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Fundamentals of Risk and Insurance, 11th Edition by Therese M. Vaughan, Emmett J. Vaughan

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CHAPTER OBJECTIVES

When you have finished this chapter, you should be able to

  • Explain the special provisions of tort law applicable to automobiles
  • Explain the principles of vicarious liability and the special provisions applicable to guests
  • Explain the legal requirements imposed by the states regarding automobile liability insurance
  • Explain the no-fault concept and the basic philosophy on which this concept is based, and evaluate the arguments for and against no-fault laws
  • Explain the differences among the approaches to reform of the automobile reparations system that have been adopted by the states
  • Discuss the various systems for providing insurance to high-risk drivers
  • Discuss the automobile insurance classification system and how rates are affected by various underwriting factors

The automobile is the most widely owned major asset in the United States. It is also one of the chief sources of economic loss. The ownership or operation of an automobile exposes the individual to many sources of loss: a person may be killed or injured while operating a car, or may be struck by one, with resulting medical expenses and loss of income; one may be held legally liable for injuries to others or for damage to the property of others; the car may be damaged, destroyed, or stolen.

In this chapter, we begin our study of automobile insurance by examining the legal principles governing the automobile's ...

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