6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The tested PAP is the ISO PP 00 01 (current PP 00 01 09 18 edition), built on six lettered parts A through F.
- "You" = the named insured plus a resident spouse; a departed spouse stays insured until policy end or 90 days, whichever is first.
- Eligibility: individually/jointly owned private passenger autos, pickups/vans 10,000 lbs GVWR or less, not used to carry persons or property for a fee.
- A newly acquired additional auto has automatic Part D coverage for 14 days when an existing auto already carries physical damage coverage.
- Ineligible vehicles (heavy trucks, livery, business fleets) go on a Commercial/Business Auto Policy; cycles and motor homes need PP 03 23.
The ISO Personal Auto Policy
The Personal Auto Policy (PAP) is the contract used to insure individually owned private passenger vehicles. The form tested on virtually every national P&C exam is the Insurance Services Office (ISO) PP 00 01, currently the PP 00 01 09 18 edition (a 2018 revision still in use). It is written in plain, simplified language and relies on defined terms that decide nearly every coverage question.
The two definitions tested most often are "you" and "your covered auto." "You" means the named insured shown on the Declarations and that person's resident spouse (a spouse who moves out is still "you" for 90 days or until the policy period ends). Memorize that 90-day spouse rule - it is a recurring trap.
Eligibility Requirements
The PAP is eligible for vehicles meeting all of these conditions:
- A private passenger auto, pickup, or van;
- Owned by an individual or by a married couple (eligible "as is"), or owned by two or more resident relatives by endorsement;
- A pickup or van with a Gross Vehicle Weight Rating (GVWR) of 10,000 lbs or less;
- Not used to carry persons or property for a fee (no taxi, no delivery business). A vehicle used for share-the-expense car pools remains eligible.
Vehicles failing these tests - heavy trucks, business-owned fleets, livery vehicles - are written on a Commercial Auto / Business Auto Policy (BAP) instead. Motorcycles, motor homes, and golf carts need the Miscellaneous Type Vehicle endorsement (PP 03 23).
The Six Parts of the PAP
The policy is organized into six lettered parts. Knowing what each part does - and that each carries its own insuring agreement, exclusions, and limit - is the foundation for the rest of this unit.
| Part | Coverage | What It Pays |
|---|---|---|
| Part A | Liability | Bodily injury & property damage the insured is legally liable for |
| Part B | Medical Payments | Reasonable medical/funeral expenses for the insured, regardless of fault |
| Part C | Uninsured/Underinsured Motorists | The insured's own injury when the other driver has no/too little coverage |
| Part D | Coverage for Damage to Your Auto | Physical damage - Collision and Other Than Collision (Comprehensive) |
| Part E | Duties After an Accident or Loss | Conditions the insured must satisfy |
| Part F | General Provisions | Territory, termination, legal action, two-or-more-policies |
"Your Covered Auto" and Newly Acquired Autos
"Your covered auto" includes (1) any vehicle on the Declarations, (2) a newly acquired auto, (3) a trailer you own, and (4) a temporary substitute for a covered auto that is out of service due to breakdown, repair, servicing, loss, or destruction.
The newly acquired auto reporting rules are heavily tested:
- If the policy already covers at least one auto with physical damage coverage, an additional newly acquired auto has Part D coverage automatically for 14 days before the insured must report it.
- A replacement auto receives the broadest coverage on any auto already on the policy; if the insured wants Collision/Comprehensive on the replacement and carried it nowhere else, that coverage applies but the insured must ask within 14 days.
Note: older PAP editions used a 30-day window. Exams keyed to the current ISO form expect 14 days.
The Declarations and How Coverage Is Selected
The Declarations page is the customized front of the policy. It names the insured, lists each covered auto and its garaging location, shows which of Parts A through D apply to each vehicle, and states the limits, deductibles, and premium. On the exam, remember that coverage is selected vehicle by vehicle: an insured can carry full Part A/B/C/D on a new car while electing only liability on an old second car. A deductible under Part D applies per vehicle, per loss, not per policy.
The insuring agreement in each part is the promise to pay; the conditions in Parts E and F (duties after loss, fraud, legal action, and the territory clause) apply across the whole contract. The policy territory is the United States, its territories and possessions, Puerto Rico, and Canada - and includes transport between their ports. Mexico is not in the territory, a frequent trap; cross-border driving needs a separate Mexican auto policy.
Endorsements That Reshape Eligibility
Several standard ISO endorsements extend or restrict the base form and surface on exams:
- Miscellaneous Type Vehicle (PP 03 23) - adds motorcycles, motor homes, golf carts, and dune buggies that are otherwise ineligible.
- Extended Non-Owned Coverage (PP 03 06) - covers a named individual who regularly uses a vehicle not owned by them (e.g., a furnished company car), closing the regular-use gap.
- Towing and Labor Costs (PP 03 03) - adds roadside towing/labor up to a stated limit.
- Joint Ownership Coverage (PP 03 34) - allows two or more resident relatives, or two unmarried people living together, to be named insureds.
Knowing which endorsement solves a given eligibility problem - rather than denying coverage outright - is exactly how these facts are tested.
A named insured's spouse moves out of the household after a separation. For how long does the departed spouse remain a "you" under the unendorsed PP 00 01?
Which vehicle is eligible for the unendorsed Personal Auto Policy?