6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The standard contract is the ISO Personal Auto Policy (PP 00 01), commonly the 09 18 edition, modified by state amendatory endorsements.
- Eligible vehicles are private passenger autos plus pickups/vans rated 10,000 lbs GVWR or less and not used to carry goods for hire.
- 'Family member' means a blood/marriage/adoption relative who resides in the household; 'you' includes the named insured's resident spouse.
- The PAP has six parts: A Liability, B Medical Payments, C UM/UIM, D Physical Damage, E Duties, F General Provisions.
- Newly acquired autos require timely notice (often 14 or 30 days) to secure full physical-damage coverage.
Personal Auto Policy Structure and Eligibility
The Personal Auto Policy (PAP) is the dominant personal-lines auto contract in the United States. Most insurers file the ISO Personal Auto Policy (PP 00 01), with the current widely used edition being PP 00 01 09 18. State-specific amendatory endorsements modify the national form to satisfy each state's financial-responsibility and no-fault laws. The PAP is written in simplified, readable language so an average policyholder can understand the agreements, exclusions, and conditions without an attorney.
Eligibility
The PAP covers private passenger autos, pickups, and vans owned by an individual or married couple (or in many editions, by other resident relatives). To qualify as an eligible vehicle, a pickup or van must have a Gross Vehicle Weight Rating (GVWR) of 10,000 pounds or less and must not be used to deliver or transport goods for compensation (except farming/ranching or incidental business use). Vehicles owned by partnerships or corporations are generally not eligible and must be insured on a commercial auto policy.
Definitions that drive coverage
Key defined terms control who and what is covered. The PAP uses bold-faced defined words throughout:
- You / your — the named insured shown in the Declarations and that person's resident spouse.
- Family member — a person related by blood, marriage, or adoption who is a resident of your household (includes a ward or foster child).
- Covered auto — any vehicle shown in the Declarations, a newly acquired auto, a trailer you own, or a temporary substitute for a covered auto that is out of service.
- Newly acquired auto — a car you become the owner of during the policy period; the insurer must usually be notified within 14 or 30 days depending on the coverage and edition.
The six parts of the PAP
The policy is organized into six lettered parts plus Declarations and a General Provisions/Definitions section. Each part is a separate insuring agreement with its own limit, exclusions, and conditions.
| Part | Coverage | Protects |
|---|---|---|
| Part A | Liability | Others you injure or whose property you damage |
| Part B | Medical Payments | Medical bills for you and your passengers |
| Part C | Uninsured/Underinsured Motorists | You, when the at-fault driver has too little or no insurance |
| Part D | Coverage for Damage to Your Auto | Physical damage to your vehicle (collision, other-than-collision) |
| Part E | Duties After an Accident or Loss | Insured's obligations |
| Part F | General Provisions | Territory, termination, legal action |
Newly acquired auto rules (an exam trap)
For an additional newly acquired auto (you keep your existing cars), the broadest coverage carries over automatically and you typically have 14 days to ask the insurer to add it. For a replacement vehicle, Part A liability follows automatically. The trap: if you carry Part D physical damage and acquire a vehicle for which you want collision/comprehensive coverage, you must request it within the stated window (often 14 days), or the new vehicle has only the broadest physical-damage coverage already on a scheduled auto - and none if you carried none. Always read the Declarations edition for the exact day count.
Declarations page and how limits are displayed
The Declarations (the 'dec page') is the personalized front of the policy. It lists the named insured and address, the policy period, each scheduled vehicle with its VIN, the coverages purchased with limits and deductibles, the premium, the lienholder/loss payee, and the rating territory. Coverages with no entry or 'no coverage' shown are simply not in force. On the exam, if a part is not shown as purchased on the dec page, assume the insured has no protection under that part regardless of what the form language would otherwise provide.
Common endorsements layered onto the PAP
Insurers tailor the national form with endorsements. High-frequency ones include the Extended Non-Owned Coverage (PP 03 06) for named individuals who regularly drive borrowed/furnished cars, Miscellaneous Type Vehicle (PP 03 23) to schedule motorcycles, motor homes, golf carts, or ATVs, Towing and Labor Costs (PP 03 03), and Joint Ownership Coverage (PP 03 34) when an unrelated person co-owns the car. State amendatory endorsements then conform the contract to local financial-responsibility, no-fault/PIP, and UM/UIM mandates - a key reason national and state portions of the exam interlock.
Under the ISO Personal Auto Policy, which vehicle is eligible for coverage as a covered auto?
A PAP names John as the insured. His wife Mary lives with him, and his 19-year-old son who is away at college returns home on breaks. Who is a 'family member' under the policy?
The Six Parts and the Definitions That Control Them
The ISO Personal Auto Policy (PP 00 01) is organized into six lettered parts, and matching a loss to the right part is the foundation for the whole auto section:
| Part | Coverage | Party |
|---|---|---|
| A | Liability (BI/PD to others) | Third party |
| B | Medical Payments | First party (occupants) |
| C | Uninsured/Underinsured Motorists | First party |
| D | Damage to Your Auto (Collision, OTC) | First party |
| E | Duties After an Accident or Loss | Conditions |
| F | General Provisions | Conditions |
Definition traps: "Your covered auto" includes vehicles on the declarations, a newly acquired auto, a trailer you own, and a temporary substitute for a covered auto out of service. "Family member" means a person related by blood, marriage, or adoption who is a resident of your household, including a ward or foster child — a definition that decides who is covered while driving. A college student living away but still a household resident usually remains a family member, a frequently tested point.