Personal Auto Policy
Coverage Guide
Table of Contents
Chapter 1: Underwriting a Personal Auto Policy....................................1
Eligibility......................................................................................................1
Underwriting a Personal Auto Submission...................................................2
Age, Gender, and Marital Status.............................................................3
Driving Record.......................................................................................3
Use of the Car.........................................................................................3
Type of Car.............................................................................................3
Occupation..............................................................................................4
Insurance Score (Credit Score)...............................................................4
Rating a Personal Auto Policy......................................................................4
Rating Example......................................................................................6
Arrangement of the Policy............................................................................7
The Dec Page..........................................................................................8
Contents of the PAP................................................................................8
Mandatory Endorsements.......................................................................8
Other Endorsements...............................................................................9
Chapter 2: Definitions...............................................................................11
“You” and “Your”.......................................................................................11
Changes in Insured Status...........................................................................12
“We,” “Us,” and “Our”................................................................................12
Leased Cars.................................................................................................12
“Bodily Injury”...........................................................................................13
“Business”...................................................................................................13
“Family Member”.......................................................................................13
“Occupying”...............................................................................................14
What Is “Occupying”—Really?..................................................................14
“Property Damage”.....................................................................................15
Temporary Substitute..................................................................................15
“Trailer”......................................................................................................15
“Your Covered Auto”..................................................................................16
“Newly Acquired Auto”..............................................................................16
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Automatic Coverage for Newly Acquired Autos........................................18
Minimum Limits.........................................................................................18
Chapter 3: Liability Coverage.................................................................21
The Insuring Agreement—Promise to Pay Legal Liability
and Provide Defense.............................................................................21
The Liability Insuring Agreement—Who Is an “Insured”..........................23
Supplementary Payments............................................................................26
Paragraph A Exclusions..............................................................................27
Intentional Injury Exclusion.................................................................27
Damage to Owned Property Exclusion................................................28
Care, Custody, or Control Exclusion....................................................28
Liability to an Employee of the Insured Exclusion..............................29
Public or Livery Conveyance Exclusion...............................................30
Business Use Exclusions......................................................................31
“Reasonable Belief” Exclusion............................................................31
Nuclear Exclusion.................................................................................33
Paragraph B Exclusions..............................................................................33
Off-Road Vehicles.................................................................................33
Furnished for Regular Use....................................................................34
Racing Exclusion..................................................................................35
Limit of Liability........................................................................................36
Out of State Coverage.................................................................................37
Financial Responsibility.............................................................................38
Other Insurance...........................................................................................38
Chapter 4: Medical Payments Coverage................................................39
Who and What Is Covered..........................................................................39
Exclusions...................................................................................................40
Vehicles with Fewer Than Four Wheels...............................................41
Public or Livery Conveyance................................................................41
Vehicles as Residences.........................................................................41
Workers Compensation.........................................................................41
Vehicles “Owned or Provided”.............................................................42
What Is “Furnished or Available”?.......................................................42
Reasonable Belief.................................................................................42
Vehicle Used in Business......................................................................43
War and Nuclear...................................................................................43
Racing...................................................................................................43
Medical Payments Conditions....................................................................44
Limit of Liability..................................................................................44
Other Insurance.....................................................................................44
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Chapter 5: Uninsured Motorists Coverage............................................47
Who Is Covered for UM.............................................................................48
What Is an “Uninsured Motor Vehicle”?....................................................48
No Insurance.........................................................................................48
Limits Lower Than State Minimums....................................................48
Hit and Run Vehicle..............................................................................49
Denial of Coverage...............................................................................49
What Is Not an Uninsured Motor Vehicle?.................................................49
Vehicles Owned or Furnished...............................................................49
Self Insured Vehicles............................................................................50
Government Owned Vehicles...............................................................50
Rails and Crawler Treads......................................................................50
Off-Road Vehicles.................................................................................50
Vehicles Used as Residences................................................................51
Exclusions...................................................................................................51
Vehicles Owned but Not Insured..........................................................51
Family Members and Other Insurance.................................................51
Settlement without Consent of the Insurer...........................................51
Public or Livery Conveyance................................................................51
Reasonable Belief.................................................................................51
Workers Compensation and Disability Benefits...................................52
Punitive Damages.................................................................................52
UM Coverage Conditions...........................................................................52
Limit of Liability..................................................................................52
Other Insurance.....................................................................................53
Arbitration............................................................................................54
Underinsured Motorists Coverage (UIM)...................................................54
Uninsured Motorists Property Damage Coverage (UMPD).......................54
Chapter 6: Coverage for Damage to Your Auto.....................................57
The Insuring Agreement—Coverage for Direct and Accidental Loss........57
The Scope of “Auto Equipment”................................................................59
The Insuring Agreement—Collision and “Other Than Collision”.............60
Definition of “Nonowned Auto”.................................................................62
Transportation Expenses.............................................................................63
Physical Damage Coverage Exclusions......................................................65
Public or Livery Exclusion...................................................................65
Wear and Tear Exclusion......................................................................65
War And Nuclear Exclusion.................................................................67
Electronic Equipment Exclusions.........................................................67
Governmental or Civil Authorities Exclusion......................................70
Trailers, Campers, Mobile Homes Exclusion.......................................70
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“Reasonable Belief” Exclusion............................................................70
Radar Detection Equipment Exclusion.................................................71
Custom Furnishings Exclusion.............................................................71
Auto Business Exclusion......................................................................72
Racing Exclusion..................................................................................72
Rental Cars Exclusion..........................................................................73
Limit of Liability........................................................................................73
Payment of Loss..........................................................................................75
No Benefit to Bailee....................................................................................75
Other Sources of Recovery.........................................................................75
Other Sources of Recovery—Primary vs. Excess Coverage......................76
Appraisal.....................................................................................................77
Chapter 7: Duties after Loss and General Provisions...........................79
Duties after an Accident or Loss.................................................................79
“Prompt Notice” of Loss or Claim.......................................................79
Other Duties When Seeking Coverage.................................................80
Uninsured Motorists Coverage...................................................................81
Physical Damage Coverage........................................................................81
General Provisions......................................................................................82
Bankruptcy............................................................................................82
Changes................................................................................................82
Fraud.....................................................................................................82
Legal Action against Us........................................................................83
Our Right to Recover Payment.............................................................83
Policy Period and Territory...................................................................84
Termination...........................................................................................85
Transfer of Your Interest in This Policy................................................87
Two or More Auto Policies...................................................................87
State-Specific Amendments........................................................................88
Chapter 8: Endorsements Available for the Personal Auto Policy.......89
Additional Insured – Lessor—PP 03 19.....................................................89
Auto Loan/Lease Coverage—PP 03 35......................................................90
Customizing Equipment Coverage—PP 03 18...........................................91
Damage to Your Auto (Maximum Limit of Liability)—PP 03 08..............91
Damage to Your Auto Loss Settlement Amendment—PP 03 43................92
Excess Custom Equipment Coverage.........................................................92
Excess Electronic Equipment Coverage—PP 03 13...................................92
Extended Non-Owned Coverage for Vehicles Furnished
or Available for Regular Use—PP 03 06..............................................93
Federal Employees Using Autos in Government Business—PP 03 01......93
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Full Safety Glass Coverage—PP 03 15......................................................93
Full Windshield Coverage—PP 03 25........................................................93
Joint Ownership Coverage—PP 03 34........................................................94
Liability Coverage Exclusion Endorsement—PP 03 26.............................94
Limited Mexico Coverage—PP 03 21........................................................94
Loss Payable Clause—PP 03 05.................................................................95
Mexican Collision Coverage—PP 03 56....................................................95
Miscellaneous Type Vehicle Endorsement—PP 03 23...............................95
Miscellaneous Type Vehicle Amendment (Motor Homes)—PP 03 28.......95
Named Non-Owner Coverage—PP 03 22..................................................96
Optional Limits Transportation Expenses Coverage—PP 03 02................96
Single Liability Limit—PP 03 09...............................................................96
Snowmobile Endorsement—PP 03 20........................................................96
Suspension of Insurance—PP 02 01...........................................................96
Tapes, Records or Other Devices—PP 03 04.............................................97
Towing and Labor Costs Coverage—PP 03 03...........................................97
Trailer/Camper Body Coverage
(Maximum Limit of Liability)—PP 03 07...........................................98
Trip Interruption Coverage—PP 13 02.......................................................98
Trust Endorsement—PP 13 03....................................................................99
Underinsured Motorists Coverage—PP 03 11............................................99
List of PAP Endorsements (discussed in this chapter) in Numeric Order....99
Chapter 9: Miscellaneous Type Vehicles...............................................101
Motor Homes............................................................................................101
Trailers and Camper Bodies......................................................................102
Motorcycles and Other Similar Vehicles Not Used
for Business Purposes.........................................................................103
Snowmobiles and All-Terrain Vehicles.....................................................103
Dune Buggies............................................................................................104
Golf Carts..................................................................................................104
Antique and Classic Autos........................................................................104
The Miscellaneous Type Vehicle Endorsement, PP 03 23........................105
Snowmobile Endorsement, PP 03 20........................................................107
Chapter 10: Nonowned Coverage..........................................................111
Introduction...............................................................................................111
Extended Nonowned Coverage Endorsement...........................................112
Covered Persons.................................................................................112
Excluded Autos...................................................................................112
Liability Coverage.........................................................................112
Medical Payments Coverage.........................................................113
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Business Use.................................................................................113
Rating............................................................................................114
Extended Nonowned Coverage—Vehicles Furnished or Available
for Use as Public or Livery Conveyance
Endorsement, PP 13 05.......................................................................114
Rating.................................................................................................114
Named Nonowner Coverage.....................................................................115
General Features of PP 03 22.............................................................116
Liability Coverage..............................................................................117
Medical Payments Coverage..............................................................117
Uninsured Motorists Coverage...........................................................117
Rating.................................................................................................118
Nonownership Coverage under a Commercial Auto Policy.....................118
Drive Other Car Coverage CA 99 10........................................................118
Individual Named Insured Endorsements
under a Commercial Auto Policy........................................................119
Regular Use...............................................................................................120
Chapter 11: No-Fault Automobile Insurance.......................................123
Types of No-Fault Laws............................................................................123
General Description of Coverage..............................................................124
Elements of No-Fault Coverage................................................................125
No-Fault Benefits................................................................................125
An Illustration of No-Fault Benefits.........................................................127
Tort Liability Exemption....................................................................128
Compulsory No-Fault Laws...............................................................129
Property Damage......................................................................................129
Constitutionality of No-Fault Laws..........................................................130
Chapter 12: Financial Responsibility
and Compulsory Insurance Laws...................................................133
Financial Responsibility Laws..................................................................134
Compulsory Insurance Laws.....................................................................134
Unsatisfied Judgment Funds.....................................................................135
Low-Cost Auto Insurance.........................................................................135
No Pay, No Play Laws..............................................................................136
Personal Auto Insurance and Laws Requiring Insurance.........................136
Required Limits by State..........................................................................136
Chapter 13: Issues in Personal Auto Insurance...................................137
Automatic Coverage.................................................................................137
Newly Acquired Autos........................................................................139
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TABLE OF CONTENTS
Inoperable Autos—When “Acquired”?..............................................149
Trailers................................................................................................140
Named Insured’s Ownership..............................................................140
Replacement vs. Additional Automobile............................................142
Betterment.................................................................................................143
Aftermarket Auto Parts.............................................................................145
What Is “Collision”?.................................................................................146
Collision in General............................................................................146
Collision with Road or Ground..........................................................147
Collision with Water...........................................................................150
Falling Objects....................................................................................151
Missiles...............................................................................................152
Malicious Mischief or Vandalism.......................................................155
Windstorm..........................................................................................159
Collision Following Theft...................................................................160
Contact with Bird or Animal..............................................................161
Glass Breakage...................................................................................162
Shifting of Cargo................................................................................162
Other Causes of Loss..........................................................................163
Proximate Cause.................................................................................163
Insurable Interest in Stolen Autos.............................................................165
Misrepresentation and an Insurer’s Right to Cancel a Policy...................171
Public or Livery Conveyance....................................................................173
Car Pools...................................................................................................176
Stacking.....................................................................................................181
What Qualifies as “Use” of Auto?............................................................184
Rental Cars and the Loss Damage Waiver................................................186
PAP Coverage...........................................................................................186
Suggestions for Agents.............................................................................188
To Buy or Not to Buy................................................................................189
“Auto” and “Motor Vehicle” Defined.......................................................189
Uninsured Motorists Coverage.................................................................190
Motorcycles as Motor Vehicles.................................................................191
Handling a Total Loss...............................................................................193
Appendix A: Personal Auto Policies (Reproduced)
Personal Auto Policy PP 00 01 01 05.................................................202
Personal Auto Policy PP 00 01 06 98.................................................215
Appendix B: Selected Endorsements (Reproduced)
Towing and Labor Costs Coverage PP 03 03 04 86...........................227
Extended Non-Owned Coverage—Vehicles Furnished
or Available for Regular Use PP 03 06 01 05....................................228
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Appendix C: Personal Auto—Requirements by State, Including
Uninsured and Underinsured Motorists Coverage........................229
Appendix D: “No-Fault” States with Unrestricted
and Restricted Right to Sue.............................................................232
Appendix E: Personal Auto Checklist...................................................235
Appendix F: Personal Auto Forms Applicable in Each
State and Special State Endorsements............................................241
Appendix G: Penalties for Failure to Carry
Motor Vehicle Insurance..................................................................321
Index.........................................................................................................327
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