7.2 Exclusions and Part E Duties After an Accident

Part D Exclusions

The ISO Personal Auto Policy (PP 00 01) lists specific Part D exclusions that remove physical-damage coverage even for an otherwise covered vehicle. Examiners test these heavily because they distinguish a covered claim from a denied one.

Key Part D exclusions:

• Wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires — maintenance and gradual loss are never covered (unless a tire loss results from a covered total theft).
• Loss to electronic equipment designed to reproduce sound/video (radar detectors, custom electronics) and tapes/discs/media — limited or excluded without endorsement.
• Loss to a vehicle used as a public or livery conveyance (taxi, ride-share carrying passengers for a fee) — a major modern trap.
• Loss due to destruction or confiscation by governmental or civil authorities because the auto was used in illegal activity.
• Loss to a non-owned auto used without a reasonable belief of permission.
• Loss to camper bodies, trailers, or motor homes not described or shown in the Declarations.
• Radioactive contamination, war, and nuclear hazard.

Custom Equipment and the $1,500 Sub-Limit

The PAP provides only a small built-in limit (commonly $1,500) for custom furnishings or equipment in or on a pickup or van — caps, bed liners, custom murals, special carpeting, height-extending roofs. Higher exposures require the Customized Equipment Endorsement or a scheduled value. Aftermarket stereo and electronic equipment permanently installed but not factory-installed also needs to be scheduled.

Trap: A driver who begins delivering for a ride-share or food-delivery platform usually voids personal Part D and liability while logged on and carrying for a fee. A ride-share / TNC endorsement or commercial policy is required to fill that gap.

Why the Public/Livery Exclusion Matters

The public or livery conveyance exclusion is the most heavily tested modern PAP gap. Carrying passengers or property for a fee converts a personal-use risk into a commercial one the personal policy was never rated for. Share-the-expense car pools are an exception and remain covered — the test is whether the insured is in the business of transporting people or goods. A driver who occasionally splits gas with coworkers keeps coverage; a driver logged into a transportation network company carrying a paying rider does not, unless endorsed.

Part E: Duties After an Accident or Loss

Part E — Duties After an Accident or Loss is a set of conditions the insured must satisfy to trigger the carrier's payment obligation. Failure to perform these duties, where the breach prejudices the insurer, can void coverage for that claim. Part E is universal — it applies to all PAP coverage parts (A through D), not just physical damage.

General duties owed by any person seeking coverage:

1. Prompt notice to the insurer of how, when, and where the accident or loss happened, with names and addresses of injured persons and witnesses.
2. Cooperate with the insurer in the investigation, settlement, or defense of any claim or suit.
3. Send copies of legal papers (summons, complaint) promptly if sued.
4. Submit to a physical exam by physicians the insurer chooses, as often as reasonably required, and to an examination under oath (EUO).
5. Authorize the insurer to obtain medical reports and other pertinent records.
6. Submit a proof of loss when required.

Additional Duties for UM and Physical Damage Claims

For an Uninsured Motorists (Part C) claim, the insured must additionally notify police promptly if a hit-and-run driver is involved and send copies of legal papers if the insured sues the uninsured motorist.

For a Part D (physical damage) claim, the insured must additionally:

• Take reasonable steps after a loss to protect the auto and its equipment from further damage — the insurer pays reasonable expenses incurred to do so (for example, towing a wreck to a secure lot or tarping a broken window).
• Promptly notify the police if the auto is stolen.
• Permit the insurer to inspect and appraise the damaged property before its repair or disposal.

Appraisal and the Effect of Breach

When the insurer and insured disagree on the amount of a Part D loss, the Appraisal condition lets either party demand appraisal: each selects a competent appraiser, the two appraisers choose an umpire, and agreement by any two of the three sets the amount. Appraisal resolves value, not coverage — a denial based on an exclusion is not an appraisal dispute. Each party pays its own appraiser and shares the umpire cost equally.

Breach of a Part E duty does not automatically void the entire policy. Most courts and statutes require the insurer to show it was prejudiced by the breach — for example, that late notice or pre-inspection repair actually impaired its ability to investigate. A trivial delay that caused no harm rarely defeats an otherwise valid claim. Still, on the exam the safe answer is that non-compliance can reduce or deny the claim, because the duties are conditions precedent to the carrier's payment obligation.