An automobile insurance policy may contain a set-off clause, which provides that an insured cannot recover bodily injury benefits under both the liability coverage part and the underinsured motorist coverage part of the policy. When an insured fully recovers his or her losses under the liability provision of an automobile insurance policy, the insured could not then seek to recover under the underinsured motorist provision of the same policy.
Motor vehicles are valuable items of personal property that can be readily moved from one place to another if they come into the possession of persons other than their rightful owners or operators. They are highly useful in an intact condition, and they can also be disassembled in order to obtain and sell their component parts. As a result, thefts of cars and trucks occur in large numbers in the United States. Theft coverage in auto insurance policies has been devised as a means of protecting the owners and operators of motor vehicles from the economic losses caused by auto theft.
When an insured files a lawsuit against an insurance company, the insurance company can file a counter claim against the insured to reduce the amount of the insured's claim by an amount that the insurance company claims that the insured owes to it. The amount owed can be unpaid premiums or funds received by the insured from other sources that would exceed the amount of the insured's loss. This is called a setoff, an offset provision, or a benefit-set off provision. In the case of no-fault insurance, setoffs exist for a number of benefits that an insured could obtain due to an automobile accident.
A mention of the topic of auto insurance generally brings to mind the myriad policies that cover the individual owners and drivers and individual cars and trucks that operate every day on the streets and highways of the United States. In many cases, though, fleets of greater or lesser numbers of vehicles owned by a single entity and operated by many different individuals are sent out on the roads in order to carry out the business of their owners. The existence of such fleets creates unique issues in the area of motor vehicle insurance.
The everyday operation of millions of cars and trucks on the streets and highways of the United States, and the massive resulting toll in deaths, personal injuries, and property damage caused by motor vehicle accidents, have inevitably created a situation in which the manufacturers and sellers of motor vehicles are implicated as potential defendants in legal actions seeking compensation for the losses arising from such accidents. Products liability law, a subset of the branch of the legal system called tort law, provides the legal standards for determining the potential liability of motor vehicle manufacturers and their dealers in such cases. (The principles of products liability law also apply to non-automotive products, but our discussion here will focus on the law of products liability as it relates to motor vehicles.)