6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The ISO Personal Auto Policy is form PP 00 01 (e.g., the PP 00 01 09 18 edition), organized into Parts A-F.
- Parts A-D are coverage parts; Parts E and F are conditions (duties after loss and general provisions).
- Eligible insureds are natural persons; eligible vehicles are private passenger autos plus pickups/vans of 10,000 lbs GVWR or less.
- A newly acquired additional/replacement auto generally has a 14-day notice window for Part D, but only 4 days if the policy carries no Part D at all.
The ISO Personal Auto Policy (PAP)
The Personal Auto Policy (PAP) is the standard contract used to insure private passenger autos owned by individuals. The current industry form is the ISO Personal Auto Policy, form PP 00 01, most commonly examined in its widely adopted editions such as PP 00 01 09 18 (Sept 2018). State-specific endorsements amend it, but the national exam tests the unendorsed ISO base form.
The PAP is written in simplified, plain-English "reader-friendly" language and is organized into six clearly labeled parts plus declarations, definitions, and general conditions. Memorizing the lettered parts is essential because the exam phrases questions by part letter.
Anatomy of the PAP
| Part | Name | What it covers | Party |
|---|---|---|---|
| Part A | Liability Coverage | BI/PD the insured is legally liable for | Third-party |
| Part B | Medical Payments | Medical/funeral expenses of insureds | First-party |
| Part C | Uninsured/Underinsured Motorists | BI (and sometimes PD) from at-fault uninsured drivers | First-party |
| Part D | Coverage for Damage to Your Auto | Physical damage (collision / other-than-collision) | First-party |
| Part E | Duties After an Accident or Loss | Conditions the insured must satisfy | Conditions |
| Part F | General Provisions | Territory, termination, legal action, etc. | Conditions |
Parts A through D are the coverage parts; Parts E and F are conditions. Note that the declarations page lists which coverages were purchased and their limits — a coverage that has no limit shown on the dec page was simply not bought.
Who and What Qualifies
To be eligible for a PAP, the named insured must be a natural person (an individual or married couple resident in the same household), not a corporation or partnership. The vehicle must be a private passenger auto, pickup, or van rated for personal use.
Key eligibility rules:
- Pickups and vans qualify if their gross vehicle weight rating (GVWR) is 10,000 lbs or less and they are not used to deliver or transport goods for a business (incidental farming/business use and contractor use of the truck is allowed under conditions).
- Vehicles owned jointly by two or more resident relatives or by unmarried individuals living together are eligible.
- A leased vehicle (lease of 6 months or more) is treated as an owned auto.
- Trailers designed for use with a private passenger auto are covered for liability automatically.
Defined Terms That Drive Coverage
"You" and "your" mean the named insured and a resident spouse. "Family member" means a person related by blood, marriage, or adoption who is a resident of the household, including a ward or foster child and a college student living away from home who intends to return.
"Your covered auto" includes: (1) any vehicle on the dec page; (2) a newly acquired auto; (3) any trailer you own; and (4) a temporary substitute (non-owned auto used because yours is out of service).
Newly acquired auto rules (heavily tested):
- An additional auto is covered for 14 days with broad coverage; you must ask the insurer to add it within that window.
- A replacement auto receives the same coverage as the vehicle it replaced; if you want physical damage (Part D), you must notify the insurer within 14 days.
- If the policy carries no Part D on any auto, you must request collision/other-than-collision on the newly acquired auto within 4 days.
How the Pieces Fit Together
The declarations page is the personalized first page: it names the insured, describes each scheduled auto by year/make/VIN, lists the coverages purchased and their limits, shows premiums, the policy period, and any endorsements by form number. If a coverage shows no limit on the dec page, the insured simply did not buy it — exam questions exploit this by describing a loss under a coverage that was never purchased.
Each coverage part contains an insuring agreement (the promise to pay), exclusions (what is not covered), and conditions (rules the insured must follow). The definitions section at the front controls how bolded terms are read throughout the contract. Endorsements amend the base form and always take precedence over conflicting policy language.
Borrowed and Towed Vehicles
A temporary substitute auto is a non-owned vehicle the insured uses because a covered auto is out of normal use due to breakdown, repair, servicing, loss, or destruction. While in use as a substitute, it inherits the broadest coverage the replaced vehicle carried — so a borrowed loaner during a repair is protected.
Trailers designed to be pulled by a private passenger auto, pickup, or van receive automatic liability and Med Pay coverage. However, physical damage (Part D) on a non-owned or newly acquired trailer follows the limited rules of Part D and may be capped (commonly $1,500 for trailers not shown on the dec page). Distinguishing automatic liability from limited physical damage on trailers is a recurring exam point.
A pickup truck qualifies as an eligible "your covered auto" under the ISO PAP only if its gross vehicle weight rating does not exceed which figure?
An insured with no Part D physical damage on any vehicle buys a newly acquired additional auto. To obtain collision coverage on it, the insured must notify the insurer within how many days?
Newly Acquired Autos and the Trailer Rule
The PAP automatically extends to a newly acquired auto: if it is an additional vehicle, coverage is automatic for a grace period (commonly 14 days) and the broadest coverage on any owned vehicle applies; if it replaces an owned vehicle, it inherits the replaced car's coverage, but physical damage requires the insured to ask for it within the grace period (often 14 days) when no vehicle on the policy already had physical damage.
Trailers the insured owns get liability automatically but need to be scheduled for physical damage. The exam tests these grace-period mechanics and the additional-vs-replacement distinction directly.