6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The ISO Personal Auto Policy (PP 00 01, current edition PP 00 01 09 18) has six Parts: A Liability, B Medical Payments, C UM/UIM, D Damage to Your Auto, E Duties After Loss, F General Provisions
- Eligibility requires a private passenger auto, pickup, or van rated 10,000 lbs GVW or less, owned by an individual or married couple and not used for business delivery or livery
- An insured includes the named insured, resident spouse, and resident family members related by blood, marriage, or adoption
- "Your covered auto" includes scheduled autos, newly acquired autos, owned trailers, and temporary substitute autos
- A newly acquired ADDITIONAL auto gets the broadest coverage on the policy during the notice window; a REPLACEMENT auto gets only the coverage of the auto it replaced
The ISO Personal Auto Policy (PAP)
The Personal Auto Policy (PAP) is the dominant ISO form used to insure private passenger autos owned by individuals. Most insurers file the PP 00 01 family of forms; the current widely used edition is the PP 00 01 09 18 (September 2018) base policy, amended by mandatory state endorsements. The PAP is written in simplified, readable language and is organized into six titled Parts plus a Declarations page and Definitions.
The six Parts every candidate must memorize, in order:
| Part | Coverage |
|---|---|
| Part A | Liability Coverage (BI and PD to third parties) |
| Part B | Medical Payments Coverage |
| Part C | Uninsured/Underinsured Motorists Coverage |
| Part D | Coverage for Damage to Your Auto (physical damage) |
| Part E | Duties After an Accident or Loss |
| Part F | General Provisions |
This unit covers the injury and liability Parts: A, B, and C. Part D (collision/comprehensive) and the conditions in Parts E and F are addressed in other units.
Eligibility
The PAP is a personal lines form. To be eligible the vehicle must be:
- A private passenger auto, pickup, or van not exceeding 10,000 lbs gross vehicle weight (GVW), and
- Owned by an individual or by a husband and wife who are residents of the same household, or owned by other relatives or a partnership/joint ownership when properly endorsed.
Pickups and vans qualify only if not used to deliver or transport goods for business purposes (other than farming/ranching) and not rented to others. A vehicle used as a public livery (taxi/rideshare-for-hire) is not eligible without endorsement. Vehicles owned by a corporation or used primarily in business belong on a commercial auto (BAP) policy instead.
Who Is an Insured and the Insured Auto
Named insured and family
The named insured is the person(s) shown on the Declarations and that person's spouse if a resident of the same household. "Family member" means a person related by blood, marriage, or adoption who is a resident of the household, including a ward or foster child. A college student living away from home generally remains a resident family member.
"Your covered auto"
The term your covered auto includes four categories:
| Category | Notes |
|---|---|
| Vehicle shown in Declarations | The scheduled autos |
| Newly acquired auto | Additional or replacement; coverage applies automatically for a stated window (typically 14 days), then you must notify the insurer |
| Trailer you own | Owned trailers |
| Temporary substitute auto | A vehicle not owned by you used because yours is out of service for repair, servicing, breakdown, loss, or destruction |
Trap. A newly acquired auto that is an additional vehicle gets the broadest coverage you carry until you report it, but a replacement vehicle gets only the coverage that applied to the auto it replaced. Comprehensive/Collision on a newly acquired auto applies only if you already carry that coverage on at least one auto and you ask for it within the notice window (often 14 days, with a $500 deductible default if none requested).
Eligibility and the Definition of "Covered Auto"
The PAP is restricted to eligible vehicles: a private passenger auto, pickup, or van owned or leased by an individual (or spouse), rated 10,000 lbs GVWR or less, and not used to carry persons or property for a fee. Vehicles used in business (other than farming/ranching) or as a public/livery conveyance fall outside the PAP and require a commercial auto policy.
The defined term "your covered auto" is broader than the scheduled vehicles and is heavily tested:
| Category | Covered status |
|---|---|
| Vehicles on the Declarations | Covered |
| Newly acquired auto | Covered automatically for a window (commonly 14 days), with rules differing for added vs. replacement vehicles |
| Trailer you own | Covered |
| Temporary substitute auto | A non-owned vehicle used while yours is out of service is covered |
Who Is an "Insured" and the Two-Person Insured
The PAP defines insureds differently per coverage. For liability (Part A), an insured includes the named insured and resident family members for any auto, plus any person using your covered auto with permission. For physical damage (Part D), coverage follows the auto, not broad permissive users. This split — person-based liability versus vehicle-based physical damage — is the structural key to the entire PAP.
Worked Eligibility Scenario
A rideshare driver uses a personal sedan to carry passengers for fares. Because the auto is now a public/livery conveyance, the unendorsed PAP excludes the activity, leaving the driver uninsured during fares unless a rideshare/livery endorsement or commercial coverage is added. The exam uses delivery and rideshare fact patterns to test whether candidates remember the fee-for-hire eligibility line that separates the PAP from commercial auto.
Termination, Cancellation, and Nonrenewal
The PAP and state law govern how the policy ends. The insurer's right to cancel mid-term is restricted after the policy has been in force beyond an initial period (often 60 days): thereafter the insurer may generally cancel only for nonpayment, license suspension/revocation, or material misrepresentation. Nonrenewal lets either party decline to continue at the end of the term with proper advance notice. These limits protect policyholders from arbitrary mid-term loss of mandatory auto coverage, and the notice periods are a frequent state-law crossover question.
A PAP-eligible private passenger van is limited to a gross vehicle weight (GVW) not exceeding:
An insured buys a SECOND car as an ADDITIONAL vehicle and crashes it three days later before notifying the insurer. How does the PAP respond?