6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The examined form is ISO PP 00 01 (09 18), organized into Declarations plus Parts A–F.
- Part A = Liability, B = Medical Payments, C = UM/UIM, D = physical damage, E = duties, F = general provisions.
- Eligible autos are private-passenger four-wheel vehicles or pickups/vans rated 10,000 lbs GVWR or less, owned by individuals.
- 'You' = named insured plus resident spouse; 'family member' = resident relative including students living away.
- Newly acquired autos get a 14-day reporting window; replacement-auto physical damage can leave a gap if not requested.
The ISO Personal Auto Policy (PAP)
The Personal Auto Policy is the most-tested form on the national portion of the P&C exam. The current edition examined on most state tests is the ISO PP 00 01 (09 18) form. The PAP is a package policy combining liability, medical, uninsured-motorist, and physical-damage coverages in one contract. It is written almost entirely in plain English using personal pronouns ('you,' 'we,' 'your covered auto') and is organized into six numbered parts plus declarations.
The Six Parts of the PAP
Memorize the part letters. Exam questions routinely ask 'Which Part responds to X?'
| Part | Coverage | Pays |
|---|---|---|
| Declarations | Identifies insureds, autos, limits, premium | n/a |
| Part A | Liability | BI/PD you are legally liable for |
| Part B | Medical Payments | Medical bills of insureds, regardless of fault |
| Part C | Uninsured/Underinsured Motorists | Your BI when at-fault driver has no/low limits |
| Part D | Coverage for Damage to Your Auto | Physical damage (Collision, Other Than Collision) |
| Part E | Duties After an Accident or Loss | Insured's obligations |
| Part F | General Provisions | Territory, termination, legal action |
Eligibility
The PAP is designed for private passenger autos owned by individuals. To qualify, the vehicle must be a four-wheel motor vehicle of the private-passenger type, or a pickup or van with a Gross Vehicle Weight Rating (GVWR) of 10,000 lbs or less not used for delivery or business (other than farming/ranching). Eligible named insureds are individuals — a corporation cannot be a named insured on a PAP. Vehicles owned jointly by a husband and wife, or by unmarried individuals residing in the same household, are eligible.
Who Is an Insured (Definitions)
The PAP defines insureds differently for each Part, but the core terms are:
- You and 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, including a ward or foster child. A college student living away from home is still a resident family member if the parental home remains their primary residence.
- Your covered auto = any vehicle on the Declarations, a newly acquired auto, a trailer you own, and a temporary substitute auto for one out of service due to breakdown or repair.
Newly Acquired Autos — The Reporting Trap
A newly acquired auto is automatically covered, but the rules differ by acquisition type and coverage:
- Additional auto: covered for the broadest coverage on any auto, with no reporting required for liability/med-pay/UM, and you have 14 days to report it.
- Replacement auto: liability coverage continues automatically, but for physical damage (Part D) you must ask the insurer to add coverage within 14 days if the replaced auto carried physical damage; otherwise a gap exists.
Exam trap: if the existing auto had no physical-damage coverage, a newly acquired replacement gets Part D only if requested within 4 days. Know the 14-day general window.
The Six Parts of the PAP
The Personal Auto Policy is built from six lettered parts plus declarations and definitions:
| Part | Coverage |
|---|---|
| A | Liability (BI and PD to others) |
| B | Medical payments |
| C | Uninsured / underinsured motorists |
| D | Coverage for damage to your auto (physical damage) |
| E | Duties after an accident or loss |
| F | General provisions |
Eligibility and "Private Passenger Auto"
The PAP insures a private passenger auto, pickup, or van owned or leased by an individual or spouse (or, with an endorsement, by a non-business partnership/LLC formed by family members). Vehicles used for public livery, delivery (with exceptions), or commercial purposes generally fall outside the PAP and require a business auto policy. A pickup or van must be under a stated gross-vehicle-weight limit and not used to deliver goods for a fee beyond incidental farming or business use.
Defined Auto Categories
The definitions section is exam gold because coverage often turns on which defined auto is involved:
- Your covered auto: vehicles on the declarations, a newly acquired auto, a trailer you own, and a temporary substitute for a covered auto out of service.
- Newly acquired auto: additional vehicles get broad coverage automatically (often 14 days to report); replacement vehicles inherit the replaced vehicle's coverage but physical damage may need to be requested.
- Non-owned auto / temporary substitute: a borrowed or rental vehicle used while yours is being repaired.
Who Is an Insured
For liability, an insured includes you and family members for any auto, any person using your covered auto with permission, and any person or organization legally responsible for acts of a covered insured using a covered auto. Distinguishing the broad "you and family members" category from the narrower "permissive user of your covered auto" category is one of the most repeated PAP exam concepts.
Trailers, Newly Acquired Autos, and Termination
Three eligibility details complete the PAP framework. A trailer the insured owns is a covered auto for liability automatically, but physical damage on a trailer may require it to be described. A newly acquired auto that replaces a covered auto inherits its coverage, while an additional newly acquired auto gets the broadest coverage the policy provides if reported within the stated window (often 14 days).
The termination provisions limit the insurer's right to cancel after the policy has been in effect 60 days - generally only for nonpayment, license suspension, or fraud - and require advance notice, a consumer-protection rule that frequently mirrors the state's own cancellation statute on the Montana portion.
A corporation wants to insure five company sedans under a Personal Auto Policy. Why is this ineligible?
An insured buys an additional (not replacement) auto. How long is it automatically covered before it must be reported to the insurer for liability coverage?