Key Takeaways
- The PAP has six coverage parts: Liability, Medical Payments, Uninsured Motorist, Physical Damage (Collision/Comprehensive), and Duties After Accident
- Part A Liability covers bodily injury and property damage the insured causes to others
- Part C Uninsured Motorist covers injuries caused by uninsured, underinsured, or hit-and-run drivers
- Part D Physical Damage includes Collision (any collision) and Comprehensive (other than collision)
- Tennessee PAPs must comply with state minimum limits and UM/UIM offer requirements
Personal Auto Policy (PAP) Coverage
The Personal Auto Policy is the standard policy form for private passenger vehicles in Tennessee.
PAP Structure
The PAP consists of six coverage parts:
Coverage Parts Overview
| Part | Coverage Type | Description |
|---|---|---|
| Part A | Liability | BI and PD liability to others |
| Part B | Medical Payments | Medical expenses regardless of fault |
| Part C | Uninsured Motorist | UM and UIM coverage |
| Part D | Physical Damage | Collision and comprehensive |
| Part E | Duties After Accident | Insured's responsibilities |
| Part F | General Provisions | Policy conditions |
Part A - Liability Coverage
Liability coverage pays for bodily injury and property damage the insured causes to others:
What's Covered
- Bodily injury to others
- Property damage to others' property
- Defense costs (in addition to limits)
- Supplementary payments (bail bonds, loss of earnings)
Who is Covered
| Insured | Coverage |
|---|---|
| Named insured | Any vehicle |
| Spouse | Any vehicle |
| Family members | Covered vehicles |
| Permissive users | Covered vehicles |
Split Limits vs. Combined Single Limit
Split Limits (Tennessee minimum: 25/50/15):
- Separate limits for BI per person, BI per accident, PD
Combined Single Limit (CSL):
- Single limit for all liability in one accident
- Example: $100,000 CSL
Part B - Medical Payments Coverage
Medical payments coverage pays for medical expenses regardless of fault:
Coverage Details
| Feature | Description |
|---|---|
| Coverage | Medical and funeral expenses |
| Fault | Regardless of who is at fault |
| Limits | Per person limit |
| Time Limit | Expenses within 3 years of accident |
Who is Covered
- Named insured and family members in any auto
- Anyone in the covered auto with permission
Part C - Uninsured/Underinsured Motorist Coverage
UM/UIM coverage protects you when at-fault driver has no or insufficient insurance:
Uninsured Motorist (UM)
Covers accidents with:
- Drivers with no insurance
- Hit-and-run drivers (phantom vehicles)
- Drivers whose insurer is insolvent
- Stolen vehicles
Underinsured Motorist (UIM)
Covers the difference when:
- At-fault driver's limits are less than your damages
- Subject to your policy's UIM limits
- May require exhausting at-fault driver's limits first
Exam Tip: Tennessee requires insurers to offer UM/UIM coverage equal to liability limits. The insured must reject in writing to decline coverage.
Part D - Physical Damage Coverage
Physical damage coverage protects your vehicle:
Collision Coverage
| Feature | Description |
|---|---|
| Definition | Damage from collision with another object |
| Deductible | Typically $250-$1,000 |
| Examples | Car-to-car collision, hitting a guardrail, rollover |
| Recovery | Insurer may subrogate against at-fault party |
Comprehensive Coverage (Other Than Collision)
| Feature | Description |
|---|---|
| Definition | Damage from perils other than collision |
| Deductible | Typically $100-$500 |
| Covered Perils | Theft, vandalism, fire, flood, hail, windstorm, animals, falling objects, glass breakage |
Loss Settlement
Actual Cash Value (ACV) is paid:
- Replacement cost minus depreciation
- Market value of comparable vehicle
- Can be increased with endorsements
Part E - Duties After an Accident
Insured must:
- Notify insurer promptly
- Cooperate with investigation
- Submit proof of loss when requested
- Authorize medical records release
- Submit to examination under oath if requested
- Not admit liability or settle claims without insurer consent
Which part of the Personal Auto Policy covers damage to your own vehicle from hitting a guardrail?
A hit-and-run driver injures a Tennessee policyholder. Which coverage would pay for the policyholder's injuries?
Comprehensive coverage on a PAP would cover damage from which of the following?