6.1 Personal Auto Policy Structure and Eligibility

The ISO Personal Auto Policy

The Personal Auto Policy (PAP) is the standard contract used to insure private passenger vehicles in the United States. Most states use the ISO Personal Auto Policy (form PP 00 01), with the PP 00 01 09 18 edition being widely referenced on current exams. The PAP replaced the older Family Automobile Policy and is written in simplified, plain-English "readable" language with personal pronouns: "you" and "your" refer to the named insured (and resident spouse), while "we," "us," and "our" refer to the insurer.

Exam questions frequently test the six numbered parts of the PAP. Memorize them in order, because the test often asks which Part responds to a given loss.

The Six Parts of the PAP

Trap: Parts E and F contain no coverage — they are conditions and provisions. A question asking "which Part provides coverage for your own car's hail damage" is Part D (Other Than Collision), not Part A.

Eligibility

The PAP is for "private passenger autos" owned by an individual (or by a married couple residing together). To be eligible, the vehicle must be one of:

• A four-wheel private passenger auto (sedan, SUV, minivan)
• A pickup or van with a Gross Vehicle Weight Rating (GVWR) of 10,000 lbs. or less, not used to deliver or transport goods for someone else (except farming/ranching or incidental business use)
• A trailer owned by the insured
• A temporary substitute vehicle while the covered auto is out of service

Vehicles used as a public or livery conveyance (taxi, rideshare-for-hire) are excluded unless a share-the-expense car pool. Vehicles with fewer than four wheels (motorcycles) require a separate Miscellaneous Type Vehicle Endorsement (PP 03 23).

Insureds and Covered Autos

The definition of "insured" varies by Part, which is a heavy exam topic. For Part A liability, an insured includes:

1. You and any family member (a person related by blood, marriage, or adoption who is a resident of your household) — for the ownership, maintenance, or use of any auto.
2. Any person using your covered auto with permission.
3. Any person or organization legally responsible for acts of an insured using a covered auto (vicarious liability).

The phrase "any auto" is what extends your liability protection to a borrowed or rented vehicle, while permissive users of your own car are insured under the second prong.

Newly Acquired Autos and Temporary Substitutes

A "newly acquired auto" is automatically covered. Under the 09 18 edition, the insured generally must ask the insurer to add an additional or replacement vehicle within 14 days for broad coverage; if the policy has no liability coverage at all, the newly acquired auto gets coverage only if reported within 4 days. Know the 14-day figure as the standard default for adding coverage.

A temporary substitute auto — one you use while your covered auto is out of normal use due to breakdown, repair, servicing, loss, or destruction — is automatically treated as a covered auto for liability purposes. This is why a rental car you take while your car is in the shop is generally covered under Part A even before you call your agent.

Declarations and the Insuring Agreement

Like all property-casualty contracts, the PAP is assembled from the Declarations (the personalized data page listing named insured, covered autos, limits, deductibles, and premium), the insuring agreements (the promises to pay in each Part), exclusions, conditions, and any attached endorsements.

When two provisions conflict, an endorsement amends the base form, and specific language controls over general language. Exam writers test whether you can read the Declarations: if the Dec page shows Part A limits but leaves Part D blank for a particular vehicle, that vehicle simply has no physical-damage coverage even though it is a covered auto for liability. Always read which coverages are actually purchased per vehicle.

PAP Structure and Eligible Vehicles

The ISO Personal Auto Policy (PAP) is organized into six parts: Part A (Liability), Part B (Medical Payments), Part C (Uninsured/Underinsured Motorists), Part D (Coverage for Damage to Your Auto — physical damage), Part E (Duties After an Accident or Loss), and Part F (General Provisions). A Declarations page identifies the named insured, vehicles, limits, and coverages elected.

Eligibility is exam-tested: the PAP covers a private passenger auto, pickup, or van owned by an individual or by a married couple (and certain co-owned vehicles), with a gross vehicle weight under the program's threshold and not used to carry persons or property for a fee (limited exceptions for share-the-expense carpools). Vehicles used primarily in business, or owned by a corporation, generally require a commercial (Business Auto) policy instead.

Who Is Insured and Newly Acquired Autos

The PAP's definitions decide who and what is covered. "You and resident family members" are insureds for owned and other autos; any person using "your covered auto" with permission is an insured for liability; and for non-owned autos, the named insured and resident relatives are covered while driving someone else's car they do not regularly use. The "your covered auto" definition includes vehicles shown on the Declarations, newly acquired autos, certain trailers you own, and a temporary substitute vehicle used while a covered auto is out of service.

The newly acquired auto rules are heavily tested: an additional vehicle generally has the broadest coverage the policy provides for a set window (often the insurer must be notified within 14 days), while a replacement vehicle inherits the coverage of the vehicle it replaces — and to get physical damage coverage on a replacement, the insured must request it within the stated period. Knowing these notification windows and the additional-versus-replacement distinction is a common exam point.