Part F: Personal Auto Policy (PAP) Provisions Target

As we wade through the maze of personal auto policies, it helps Target employees understand the fine print and take proactive steps like defensive driving programs to prepare for retirement, 'said Sullivan. A comprehensive coverage is 'like wearing a seatbelt - it is a no-brainer for safety,' says Kevin Landis, of The Retirement Group, a division of Wealth Enhancement Group.

A current personal auto policy and defensive driving courses are critical for Target employees approaching Retirement, says Paul Bergeron of The Retirement Group, a division of Wealth Enhancement Group. This proactive approach may help reduce risks and help with sanity on the way to and through retirement.

In this article we will discuss:

1. Older Drivers' Safety Measures: Attention to awareness & personal auto policies for Target employees approaching retirement - intersection safety & defensive driving.

2. Understand Auto Policy Provisions: Specific sections and clauses of a personal auto policy that impact coverage like policy modifications and legal requirements.

3. Prevention Strategies & Policy Management: Discussing defensive driving courses for seniors and managing and adapting auto insurance policies to changing personal and legal needs.

Among older adults ages 65 and older, more fatal accidents at intersections are likely, according to a National Highway Traffic Safety Administration study. Actually, they were 22% of all intersection fatalities in 2018. For Target employees nearing retirement, driving safely means knowing your surroundings, following traffic laws and avoiding distractions. But a good personal auto policy (PAP) can certainly help in the event of an accident as well.

State residents and especially Target employees should know the provisions of their personal auto policy. We've compiled some clarifications on PAPs and how they affect you.

What Is It?

You probably have a vehicle if you work for Target. Part F of your personal auto policy (PAP), if you have one, contains provisions that limit and qualify coverage in other sections. The insurer may deny coverage if the conditions in these provisions are not met.

Sections F and G cover additional issues including insolvency / policy changes / fraud / legal action against the insurer / insurer's right to recover payment / policy period / territory / termination / transfer of your interest in the policy and effect of having two or more auto insurance policies /.

Bankruptcy

If you go bankrupt or insolvent, the insurance company has no obligation to release your policy obligations. In some indemnification contracts, however, bankruptcy or insolvency releases the insurer of its payment obligation. Part F says those circumstances would not relieve your PAP insurer of its payment obligation.

Changes to Your Policy

A contract between you and the insurance company is called an insurance policy. Thus the terms of your policy cannot be changed or waived without written endorsement. Target employees need to check that everything they want covered by their policy is in the actual contract.

You or your insurer may wish to modify your PAP. If any of your information has changed - like your address or you added your 16-year-old son to your policy - the insurer could raise your premium accordingly. Such alterations may raise your premiums. Any premium increase must be proportionate.

You pay premiums from October 1 through September 30 on a new Porsche 911 on December 25, but the insurance company may increase them from December 25 through September 30 if you have a PAP in effect from October 1 through September 30.

Limited exceptions to the requirement that policy changes be in writing exist. If the insurance company changes something that expands coverage under your policy without charging an additional premium, that change will take effect immediately on the effective date in your state.

Fraud

False statements or fraudulent activities regarding an accident or loss covered by your policy are grounds for coverage loss.

Legal Action Against Insurer

In General

Several prerequisites apply if you plan on suing your insurance company. You cannot sue unless you meet the policy's requirements.

Part E: Duties Following an Accident/Loss outlines certain conditions and responsibilities that must be met. They include paying premiums, advising the insurer of a claim, and cooperating with the insurer. If you have not fulfilled these obligations, you can usually not sue your insurer.

Under Part A--Liability Coverage

Some additional requirements under Part F apply if you sue your insurer for coverage under Part A: Liability Protection. To bring an action under the liability section of your PAP, your insurer must agree in writing that you are obligated to pay (you appear liable) or that the amount has been determined by a court judgment (you are found liable).

This simply means that before your insurer is required to pay a third party under your liability coverage, you must appear liable to another person (to the insurer) or be found liable at trial.

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Other Persons or Organizations

No one else may sue your insurance company to establish liability under your policy. Your insurer and you both have a contract under which a third party may not sue your insurer to determine whether you are liable.

But still people sue the insurance company and the person they say caused the damage. This is because the insurance company pays for the judgment if the other party is found liable. This is also linked to the insurance company having to decide whether it should pay the claim.

Insurer's Right to Recover Payment.

In General

If your insurer pays you money under your policy, they can sue the person or entity liable to you for reimbursement. It is called 'the right of subrogation.' Subrogation means the injured party should not be compensated twice for injuries. This is where an insurer assumes your legal rights when the loss occurs. So they put themselves in your shoes, so to speak, to avoid paying for unnecessary damages.

Bryce has collision coverage on his automobile. But Liz is culpable for the tragedy in which he is involved. His collision coverage covers vehicle damage. Thus the insurance company can sue Liz for the amount it paid Bryce for subrogation (or 'stepping into Bryce's shoes'). Since Bryce has been subrogated by the insurer, he cannot sue Liz directly for the damage to his car.

Your policy also says you must do everything necessary to let the insurance company exercise its rights and not interfere with them in any way.

Against A Person With 'Your Covered Auto'

For the purposes of Part D: The right of subrogation does not apply to a person who has used 'your covered auto' while reasonably believing he or she was authorized to do so. By definition, your covered auto means any vehicle listed on your insurance policy's Declarations Page.

Example(s): Bryce borrows Liz's vehicle with her permission and crashes. The auto Liz drives has collision coverage. The insurer pays Liz compensation for the damage Bryce did. Liz's insurance company cannot subrogate against Bryce for a payment it made to Liz because Bryce reasonably believed he had permission to use Liz's vehicle. You Get Damages Back from Another Person.

Even if you have already recovered damages from another party, your right of subrogation remains. IF the insurance company pays you under your PAP and you recover damages from another party, you must meet the following requirements:

The recovery proceeds should be held in trust for the insurance company. Repay the insurance company for its payment in full.

The reasoning is the same as before: insurance makes you 'whole,' not allows you to profit from your accident. Duplicate payments could be considered insurance fraud and future coverage denied.

Policy Period and Territory

Your Personal Auto Policy is time and location restricted. Your policy covers incidents and losses only within the policy territory and during the policy period specified on the Declarations Page.

The policy territory generally comprises the following:

The United States, its territories and possessions. Puerto Rico Canada

Your PAP also applies when 'your covered auto' is transported between locations within the policy territory.

It happens often that Mexico is not in your policy territory - and Target employees should know. Once you enter Mexico, your PAP no longer covers you so you should buy separate insurance beforehand.

Mexican insurers often insure short trips into Mexico at the border.

Termination

In General

Your PAP contains termination and non-renewal provisions during the policy period and at the end of the policy term. These provisions typically are regulated under state law - check with your local government for more details.

Cancellation

During the policy period either you or your insurer can terminate coverage.

The insured named on the Declarations Page may cancel the PAP in either of the two methods below.

Return the insurance policy to the insurer. Documented notice to the insurance company of the cancellation date in advance.

The insurance company may terminate the policy, under state law, by mailing a notice of cancellation to the named insured listed on the Declarations Page, along with:

Cancellation for nonpayment of premium. This policy is in effect unless otherwise noted within the first 60 days - it is not a renewal nor a continuation. All other cases require 20 days' notice. After the policy is in effect for 60 days or more, special cancellation provisions apply. The insurer generally may terminate for one of the following three reasons:

If obtained by material misrepresentation, the policy is null and barred.

If you, a driver who lives with you or a driver who routinely uses 'your covered auto' has had their driver's license suspended during the policy period or within a year of the effective date of the policy if the policy is less than one year (e.g., a six-month policy), you will pay the deductible.

Non-renewal

After a policy term ends, the insurance company may choose not to renew your auto policy. For any legal reason authorized by state law they may do so. A higher risk makes most insurance companies not renew. When you have an accident, get a traffic ticket or add a young/new driver to your policy, your risk factor increases.

Typical policy language requires that the insurer provide 20 days' notice before the expiration of the policy period if it does not intend to renew. State-by-state regulations regarding policy cancellation differ. See your insurance agent or financial advisor for additional details. Questions about policy coverage for Target employees? Contact The Retirement Group.

Automatic Termination

You lose coverage when you decline an offer from the insurance company to renew it. Nonpayment of the renewal or continuation premium is equivalent to declining the renewal offer. A new policy for 'your covered auto' will expire on the effective date of your new coverage. This is to prevent duplication of coverage for a loss occurring between policy periods.

Example(s):

The former Bryce policy expires December 31. Bryce buys a new insurance policy which takes effect December 15. Its previous policy expires December 15 and covers only up to December 31.

Other Termination Provisions

They set out administrative details like how the insurer must deliver the policy to you, when you are entitled to a refund, and when your cancellation takes effect. State regulations in many cases supersede those of your policy. Find out from your insurer what your state policies mean for you.

Your Interest in the Policy is Transferred.

In General

No person may assign or transfer personal insurance policies without the insurer's written consent. You must have certain character, credit and driving requirements when you apply for insurance.

The policy coverage and cost are determined by your information. You could transfer the policy at your discretion and the insurer would have no control over who and under what conditions you would insure. That would obviously make underwriting a nightmare.

Death of the Policyholder

Your personal auto policy would continue to cover your surviving spouse and the attorney for your estate should you die. Whether or not your spouse was living with you when you died, coverage will continue as if your spouse were the named insured. The only person covered is the legal representative of your estate who is legally obligated to maintain or use 'your covered auto.' Your spouse or attorney is covered until the policy period ends.

Two or More Policies

If you have several policies from the insurer that covers your PAP, the insurer is generally limited to the maximum liability allowed by each policy. That keeps you from stacking the individual limits.

Example(s):

Bryce has a USD 100,000 PAP on his auto. ANOTHER PAP from the same insurer covers his car for USD 200,000 in liability. Combined liability for the automobile and vehicle is USD 200,000 if both are involved in an accident. Bryce cannot 'stack' the two policies to get USD 300,000 in liability coverage.

Navigating your personal auto policy is like driving a car on a road with many speed limits, stop signs and detours. Understanding rules of the road will prevent accidents or unexpected surprises. Like you would prepare for a long drive by checking your vehicle condition and route, you should also review your PAP to make sure it covers everything you need before you go out on the road. And like you would drive carefully through intersections, older adults should be wary of the provisions and limits of their PAP.

Added Fact:

One study published in the Journal of Aging & Health in 2019 concluded that older adults participating in defensive driving programs were significantly less likely to be involved in accidents at intersections. They train older adults to drive safely - including hazards perception, decision making and attention control. With a specialized defensive driving program for seniors, Target workers nearing retirement can improve their driving skills and reduce the risk of intersection-related accidents, helping them make the transition into retirement safer and more confident (source:). Journal of Aging and Health, 2019).

Added Analogy:

Navigating through the provisions of a Personal Auto Policy (PAP) is like driving on a maintained highway in your retirement. Like planning your route, obeying traffic laws, and keeping your auto in good condition, knowing your PAP is important for a smooth ride into retirement. Every provision points you to safe and protected travels. From bankruptcy preventing you from releasing your insurer's payment obligation to the insurer's right to recover payment like a toll booth, these provisions protect your interests. Just as you adjust your speed to match the road conditions, Target workers approaching retirement should consider policy changes, fraud prevention and defensive driving programs to avoid accidents at intersections. By following these provisions, you can travel the road to retirement confidently knowing your PAP will be your constant companion and provide coverage and peace of mind as you travel.

Sources:

1. National Highway Traffic Safety Administration. 'Older Drivers.' NHTSA, www.nhtsa.gov/road-safety/older-drivers . Accessed [date].

2. Federal Highway Administration. 'Intersection Crashes Among Older Drivers.' FHWA, www.fhwa.dot.gov/intersection_crashes_among_older_drivers . Accessed [date].

3. National Highway Traffic Safety Administration. 'Traffic Safety Facts.' NHTSA, www.nhtsa.gov/data/research . Accessed [date].

4. Federal Highway Administration. 'Older Drivers at a Crossroads.' FHWA, www.fhwa.dot.gov/older_drivers_at_crossroads . Accessed [date].

5. National Highway Traffic Safety Administration. 'Advanced Driver Training Courses.' NHTSA, www.nhtsa.gov/advanced_driver_training_courses . Accessed [date].

What are the key benefits provided by Target Corporation's Personal Pension Account and Traditional Plan for employees approaching retirement, and how do these plans ensure financial security during retirement years? Understanding the synergy between these two plans is essential for retirees, as they work together alongside Social Security and personal savings to replace a portion of an employee's paycheck after retirement.

Key Benefits of the Personal Pension Account and Traditional Plan: Target Corporation's pension plan includes two components: the Personal Pension Account and the Traditional Plan. These plans work in tandem to replace a portion of an employee's paycheck during retirement. The Personal Pension Account provides pay credits and interest that accumulate over time, while the Traditional Plan uses a final average pay formula. Together with Social Security and personal savings, these plans help ensure financial security in retirement(Target Corporation_Dece…).

How can employees elect different payment options, such as the Single Life Annuity or the Joint and Survivor Annuities, within Target Corporation's pension plans? It is crucial for employees to grasp not only the financial implications of these choices but also the necessary spousal consent required when designating a joint annuitant, particularly if the chosen joint annuitant is not the employee's spouse.

Payment Options and Spousal Consent: Employees can elect different payment options, including the Single Life Annuity, which provides the highest monthly benefit and ceases at the retiree’s death, or the Joint and Survivor Annuity, which continues payments to a surviving spouse. To elect a non-spouse as a joint annuitant, spousal consent is required, and this must be notarized to ensure compliance with plan rules(Target Corporation_Dece…).

In what circumstances might benefits not be paid under the Traditional Plan, and what steps can employees take to ensure they remain eligible for their pension benefits upon termination of employment? Target Corporation's policy outlines several scenarios where benefits could be denied, making it necessary for employees to be proactive in understanding their rights and responsibilities concerning plan participation.

Circumstances for Denial of Benefits under the Traditional Plan: Benefits under the Traditional Plan may not be paid if an employee leaves before becoming vested (less than three years of service). Employees should ensure they meet the vesting requirements and maintain eligibility by avoiding termination before they reach the minimum service period(Target Corporation_Dece…).

What procedures should employees follow to report changes in marital status, address, or beneficiaries to ensure compliance with the requirements of Target Corporation's pension plan? Employees must understand the importance of timely reporting these changes to avoid potential issues with their retirement benefits and ensure that their pension plan information remains up-to-date.

Reporting Changes in Marital Status or Beneficiaries: Employees must promptly report changes in marital status, address, or beneficiaries to Target's Benefits Center to ensure their pension records remain up-to-date. Failing to do so can lead to delays or issues in processing pension benefits(Target Corporation_Dece…).

How does Target Corporation determine the final average pay used to calculate retirement benefits under its pension plans, and what factors may affect this calculation? Employees nearing retirement should be fully informed about how their compensation is considered in determining their pension benefits, including aspects such as bonuses and overtime that may influence their final average pay calculation.

Final Average Pay Calculation: Target Corporation calculates final average pay based on the five highest years of earnings out of the last 10 years of service. This includes regular pay, overtime, bonuses, and commissions but excludes items like workers' compensation or long-term disability payments(Target Corporation_Dece…).

How can employees begin the process of rolling over their Target 401(k) accounts into the Pension Plan, and what advantages does this Pension Purchase Program offer? Understanding this rollover option is vital for maximizing retirement benefits, as it can provide employees with a stable income stream while avoiding unnecessary fees typically associated with purchasing annuities outside the plan.

Rolling Over 401(k) into the Pension Plan: Employees can roll over their 401(k) accounts into the Pension Plan using the Pension Purchase Program. This option offers several advantages, including avoiding fees associated with purchasing annuities outside the plan and receiving a stable income stream during retirement(Target Corporation_Dece…).

What are the implications of a participant's age and joint annuitant's age on the payment amounts under the various Joint and Survivor Annuity options at Target Corporation? Employees should be aware of how age differences can impact their pension payouts, as the specific percentages payable under these options may vary based on the ages of both the participant and their designated joint annuitant.

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Plan Terminations or Amendments: In case of plan terminations or amendments, vested benefits are protected, and employees will receive their earned pension. If the plan is amended or terminated, Target ensures that vested benefits are distributed according to the plan's terms(Target Corporation_Dece…).

For employees retiring or leaving Target Corporation, what options are available with respect to unused vacation time and how might this be factored into pension calculations? Understanding how accrued time off translates into benefits could have a significant impact on an employee's financial positioning upon retirement.

Unused Vacation Time and Pension Calculations: Unused vacation time does not directly affect pension benefits but can be included in eligible earnings calculations that determine final average pay. Employees nearing retirement should consult with Target’s Benefits Center to understand how unused time may impact their overall benefits(Target Corporation_Dece…).

How can employees contact Target Corporation for assistance with their retirement benefits to address any questions or concerns they may have about their pension plans? Accessing the right resources and support is essential for employees to navigate their retirement benefits effectively. They can reach out to the Target Benefits Center at 800-828-5850 for more specific inquiries related to their personal circumstances. These questions aim to enhance employees' understanding of their retirement benefits, ensuring they are well-prepared for their transition into retirement.

Contacting Target for Pension Assistance: Employees can contact the Target Benefits Center at 800-828-5850 for assistance with their retirement and pension plans. This center provides support with any questions related to pension options, payments, and administrative requirements(Target Corporation_Dece…).

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For more information you can reach the plan administrator for Target at 10 South Dearborn Street 48th Floor Chicago, IL 60603; or by calling them at 1-800-440-0680.