7.2 Exclusions and Part E Duties After an Accident

Part D Exclusions

Part D contains its own list of exclusions that limit physical damage recovery. Knowing them lets you spot the answer when a question describes a loss that looks covered but is not. The most heavily tested Part D exclusions are:

• Public or livery conveyance — using the auto to carry persons or property for a fee (taxi, ride-share for hire); share-the-expense car pools are not excluded.
• Wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires — unless the damage results from a covered theft.
• Radioactive contamination, war, and nuclear hazard.
• Destruction or confiscation by a government or civil authority.
• Racing — loss while the auto is in or practicing for any prearranged or organized racing or speed contest.
• Electronic equipment designed to reproduce sound (and its media) unless permanently installed; custom furnishings or equipment in pickups/vans; awnings, cabanas, and camper equipment — covered only when scheduled.

Non-Owned Autos and the Rental Trap

Part D extends to a non-owned auto the named insured or a family member operates, but only with the broadest limit of liability afforded for any covered auto shown on the policy. A subtle trap: if the named insured carries no physical damage coverage on any owned auto, there is no Part D coverage to extend to a rental car. The insured who declines collision on his own car cannot rely on the PAP to cover a rental's collision loss.

Exam point: A rental/temporary-substitute auto inherits the broadest Part D coverage on the policy, with the highest deductible of any covered auto applying. The PAP also adds a $30/day diminished-value-and-loss-of-use sublimit for non-owned autos in the current edition.

Part E: Duties After an Accident or Loss

Part E is not a coverage — it lists the insured's conditions that must be met for any claim to be paid. Failure to comply can void coverage for that loss. The general duties applying to all parts are:

1. Prompt notice to the insurer of how, when, and where the accident or loss happened, plus the names and addresses of injured persons and witnesses.
2. Cooperate with the insurer in the investigation, settlement, or defense of any claim.
3. Forward promptly any legal papers (summons, complaint) received.
4. Submit, as often as reasonably required, to physical exams by physicians the insurer chooses and to examinations under oath (EUO).
5. Authorize the insurer to obtain medical and other relevant records.

Additional Duties for Part C (UM) and Part D Claims

Some duties apply only to specific parts:

Trap: Repairing a damaged vehicle before the insurer inspects it can jeopardize the Part D claim — the insurer has the right to appraise the loss first. Likewise, failing to report a theft to the police breaches a Part D duty and can defeat the claim.

Appraisal and Proof of Loss

If the insured and insurer disagree on the amount of a Part D loss (not coverage), either party may demand appraisal. Each side selects a competent appraiser; the two appraisers choose an umpire. The appraisers state separately the ACV and amount of loss; if they cannot agree, the umpire decides. An agreement by any two of the three (two appraisers, or one appraiser and the umpire) is binding as to the amount. Each party pays its own appraiser and shares the umpire's cost equally. Appraisal resolves amount disputes only — it never decides whether coverage applies.

The insured may also be required to submit a sworn proof of loss when the insurer requests it. These conditions exist to confirm the loss is genuine and to fix its dollar value efficiently without litigation.

Why Duties Decide Claims on the Exam

Exam questions often describe a loss that is plainly within Part D's insuring agreement, then bury a Part E violation in the facts: the insured repaired the car first, never reported the theft to police, refused an examination under oath, or failed to give prompt notice while the trail went cold. The correct answer is usually that the insurer may deny or reduce the claim for breach of a condition, not that the loss was never covered.

Train yourself to separate two questions: first, is the loss within an insuring agreement and not excluded? and second, did the insured satisfy the Part E duties? A claim can fail the second test even when it passes the first, and that gap is exactly what the test writers probe.

Part D Exclusions and the Duties After Loss

The PAP excludes several physical-damage exposures the exam tests directly. There is no Part D coverage for wear and tear, freezing, mechanical or electrical breakdown (except for a stolen vehicle), or road damage to tires, because these are maintenance items, not fortuitous losses. Loss to a vehicle used as a public or livery conveyance (for-hire ride-share carrying passengers), to electronic equipment not permanently installed, and to custom furnishings or equipment in a pickup or van beyond a small sublimit is also excluded unless scheduled.

Damage from war, nuclear hazard, and radioactive contamination is excluded as in every line.

The Duties After an Accident or Loss (Part E) condition is a frequent point-scorer because a breach can defeat an otherwise valid claim. The insured must promptly notify the insurer, cooperate in the investigation and any suit, send copies of legal papers, submit to examination under oath and physical exams when reasonably required, allow inspection and appraisal of the damaged auto before repair, and notify the police when a covered auto is stolen. For Med Pay and UM claims the insured must also authorize medical records.

Failure to perform these duties, where it prejudices the insurer, is grounds to deny — examiners reliably hide a missed notice or a repaired-before-inspection fact in the stem.