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AUTO PHYSICAL DAMAGE COVERAGE

 

FOR THE

 

PURMS JOINT SELF-INSURANCE AGREEMENT

 

Adopted as of February 27, 1997

 

 

TABLE OF CONTENTS

 

 

                                                                                                                                                    

1.     Definitions for Auto Physical Damage Coverage. 2

1.1       Accident 2

1.2       Actual Cash Value  2

1.3       Auto  2

1.4       Auto Claim   2

1.5       Auto Loss  2

1.6       Auto Loss Amount 2

1.7       Auto Physical Damage Coverage Limit 2

1.8       Covered Auto  2

1.9       Covered Auto Physical Damage Claim   3

1.10     Direct Physical Loss or Damage  3

1.11     Employee's Auto  4

1.12     Leased Autos  4

1.13     Member 4

1.14     Mobile Equipment 4

1.15     Newly Acquired Autos  5

1.16     Public Utility Operations  5

1.17     PUD Business  5

1.18     Replacement Cost 6

1.19     Salvage  6

1.20     Schedule of Values  6

2.     Interest and Property Insured. 6

3.     Schedule of Values. 6

4.     Auto Physical Damage Coverage Limit 6

5.     Coverage Territory. 6

6.     Perils Insured Against 6

7.     Assigned Deductibles. 7

8.     Property Excluded. 7

9.     Perils Excluded. 7

10.       Valuation of Auto Loss. 7

10.1     Replacement Cost 7

10.2     Actual Cash Value  7

11.       Coverage Conditions. 8

12.       Duties of the Member in the Event of an Auto Loss. 8

12.1     Notice of Accident to Administrator 8

12.2     Duty to Cooperate  8

12.3     Legal Papers  8

12.4     Inspection, Protection of Damaged Property, and Notice to Police  8

13.       Order of Coverage Payments. 8

14.       Appraisals to Establish Insured Val 8

15.       Multiple Perils. 9

16.       Other Insurance and Third-Party Indemnifications. 9

16.1     Auto Physical Damage Coverage is Excess to Specific Other Insurance  9

16.2     Reimbursement of Member for Other Insurance Collected/Additional Excess Property Insurance Permitted  9

17.       Fund's Right of Subrogation. 9

18.       Salvage and Third-Party Recoveries. 10

19.       No Benefit to Bailee. 10

20.       Privilege to Adjust With Owner 10

 

 


 

                                                                

AUTO PHYSICAL DAMAGE COVERAGE

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

 

Adopted as of February 27, 1997

 

 

Overview of Coverages for PURMS Risk Pools

 

The Coverages Sections of the SIA set forth the Insuring Agreements, Exclusions, and other terms and conditions which comprise the Coverages provided by the Fund for the Members of its Risk Pools and, as applicable, their Employees under the SIA. 

 

The current Liability Coverage provided by the Fund for Members of the Liability Pool includes:  Commercial General Liability (SIA § III, “CGL”); Public Officials & Entity Liability (SIA § IV, “PO&E”); Automobile Liability (SIA § V); and Pollution Liability (§ VI). The CGL Coverage was originally adopted on December 20, 1976, has been amended from time to time, and was unanimously re-adopted by the Members on December 7, 2001. The PO&E, Automobile and Pollution Liability Coverages were first adopted effective March 30, 1995. The PO&E Coverage was unanimously re-adopted by the Members on December 7, 2001.

 

The current Property Coverage provided by the Fund for Members of the Property Pool includes:  General Property Coverage (SIA § X) and Auto Physical Damage Coverage (SIA § XI). Both of these Property Coverages were originally adopted effective February 27, 1997.

 

Members of the Property Pool may participate in either or both Property Coverages (SIA § X and/or § XI).  Members of the Liability Pool must participate in all Liability Coverages provided by the Fund (SIA § III - VI).

 

The current Health & Welfare Coverage provided by the Fund for the Members of the H&W Pool is set forth in § XIV. The H&W Coverage was originally adopted on March 16, 2000, effective April 1, 2000, and was amended and restated and unanimously re-adopted by the Members as of December 7, 2001.

 

These Coverages, as amended from time to time pursuant to § I, ¶ 5.2, are specifically incorporated into the Interlocal Agreement and shall be deemed a part of that Agreement as if fully set forth therein.

 

 

 

 

 

AUTOMOBILE PHYSICAL DAMAGE COVERAGE

 

 

1.               Definitions for Auto Physical Damage Coverage.  The Definitions set forth in the "Definitions" Section of the SIA (see, § II) apply to the interpretation of the Coverage provided by this Auto Physical Damage Coverage Section, except as may be modified specifically or by necessary implication by the Definitions set forth below which are specific to the Auto Physical Damage Coverage contained in this § XI. 

 

1.1                      Accident -- shall mean an unusual, unintended, unexpected and unforeseen happening, including continuous or repeated exposure to the same conditions, that causes Direct Physical Loss or Damage to a Covered Auto arising from the use thereof by a Member (as defined specifically in § XI, ¶ 1.13) and which occurred at a time when the Member requesting the Auto Physical Damage Coverage was a Member of the Property Pool. 

 

1.2                      Actual Cash Value -- shall mean the Replacement Cost less depreciation (see § XI, ¶ 10, Valuation of Auto Loss).

 

1.3                      Auto -- shall mean a land motor vehicle, trailer or semi-trailer designed for travel on public roads, but does not include Mobile Equipment, except for the types of "self-propelled" Mobile Equipment identified in § XI, ¶ 1.14.

 

1.4                      Auto Claim -- shall mean a Property Claim for an Auto Loss.

 

1.5                      Auto Loss - shall mean a Property Loss to a Covered Auto arising from an Accident.

 

1.6                      Auto Loss Amount - shall mean the Property Loss Amount for an Auto Loss.

 

1.7                      Auto Physical Damage Coverage Limit - shall mean the Property Coverage Limit for the General Property Coverage Section (§ X) which shall be applied in the manner set forth therein to all Covered Auto Physical Damage Claims and/or to all Covered Property Claims involving Property Loss (including Auto Loss) arising from a single Property Loss.

 

1.8                      Covered Auto -- shall mean:

 

1.8.1                                     Owned Autos -- Those Autos owned by a Member including owned private passenger Autos and Owned Autos other than private passenger Autos, and including trailers not owned by the Member but attached to power units the Member does own; provided such property (except for trailers not owned by a Member) constitutes Insured Property (i.e., such property is identified to the Member in the Schedule of Values maintained by the Administrator or is subject to one of the exceptions thereto set forth in § X, ¶¶ 3.2.1 and 12.1.1, as Newly Acquired Property, or ¶ 3.2.2, as property inadvertently omitted from the Schedule of Values). 

 

 

 

1.8.2                                     Hired Autos -- Those Autos that are leased, hired, rented or borrowed by a Member, or by an Employee for the Member's account or by the Employee personally, in connection with PUD Business; provided such property constitutes Insured Property; and subject to the Other Insurance provisions of § XI, ¶ 16.

 

1.8.3                                     Non-Owned Autos -- Autos that are not owned, leased, hired, rented or borrowed by a Member, but that are used in connection with the Member's Public Utility Operations; provided such property constitutes Insured Property under § X, ¶ 3.2, as property listed in the Schedule of Values, or ¶¶ 3.2.1 and 12.1.1, as Leased Property, or ¶.3.2.2, as property inadvertently omitted from the Schedule of Values; and, subject to the Other Insurance provisions of § XI, ¶ 16.  "Non-Owned Autos" includes Autos owned by the Member's Employees or members of such Employee's households, but only while used in connection with the Member's PUD Business.

 

1.8.4                                     Other Covered Autos -- shall mean:

 

1.8.4(a)  Trailers --  which have a load capacity of 2,000 lbs. or less designed primarily for travel on public roads, provided such property constitutes Insured Property;

 

1.8.4(b)  Mobile Equipment  --  while being carried or towed by a Covered Auto, provided such property constitutes Insured Property;

 

1.8.4(c)  Substitute Autos  -- which means any Auto a Member does not own, while used with the permission of its owner as a temporary substitute for a Covered Auto a Member does own that is out of service because of breakdown, repair, servicing, loss or destruction, provided such property constitutes Insured Property.

 

1.9                      Covered Auto Physical Damage Claim -- shall mean a Property Claim filed with the Administrator by a Member, on behalf of the Member or one or more of its Employees, arising out of an Accident causing Direct Physical Loss or Damage to a Covered Auto, which occurred at a time when the Member requesting Auto Physical Damage Coverage for the Property Claim was a Member of the Property Pool, and for which Auto Physical Damage Coverage is provided by the Fund pursuant to the terms of the Auto Physical Damage Coverage Section (see § XI).

 

1.10                   Direct Physical Loss or Damage -- shall mean destruction of or damage to a Covered Auto as a result of an Accident (see definition of Property Loss, § X, ¶ 1.42, and terms of General Property Coverage set forth in § X, ¶ 4).

 

1.11                   Employee's Auto -- shall mean an Auto owned by an Employee, or a Member of his or her family, which shall be treated as a Non-Owned Auto for purposes of coverage under the Auto Physical Damage Coverage Section.

 

1.12                   Leased Autos -- shall mean Hired Autos and/or Substitute Autos, which shall be subject to Property Coverage as "Leased Property" pursuant to § X, ¶¶ 3.2.1 and 12.1.1 and shall be subject to Property Assessments based on their Insured Values as determined for Leased Property in § X, ¶ 3.3.

 

1.13                   Member -- for purposes of ¶ 2 of the Auto Physical Damage Coverage Section, shall mean any person or organization qualifying as a "Member" as follows:

 

1.13.1         The Member or its Employees, for any Covered Auto (except for an Employee with respect to a Non-Owned Auto);

 

1.13.2                                  Any Employee, and members of the Employee's household, while using any Covered Auto, other than a Non-Owned Auto, with the Member's express or tacit permission and in connection with PUD Business,  except the owner or anyone else from whom the Member hired or borrowed a Covered Auto (provided, this exception does not apply if such "owner or anyone else" is an Employee or if the Covered Auto is a "trailer" connected to a "Covered Auto" that qualifies as an Owned Auto);

 

1.13.3                                  Any Employee, and members of the Employee's household, if the Covered Auto is owned by that Employee or a member of his or her household or by another Employee of the Member; provided the Employee is using any Non-Owned Auto with the Member's express or tacit permission and such use is in connection with PUD Business; and

 

1.13.4                                  Any Third Party, while using a Covered Auto with the express permission of a Member or Employee, but only if such use is in connection with the Member's Public Utility Operations.

 

1.14         Mobile Equipment -- shall mean any of the following types of land vehicles, including any attached machinery or equipment:

 

1.14.1                                  Bulldozers, farm machinery, forklifts, and other vehicles designed for use principally off the public road;

 

1.14.2                                  Autos maintained for use solely on or next to Insured Premises owned or rented by a Member;

 

1.14.3                                  Autos that travel on crawler tread;

 

1.14.4                                  Autos, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted: 

 

1.14.4(a)  Power cranes, shovels, loaders, diggers, or drills; or

 

1.14.4(b)  Road construction or resurfacing equipment such as graders, scrapers or rollers.

 

1.14.5                                  Autos not described in ¶ 1.14.1 through 1.14.4 above that are not elf-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:

 

1.14.5(a)  Air compressors, pumps, and generators, including spraying, welding, building, cleaning, geophysical exploration, lighting and well servicing equipment; or

 

1.14.5(b)  Cherry pickers and similar devices used to raise or lower workers.

 

 

1.14.6                                  Autos not described in ¶¶ 1.14.1 through 1.14.4 above maintained primarily for purposes other than the transportation of persons or cargo.  However, self-propelled Autos with the following types of permanently attached equipment are not "Mobile Equipment" but will be considered "Autos":

 

1.14.6(a) Equipment designed primarily for snow removal, road maintenance (but not construction or resurfacing), or street cleaning;

 

1.14.6(b)  Cherry pickers and similar devices mounted on Auto or truck chassis and used to raise or lower workers; and

 

1.14.6(c)  Air compressors, pumps and generators, including spraying, welding, building, cleaning, geophysical exploration, lighting or well servicing equipment.

 

1.15                   Newly Acquired Autos -- shall mean an Owned Auto acquired by a Member which is subject to Property Coverage as "Newly Acquired Property" pursuant to § X, ¶¶ 3.2.1 and 12.1.1, and shall be subject to Property Assessments based on their Insured Values as determined for "Newly Acquired Property" in § X, ¶ 3.3.

 

1.16                   Public Utility Operations -- shall mean the operations of the Member relating to, arising from or associated with the production, transmission, delivery or furnishing of electricity, gas, water or sewer Services to the public, including the ownership, operation, management or control of any plant or equipment used in connection therewith.

 

1.17                   PUD Business -- for the purposes of this Auto Physical Damage Coverage Section, shall mean all activities falling within the definition of Public Utility Operations which involve the use of a Covered Auto, and all business activities related thereto (such as attending seminars, conventions, trade association meetings, etc.) involving the use of a Covered Auto, so long as the primary purpose for such use is related to PUD Business activities and any use thereof for personal purposes is incidental to such business use.

 

1.18                   Replacement Cost -- shall mean the amount it would take to replace the damaged or destroyed property with property of like kind and quality, determined at the time and place of the Auto Loss (see §X, ¶ 10, "Valuation of Property Loss"), including sales tax and the reasonable cost of installation.

 

1.19                   Salvage -- shall mean any payment due or received by a Member for selling a damaged Covered Auto that is not repairable or is determined by the Administrator to be uneconomical to repair.  All Salvages, recoveries and payments owed or made to a Member from a Third Party purchaser of Salvage (including an Employee), excluding proceeds from Subrogation, shall reduce the Members' Auto Loss Amount accordingly (see § X, ¶ 18).

 

1.20                   Schedule of Values -- shall mean the information maintained by the Administrator regarding Members' Covered Autos which shall be used by the Fund, among other things, in establishing whether a Member's Auto is Insured Property, and in determining Members' Assessment Shares under the Property Assessment Formulas (see § X, ¶ 3).

 

2.     Interest and Property Insured.  The Fund, through the Property Pool, agrees to provide Auto Physical Damage Coverage and under such Coverage to pay to or on behalf of any Member (or one or more Employees at the request of a Member) all Auto Loss Amounts incurred arising out of an Accident involving a Covered Auto used by a Member (as defined in § XI, ¶ 1.13) (and subject to the terms, conditions, limitations, exceptions, exclusions, provisions and stipulations of this Auto Physical Damage Coverage Section and the applicable terms and conditions of the General Property Coverage Section); provided, however, that the Auto Physical Damage Coverage for Hired Autos (¶ 1.8.2), Non-Owned Autos (¶ 1.8.3) and Substitute Autos (¶ 1.8.4(c)) shall be deemed "excess insurance" if and to the extent there is Other Insurance available (see § XI, ¶ 16). 

 

3.     Schedule of Values.  The terms and conditions of § X, ¶ 3 of the General Property Coverage Section shall govern the determination of whether an Auto constitutes "Insured Property" in the event of an Auto Loss, and what Insured Value shall be identified to the Member for the Covered Auto in the Schedule of Values for purposes of Property Assessments.

 

4.     Auto Physical Damage Coverage Limit.  The Fund shall not be obligated to pay an amount in excess of the Property Coverage Limit established by the Board for one or more Covered Property Claims (and/or Covered Auto Physical Damage Claims) arising out of any one Property Loss (and/or Auto Loss), irrespective of the number of Members or Employees whose property may be involved in the Property Loss (and/or Auto Loss) or the total value of their Property Loss Amounts (and/or Auto Loss Amounts), and subject to all other terms and conditions of § X, ¶ 4 regarding the Property Coverage Limit.

 

5.     Coverage Territory.  This Auto Physical Damage Coverage shall apply to all Covered Autos worldwide.

 

6.     Perils Insured Against.  This Auto Physical Damage Coverage Section provides Property Coverage for a Member's Covered Autos while being used by a Member against all risks of Direct Physical Loss or Damage arising out of or resulting from an Accident that occurs while the Member is a Member of the Property Pool, except for the Perils excluded in ¶ 9 hereinafter, and subject to the conditions, limitations, exceptions, provisions and stipulations of this Auto Physical Damage Coverage Section.

 

7.     Assigned Deductibles.  The terms and conditions of § X, ¶ 7 of the General Property Coverage Section regarding "Assigned Deductibles" shall govern the determination of the amounts of Members' Assigned Deductibles for Covered Autos and the amount of Deductible applicable to an Auto Loss.

 

8.     Property Excluded.  This Auto Physical Damage Coverage Section excludes Coverage for Direct Physical Loss or Damage to any property that does not constitute a Covered Auto and/or its equipment.

 

9.     Perils Excluded.  This Auto Physical Damage Coverage Section excludes Coverage for:

 

9.1                      Wear and tear, freezing, mechanical or electrical breakdown, unless caused by other Auto Loss covered by this Auto Physical Damage Coverage;

 

9.2                      Blow-outs, punctures or other road damage to tires, unless caused by other Auto Loss covered by this Auto Physical Damage Coverage:

 

9.3                      Auto Loss caused by declared or undeclared war or insurrection or any of their consequences;

 

9.4                      Auto Loss caused by explosion of a nuclear weapon or its consequences;

 

9.5                      Auto Loss caused by radioactive contamination;

 

9.6                      Loss or damage to tape decks or other sound recording equipment not permanently installed in a Covered Auto, except for radio communications equipment which is not Excluded hereunder;

 

9.7                      Loss or damage to tapes, records or other sound reproducing devices designed for use with sound reproducing equipment.

 

10.  Valuation of Auto Loss.  In the event an Auto Loss gives rise to a Covered Auto Physical Damage Claim under this Auto Physical Damage Coverage, the Auto Loss Amount for the Covered Auto shall be determined as follows:

 

10.1                   Replacement Cost.  For a Covered Auto that is repaired or replaced, payment will be made at Replacement Cost.

 

10.2                   Actual Cash Value.  For a Covered Auto which the Member chooses not to repair or replace, the Member will be paid Actual Cash Value. 

 

11.  Coverage Conditions.  The "Coverage Conditions/Notice" provisions of § X, ¶ 12.1.1 and the "Follow-Up Assessment for Insured Property Not Listed in the Schedule of Values at the Time of a Property Assessment" provisions of § X, ¶ 12.1.2 of the Property Coverage Section shall apply to Covered Autos as follows:  (a) "Newly Acquired Property" shall include "Owned Autos", which shall be treated as "Newly Acquired Property" thereunder; (b) "Leased Autos" shall include "Hired Autos" and "Substitute Autos", which shall be treated as "Leased Property" thereunder; and (c) "Employees' Autos" shall include "Non-Owned Autos" and "Substitute Autos", which shall be treated as "Employees' Property" under ¶ 2.1.5 of the General Property Coverage Section.

 

12.  Duties of the Member in the Event of an Auto Loss.

 

12.1                   Notice of Accident to Administrator.  The Member must promptly notify the Administrator of any Accident causing an Auto Loss.  The Member must inform the Administrator how, when and where the Accident occurred.  The Member must also assist the Administrator in obtaining the names and addresses of any injured persons and/or witnesses.

 

12.2                   Duty to Cooperate.  The Member must cooperate with the Administrator and the Fund in the investigation and settlement of any Property Claim or the prosecution or defense of any claim or suit relating thereto.

 

12.3                   Legal Papers.  The Member must promptly send the Administrator copies of any notices or legal papers received in connection with the Accident.

 

12.4                   Inspection, Protection of Damaged Property, and Notice to Police.  To recover for a loss to a Covered Auto, the Member also must do the following in a timely manner:

 

12.4.1                                                      Permit the Fund to inspect and appraise the damaged Covered Auto before its repair or disposition;

 

12.4.2                                                      Do what is reasonably necessary after an Auto Loss, at the Fund's expense, to protect the Covered Auto from further loss or damage; and

 

12.4.3                                                      Promptly notify the police regarding any Accident involving the Covered Auto, or if any equipment of the Covered Auto is stolen.

 

13.  Order of Coverage Payments.  The terms and conditions of § X, ¶ 13 of the General Property Coverage Section shall apply to Covered Auto Physical Damage Claims filed under this Auto Physical Damage Coverage Section, and for purposes of determining the "Order of Coverage Payments" for any Property Loss involving a Covered Auto, a Covered Auto Physical Damage Claim shall be paid under Coverage A of the General Property Coverage Section.

 

14.  Appraisals to Establish Insured Values.  The Insured Values of all Members' Covered Autos shall be established pursuant to the Appraisal process set forth in § X, ¶ 14 of the General Property Coverage Section, or pursuant to § X, ¶ 3.3 thereof.

 

15.  Multiple Perils.  Multiple Auto Claims arising out of a single Accident, even if filed by several different Members on their own behalf or on behalf of their Employees, shall be deemed to be a single Auto Claim.  The Fund shall not be liable for any Auto Loss occurring before the date a Member becomes a Member of the Property Pool, or any Auto Loss occurring after the effective date of a Member's Withdrawal from the Property Pool.

 

16.  Other Insurance and Third-Party Indemnifications. 

 

16.1                   Auto Physical Damage Coverage is Excess to Specific Other Insurance.  In the event of an Auto Loss, if there is Other Insurance (including Third-Party Indemnifications) in force covering any Covered Auto against any or all the damage or losses also covered under this Auto Physical Damage Coverage, or if there is any Other Insurance covering more specifically any peril which occasioned such damage or loss, or which would cover the same in the case of any of the foregoing but for the existence of this Auto Physical Damage Coverage, this Auto Physical Damage Coverage shall be further limited to the excess, if any, beyond the amount which is or would have been payable under such Other Insurance had this Coverage not been in effect, but in no event exceeding the Auto Physical Damage Coverage Limit.  It is the intention of this Auto Physical Damage Coverage Section to be construed as the initial surplus or excess insurance where any specific Other Insurance exists on any or all of the Covered Autos, and this Auto Physical Damage Coverage Section shall not apply or contribute until the amount collectible from such specific Other Insurance shall be exhausted.

 

16.2                   Reimbursement of Member for Other Insurance Collected/Additional Excess Property Insurance Permitted.  The Member shall be reimbursed to the extent of the difference between the amount collected from such specific Other Insurance and the amount of the Auto Loss sustained and paid by the Member, not exceeding, however, the Auto Physical Damage Coverage Limit.  Further surplus or excess insurance beyond the Auto Physical Damage Coverage Limit and the coverage limit of the Primary Excess Property Insurance Coverage is permitted, it being understood that any such excess or surplus insurance shall not be considered or held as contributing "Other Insurance" under this paragraph.  This Auto Physical Damage Coverage Section does not in any way alter the Fund's Right of Subrogation set forth in ¶ 17 herein.

 

17.  Fund's Right of Subrogation. In the event the Fund makes any Property Coverage Payment for an Auto Loss under this Auto Physical Damage Coverage Section, the Fund shall be subrogated to the extent of such Payment to all Members' rights of recovery against any Third Party or Employee; provided, however, that the Fund shall not exercise its Subrogation Rights against any Employee whose acts or omissions caused or contributed to the Property Loss so long as such Employee was acting in good faith and within the scope of his/her employment with the Member.  The Member shall execute timely all papers required and do anything that may be necessary at the expense of the Fund to secure such right.  The Fund will act in concert with all interested parties in the exercise of such rights of recovery.  If any amount is recovered as a result of such proceedings, the net amount recovered, after deducting the costs of recovery, shall be divided among the interested parties in proportion to their respective interests.  If there should be no recovery, the expense of the proceeding shall be borne by the Property Pool.

 

18.  Salvage and Third-Party Recoveries. In the event of any Salvage or recovery against a Third Party arising out of an Auto Loss, such Salvage or Third-Party Recovery shall accrue entirely to the benefit of the Fund until the Fund has been reimbursed in full for all sums it has paid in connection with the Auto Loss, including Property Claim Costs incurred in connection with resolving the Covered Auto Physical Damage Claim and any litigation costs the Fund incurred to obtain any Third-Party Recovery.  The Member shall permit the Administrator to inspect the damaged Auto and any records proving the Auto Loss.  The Member shall also permit the Administrator to take samples of the damaged Auto for inspection, testing and analysis.  The Member must notify the Administrator of the nature and extent of the interest of the Member and all others in the damaged Auto.  The right to inspect or the inspection itself does not in any way generate a representation by the Fund that the Member's Auto is safe, not harmful to health or complies with law, rule or regulations regarding Auto usage.

 

19.  No Benefit to Bailee. This Auto Physical Damage Coverage Section shall in no way inure directly or indirectly to the benefit of any carrier or other bailee.

 

20.  Privilege to Adjust With Owner. In the event of an Auto loss to a Covered Auto owned by a Third Party for which the Member makes an Auto Claim upon the Fund, the right to adjust such loss or damage with the owner or owners of the Covered Auto is reserved to the Fund, and the receipt of such owner or owners in satisfaction thereof shall be in full satisfaction of any Auto Claim of the Member for which such payment has been made.  If legal proceedings are instituted to enforce a claim against the Member with respect to such Auto Loss, the Fund reserves the right at its option, without expense to the Member, to conduct or control the defense on behalf of and in the name of the Member.  No acts of the Fund in such regard shall increase the obligation of the Fund under this Auto Physical Damage Coverage Section, nor increase the Auto Physical Damage Coverage Limit applying to such Auto Loss.