclists and bystanders who are not required
`by law to have their own PIP and are residents
`of Florida.
`
`
`
`4 AUTUMOBILE INSURANCE
`
`Page 000005
`
`

`
`
`____,_..m_-...... _.- ._ _
`
`Tpes 1'Cr
`
`For accidents outside of Florida you only re-
`ceive PIP benefits if the accident occurs in the
`United States, its territories or Canada, and if
`you are in your own car. Relatives living in your
`household are covered when they are passengers
`in your car and do not have their own PIP
`coverage. Any other passengers are not covered
`by your PIP.
`
`No-fault insurance and
`Personal Injury Protection (PIP) are
`the same thing and these terms will
`be used interchangeably in this guide.
`The law requires this coverage for
`most motor vehicles.
`
`m
`
`Proof of PIP
`
`When you buy car registration tags or renewal
`decals, you must show proofof no-fault insurance.
`Proof may be an insurance policy, binder, certi-
`ficate of insurance or a uniform identification (ID)
`card.
`A certificate of insurance or sworn affidavit is
`permissible as proof if it bears this disclosure:
`“Giving false information in order to obtain a '
`vehicle registration certificate is a criminal of-
`fense under Florida law. Anyone giving false in-
`formation on this affidavit is subject to prosecu-
`tion.” In addition, the driver must provide the
`name of the insurance company issuing the
`policy, the policy number and the make and year
`of the vehicle to be registered.
`All motorists must have proof of PIP coverage
`with them when they drive a motor vehicle. That
`proof may be an I.D. card, a valid insurance
`policy, an insurance policy hinder or a certificate
`of insurance. This will also be true for Property
`Damage Liability coverage beginning October I,
`I 989.
`
`If a motorist has been charged with failure to
`carry proofof PIP coverage and fails to prove that
`he or she had coverage at the time of the viola-
`tion, the driver’s license and vehicle registration
`will be suspended immediately.
`Fees to reinstate a driver’s license after revoca-
`
`tion for driving without required insurance
`coverage are $150 for the first offense, $250 for
`the second and $500 for the third and all subse-
`quent offenses committed within three years.
`
`If a driver presents fraudulent proof of PIP
`coverage, he or she may be charged with a first-
`degree misdemeanor.
`
`Enforcement of PIP and Property
`Damage Liability Requirements
`
`To assure that motorists comply with the laws
`that require PIP and Property Damage Liabil-
`ity insurance, a number of new enforcement
`mechanisms have been created.
`
`The Department of Highway Safety and Motor
`Vehicles (DHSMV) is creating a computerized
`record of all insurance policies currently in force.
`This new computer system will also include in-
`surance company notifications to the DHSMV of
`all insurance policy renewals, non-renewals and
`cancellations, and DHSMV suspension of drivers’
`licenses and registrations’ of persons who fail to
`obtain replacement coverage.
`Law enforcement officers will be required to
`report all accidents to DHSMV.
`Affidavits submitted to DHSMV as proof of in-
`surance must be audited.
`
`Fees for reinstating a driver’s license for failure
`to maintain required insurance coverages in-
`creased July 1, 1988, from $15 to $150 for the first
`offense, to $250 for the second and $500 for the
`third and all subsequent offenses within three
`years.
`License plates of motor vehicles will be seized
`by law enforcement officers if the owner is
`operating a vehicle with a registration that has
`been under suspension for 30 days.
`Effective October 1, 1989, PIP and property
`damage liability policies must be for a term of
`at least 6 months and may not be cancelled, with
`certain exceptions, during the first third of the
`policy term.
`
`Optional Coverage
`
`PIP covers bodily injury, not vehicle repair or
`property damage. That is why most car owners
`buy extra coverage. The basic optional auto in-
`surance coverages include bodily injury and pro
`perty damage liability, comprehensive, collision,
`uninsured motorist protection, medical payments,
`towing and rental reimbursement. Remember,
`beginning October 1, 1989, Property Damage
`Liability will be mandatory in addition to
`PIP coverage.
`
`
`
`AUTOMOBILE INSURANCE 5
`
`Page 000006
`
`

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`
`
`yps 0 V81‘.
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`sq .—.
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`-._- - -- ."-'3
`
`Liability Coverage
`
`Bodily Injury Liability
`
`Liability insurance protects you against
`financial loss resulting from bodily injury or pro-
`perty damage you cause to others and for which
`you are legally liable. Although liability in-
`surance is not required except under certain con-
`ditions, most Florida drivers include it as part
`of their auto insurance coverage.
`Liability insurance is mandatory for drivers
`who are convicted of certain traffic violations
`
`such as driving under the influence of drugs or
`alcohol, accumulating driving record points and
`habitual violation of traffic laws.
`
`Under the provisions of the Florida Financial
`Responsibility Law (Section 324.051, Florida
`Statutes), a driver who is involved in a reportable
`accident also may be required to carry liability
`coverage. Information about this law may be ob-
`tained from: Bureau of Financial Responsibility,
`Department of Highway Safety and Motor Ve-
`hicles, Neil K-irkman Building, Room A-208,
`2900 Apalachee Parkway, Tallahassee, Florida
`32301, (904) 488-7135.
`Liability insurance is usually sold with either
`single limits or split limits. An example of split
`limits coverage is the so-called 10f20)‘10 liabil-
`ity policy. With such a policy, you would receive
`up to $10,000 protection for injuries you cause
`to one person; up to $20,000 for injuries to all per-
`sons in an accident; and up to $10,000 in property
`damage protection.
`Single limits coverage, on the other hand,
`spreads the coverage up to a stated amount no
`matter how many people are injured or how
`much property is damaged. For example, a
`$30,000 single limit liability policy would pay no
`more than $30,000, regardless of the amount for
`which you are liable.
`Of course, higher levels of split or single limits
`coverages are also available.
`If you carry liability insurance and are sued,
`your policy will pay all sums for which you may
`be legally liable (up to your policy limits) aris-
`ing out of the ownership, use and maintenance
`of your motor vehicle. Your insurance company
`will settle or defend any claim or suit asking for
`auto accident damages. However, the defense
`duty of your insurance company ends when your
`policy limit
`in any one accident has_ been
`exhausted.
`
`Florida’s no-fault law prevents many bodily in-
`jury lawsuits which otherwise would arise from
`auto accidents. However, you may still sue or be
`sued under certain conditions.
`
`If you are at fault in an accident, the injured
`person may sue you for expenses in excess of the
`full PIP benefits or for serious and permanent
`injury. By law, injuries which are considered
`serious and permanent are limited to:
`0 significant and permanent loss of an important
`bodily function;
`0 significant and permanent scarring or dis-
`figurement;
`0 permanent injury within a reasonable degree
`of medical probability, other than scarring or
`disfigurement;
`0 death.
`
`Property Damage Liability
`
`Beginning October 1, 1989, Property Damage
`Liability will be mandatory coverage along with
`PIP. All drivers will be required to carry $10,000
`Property ‘Damage Liability coverage.
`'
`Property Damage Liability covers you against
`financial loss resulting from property damage
`you cause to others and for which you are legally
`liable.
`
`Collision
`
`Collision insurance pays for repairsto your car
`-— regardless of who is at fault — when it is
`damaged in a collision with another vehicle or
`object, or as a result of turning over. Collision
`coverage is usually sold with a deductible, an
`amount you must pay from your own pocket be-
`fore your policy pays. Generally, the higher the
`deductible, the lower your premium will be.
`Some people decide not to carry collision in-
`surance on an older model car which is fully paid
`for and has no lien against it. You might want
`to discuss this cost-cutting measure with your in-
`surance agent or company. But remember, if your
`car is damaged in an accident caused by you or
`an uninsured driver and you do not carry colli-
`sion insurance, you will be responsible for the
`repair of your own car.
`
`
`
`6 AUTOMOBILE INSURANCE
`
`Page 000007
`
`

`
` .
`Types of Coverage
`
`a windshield is paid without a deductible.
`Mechanical breakdown is excluded.
`
`Both comprehensive and collision coverage will’
`probably be required by the lending institution
`which finances your vehicle, even though these
`coverages are not required by low in order for you
`to own a car. However, it is illegal for the lender
`to force you to place your insurance with any par-
`ticular co mpany or agent as a condition ofexten-
`ding credit to you. If you do not obtain insurance,
`your lender may, after notifying you, place cover-
`age to protect the lender which will only pay the
`balance of the loan. This insurance must be paid
`by the owner before the title is released.
`
`Uninsured Motorist
`
`Uninsured Motorist coverage pays for the
`medical expenses and lost wages suffered by you
`and your passengers in an accident caused by
`another driver which exceeds your Personal In-
`jury Protection and medical payments coverage.
`UM only pays if you are hit by someone else and
`they are at fault.
`-
`Expenses are paid in the following order: first,
`your PIP and medical payments coverage is used;
`then, if necessary, the at-fault driver’s bodily in-
`jury liability coverage applies; then, in addition,
`your UM coverage pays for losses over and above
`the liability coverage of the driver who ca'used
`the accident.
`
`_
`
`This last provision, however, will soon be
`changed so that the full amount of your UM
`coverage will not be added to the at—faul1: driver’s
`liability coverage. Under a new law effective Oc-
`tober 1, 1989, the amount of money recovered
`from the atfault driver will reduce the maximum
`
`amount you can receive under your UM cover-
`age. If the at-fault driver does not have liability
`insurance or other means to pay for any part of
`the damage he caused, you may recover up to the
`full amount of your UM coverage. Insurance com-
`panies will have to pay less money for UM
`claims, therefore it is expected that UM rates will
`go down and save consumers money.
`Your insurance company will automatically
`add UM coverage to your policy, unless you in-
`struct otherwise,
`in an amount equal
`to the
`coverage you purchase for bodily injury liability.
`(Bodily injury liability pays the medical expenses
`for injuries you cause to others.) You may reject
`UM coverage altogether or select lower limits,
`
`Comprehensive
`
`Comprehensive insurance pays for losses from
`incidents other than a collision. Examples would
`be fire, theft, windstorm, vandalism, accidental
`glass breakage and collision with an animal.
`Comprehensive insurance also covers such un-
`common events as a tree falling on your car. Like
`collision insurance, comprehensive coverage may
`be sold with a deductible. However, damage to
`
`
`
`AUTOMOBILE INSURANCE 7
`
`Page 000008
`
`

`
`._ .
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`.
`
`.. T...
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`'r_..'
`
`s 0 Coverag
`
`but this must be done in writing. Your company
`must also enclose a form with your policy re-
`newal notice which explains UM coverage and
`the options available to you.
`If you decide to carry UM, the minimum
`coverage you may purchase from most companies
`is $10,000 per person and $20,000 per accident
`(known at “10a'20 limits”).
`You are purchasing “stackable” uninsured
`motorist coverage unless your insurance com-
`pany offers, and you choose to purchase “non,
`stackable” coverage.
`Stackable coverage means that the coverage
`limits for each motor vehicle insured under the
`policy are added together. For example, if you in-
`sure three automobiles and you have purchased
`stackable UM coverage of $10,000 per person and
`$20,000 per accident, you are actually obtaining
`coverage of $30,000 per person and $60,000 per
`accident.
`
`Non-stackablecoverage, available at a reduced
`cost, only pays up to the limits for the particular
`vehicles insured.
`
`Any vehicle changes in your policy could affect
`your stackable coverage. Ask your agent about
`this.
`
`Medical Payments
`
`Medical Payments coverage will pick up the 20
`percent of medical expenses not covered under
`PIP, up to the limits purchased. It could cover
`additional expenses in excess of PIP limits. De-
`pending on your personal financial situation and
`your insurance needs, you may or may not want
`to buy this coverage.
`
`Rental Car Coverage
`
`Check your policy before you rent a car. If
`you’re not sure rental vehicles are covered, call
`your insurance agent or the insurance company
`insuring your vehicle for information.
`Rental car companies often sell Collision
`Damage Waiver for an extra fee. If your policy
`covers damage to rental cars driven by you, CDW
`is probably not necessary. The CDW, although
`similar to insurance, is not insurance and does
`not fall under the regulatory authority of the
`Department of Insurance.
`Ifyou purchase CDW, you will be released from
`the obligation to pay collision damages if the car
`is not returned in the same condition that it was
`rented.
`
`Otherwise, according to most rental contracts,
`you are personally liable for any damages to the
`vehicle. That claim may be as high as the value
`of the car you rented, subject to the terms and
`conditions of the rental contract.
`
`CDW is sold by automobile rental companies
`and ranges from $5 to $15 or more per day, a cost
`added on to the daily rental fee and other
`charges.
`Consider the CDW if you have no automobile
`insurance or if your personal automobile in-
`surance does not cover the cost of collision
`
`damage to rental vehicles. Other insurance
`plans, including those oifered by credit card com-
`panies and some travel insurance programs, may
`cover collision damage to rental vehicles.
`
`Rental Reimbursement
`
`Ifyou are in an accident with your own car and
`it is not drivable and your policy includes Ren-
`tal Reimbursement Coverage, you will be reim-
`bursed for car rental according to the terms of
`the policy. If another driver was at fault, that
`driver's liability coverage may reimburse you for
`renting a vehicle similar to your own. Check this
`with your agent and the insurance adjuster.
`
`Accidental Death and
`Dismemberment
`
`Accidental death and dismemberment coverage
`is often offered along with PIP coverage. It is
`against the law for an insurance agent or com-
`pany to insist that you buy accidental death
`coverage, a motor club membership or any other
`type of insurance as a condition for receiving a
`P1P policy. It is also against the law for a com-
`pany representative to add such a motor club
`membership or other coverage onto your policy
`without your permission.
`
`Policy Cancellations
`and Non-renewals
`
`When a company cancels your policy during
`the time it is in effect, it is known as a cancella-
`tion. Non-renewal occurs when your policy is not
`continued by the company at the end of the policy
`period.
`
`
`8 AUSVDMOBILE INSURANCE
`
`Page 000009
`
`

`
`If you have been issued a binder pending ac-
`ceptance ofyour application, the company must
`give you five days prior notice before cancelling
`the binder. A binder is proof of insurance un-
`til you receive your policy-
`Once your application has been accepted, your
`auto insurance company may cancel your policy
`during the first 60 days it is in effect if the com-
`pany determines the risk of insuring you does not
`meet the company’s underwriting requirements,
`or the company gives you any other valid reason
`for cancellation.
`
`After your policy has been in effect for 60 days,
`a company may cancel your policy only for one
`or more of the following three reasons:
`= nonpayment of premiums- the company must
`give you a 10-day notice;
`0 material misrepresentation or fraud -the com.-
`pany must give you a 45-day notice;
`O the suspension or revocation of your drivers’
`license or motor vehicle registration or that of
`any other driver who lives with you or customar-
`ily operates an automobile insured on your policy
`the company must give you a 45-day notice.
`If you cancel your policy, most companies use
`a formula which refunds 90 percent of your un-
`
`used premium. If the company cancels your pol-
`icy, it must return all of the unused premium.
`Ifa company decides not to renew your policy,
`it must notify you at least 45 days before your
`policy expires. A company may not refuse to
`renew your coverage solely because of your sex,
`occupation, marital status, residence, military
`service, national origin or physical handicap that
`does not impair driving ability.
`The company cannot refuse to renew your lia-
`bility coverage solely because you were involved
`in an accident, unless the company incurred a
`loss and you were at fault, or unless you have ‘
`three accidents in a three—year period. This is ex-
`plained in more detail in the Premiums section.
`Effective October 1, 1989, PIP and Property
`Damage Liability policies must be for a term of
`not less than 6 months and as to those specific
`coverages, may not be canceled during the first
`one-third of the policy term. Exceptions are total
`destruction of the vehicle or transfer of owner-
`
`ship. A policy that is not ‘a renewal policy and
`that has been in effect for less than 60 days may
`be canceled by an insurer for reasons other than
`nonpayment of premium.
`
`AUTOMOBILE INSURANCE 9
`
`Page 000010