6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- ISO form PP 00 01 09 18 is the standard PAP; "you" means the named insured plus resident spouse, and a "family member" must be a resident relative by blood, marriage, or adoption.
- Residency depends on household relationship and intent to return, so students at temporary school residences remain covered family members.
- The PAP has six parts (A-F); the standard policy period is 6 months.
- An additional newly acquired auto has a 14-day automatic coverage window when the insurer covers all other owned vehicles.
The PAP as the Standard Personal-Lines Auto Contract
The Personal Auto Policy (PAP) is the contract used to insure individually owned private passenger vehicles. The most heavily tested version on the national portion is the Insurance Services Office (ISO) form PP 00 01 09 18 (the September 2018 edition you will see on the exam). The PAP is written in simplified, plain language and relies on a small set of defined terms that drive nearly every coverage question. Master the definitions first; the coverage parts then become mechanical.
Who Is an Insured: "You" and "Family Member"
Two defined terms control eligibility. "You" and "your" mean the named insured shown on the Declarations and that person's resident spouse. A spouse who moves out keeps named-insured status for up to 90 days or until the policy period ends, whichever is first. A "family member" is a person related to the named insured by blood, marriage, or adoption who is a resident of the same household, expressly including a ward or foster child.
Residency is the trap. A college student living away at school is still a resident family member if the school is a temporary residence and the student intends to return home. By contrast, an adult child who has permanently moved out and established a separate household is not a family member and gets no coverage while driving a non-owned auto. Exam questions test the boundary, so read the fact pattern for permanence of the move and intent to return.
Covered Autos and Eligibility
The PAP covers private passenger autos, pickups, and vans that are owned or leased (lease of at least 6 months) by an individual or spouses who are residents of the same household. Pickups and vans must have a gross vehicle weight rating of 10,000 lbs or less and not be used for delivery or for the named insured's business (other than farming or ranching). The four covered-auto categories are:
| Category | What it covers |
|---|---|
| Your covered auto | Any vehicle shown on the Declarations |
| Newly acquired auto | Additional or replacement vehicles, subject to notice rules |
| Trailer you own | Utility/boat/camper trailers designed for use with a private passenger auto |
| Temporary substitute | A non-owned auto used while yours is out of service for breakdown, repair, servicing, loss, or destruction |
Newly Acquired Auto Rules (Frequently Tested)
The notice period depends on whether the vehicle is additional or a replacement:
- Additional auto acquired during the policy period: covered automatically for 14 days, but only if the insurer insures all other owned vehicles. You must ask the insurer to add it within 14 days.
- Replacement auto: broad coverage continues automatically; however, no Coverage D (physical damage) applies unless you ask the insurer to insure it within 14 days (or 4 days if no physical-damage coverage existed on the replaced vehicle, depending on edition language — use 14 days under PP 00 01 09 18).
Worked example: An insured who carries collision on all three listed autos buys a fourth car on June 1. It is automatically covered through June 15 (14 days). If a covered loss occurs June 20 and the insured never reported the car, there is no coverage — the grace window expired.
The Six Parts of the PAP
| Part | Coverage | Pays for |
|---|---|---|
| Part A | Liability | Bodily injury and property damage you cause to others |
| Part B | Medical Payments | Medical/funeral expenses for you and passengers, regardless of fault |
| Part C | Uninsured/Underinsured Motorists | Your injuries when the at-fault driver has no or too little insurance |
| Part D | Coverage for Damage to Your Auto | Collision and Other Than Collision (physical damage to your car) |
| Part E | Duties After an Accident or Loss | Conditions the insured must satisfy |
| Part F | General Provisions | Territory, cancellation, legal action, two-or-more-policies |
The standard policy period is 6 months, and premiums are quoted per term. Units 6.1 through 6.4 of this guide cover Parts A, B, and C; physical damage (Part D) is treated separately.
An insured's 19-year-old daughter lives in a dormitory at an out-of-state university and returns home each summer. While driving a friend's car at school, she causes an accident. Under the PAP, is she an insured?
An insured who insures all owned vehicles with the same company buys an ADDITIONAL car on March 3. What is the automatic coverage window before the insurer must be notified?
Personal Auto Policy Structure and the Four Parts
The Personal Auto Policy (PAP) is the standard contract for individuals and families, organized into a declarations page, definitions, and four coverage parts plus general provisions. Part A is Liability, Part B is Medical Payments, Part C is Uninsured/Underinsured Motorists, and Part D is Coverage for Damage to Your Auto (physical damage). Part E (Duties After an Accident or Loss) and Part F (General Provisions) round out the contract.
The insured selects which parts to buy, so a policy may carry liability and physical damage but decline medical payments, which is why reading the declarations to see which parts are in force is the first analytical step.
Eligibility for the PAP
The PAP is designed for private passenger autos, pickups, and vans owned by an individual or by a married couple (and in many states by other resident relatives), used for personal purposes. Vehicles used primarily in business, vehicles with more than a stated weight, and vehicles owned by corporations or partnerships generally do not qualify and must be insured on a commercial auto form. A pickup used in a business beyond incidental use, or a vehicle titled to a business entity, signals that the PAP is not the proper form and a Business Auto policy is required.
Covered Autos and Newly Acquired Vehicles
The PAP covers four categories of your covered auto: vehicles shown in the declarations; newly acquired autos (additional or replacement vehicles) for a limited period during which the insured must notify the insurer (commonly 14 days, with the breadth of automatic coverage depending on whether the policy already has the relevant coverage); a trailer the insured owns; and a temporary substitute auto used while a covered auto is out of service for repair, servicing, or breakdown. The newly-acquired-auto rules are heavily tested, because the automatic coverage and the notification deadline determine whether a just-purchased car is covered.
Key Definitions: You, Family Member, and Insured
The PAP defines you and your as the named insured and resident spouse, and family member as a person related by blood, marriage, or adoption who is a resident of the household, including a ward or foster child. These definitions matter because Parts A, B, and C extend protection to family members even when they drive non-owned autos, while a non-resident relative or an unrelated roommate is not a family member and receives narrower protection.
A scenario hinging on whether a college student living away, a resident in-law, or a roommate is a family member is testing these definitions, because the answer changes which coverages follow that person.
How the Parts Work Together
In a single accident the parts coordinate: Part A pays third parties the insured injures or whose property the insured damages; Part B pays the insured's and passengers own medical bills regardless of fault; Part C pays the insured's injuries when an at-fault driver is uninsured or underinsured; and Part D pays to repair the insured's own vehicle (collision and other-than-collision), subject to a deductible.
Recognizing which part responds to which party, the third party, the insured, or the insured's vehicle, and remembering that the owned-but-not-insured rule can exclude a second household car not listed on the policy, is the integrating skill the exam rewards across all PAP questions.