6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The PAP (ISO PP 00 01) is a package of lettered Parts A through F, each a distinct coverage or condition.
- Part A (liability) and Part C (UM/UIM) are casualty coverages; Part D handles physical damage.
- Eligible vehicles are personally owned private passenger autos and light pickups/vans not used for hire.
- Insureds include the named insured, resident family members, and permissive users of the covered auto.
- Public/livery use and corporate ownership push a risk out of the PAP into commercial auto.
The Personal Auto Policy at a Glance
The Personal Auto Policy (PAP) is the industry-standard contract that insures private passenger autos owned by individuals. Most states use the Insurance Services Office (ISO) PAP form, commonly the PP 00 01 edition, as the baseline that carriers modify with endorsements. Exam questions assume the ISO form unless a state form is named.
The PAP is a package policy: one contract bundling several distinct coverages. You must know each Part by letter because the exam tests them separately.
The Six Components
The PAP is organized into a Declarations page plus an Agreement/Definitions section, followed by lettered Parts:
| Part | Coverage | Type |
|---|---|---|
| Part A | Liability | Third-party |
| Part B | Medical Payments | First-party |
| Part C | Uninsured/Underinsured Motorists | First-party |
| Part D | Coverage for Damage to Your Auto (physical damage) | First-party |
| Part E | Duties After an Accident or Loss | Conditions |
| Part F | General Provisions | Conditions |
Third-party coverage pays others for harm you cause; first-party coverage pays you or your passengers.
Eligibility
The PAP covers a private passenger auto, a pickup or van under a stated gross vehicle weight (typically 10,000 pounds) not used for delivery, and certain trailers. The vehicle must be owned by an individual or by a married couple, or in some states owned by relatives in the same household.
Vehicles used as a public or livery conveyance (taxi, rideshare-for-hire) are excluded. A vehicle owned by a partnership or corporation generally needs a commercial auto policy, not a PAP.
Who Is an Insured
The named insured is shown on the Declarations. Coverage extends to:
- The named insured and any family member (a person related by blood, marriage, or adoption who is a resident of the household, including a ward or foster child).
- Any person using your covered auto with permission.
- For Part A, any person or organization legally responsible for acts of an insured using a covered auto.
Newly acquired autos are automatically covered, but notice rules differ by coverage. For an added vehicle, the insured generally must ask for coverage within 14 days; for a replacement vehicle, broader automatic coverage applies. A common trap: a borrowed friend's car is a non-owned auto, covered for liability but treated differently for physical damage.
A married couple owns a pickup with a gross vehicle weight rating of 8,500 pounds used to commute and run personal errands. Which statement is correct?
Which person is NOT automatically an 'insured' under Part A of an unendorsed PAP?
Exam Traps
- A resident relative is a family member even without being named; a college student living away temporarily usually still qualifies as a resident.
- Permissive use extends Part A liability to a borrower of your covered auto.
- The PAP is a named-perils/named-coverages contract by Part, not a single blanket of protection.
Eligibility, Newly Acquired Autos, and Definitions
The ISO Personal Auto Policy (PP 00 01) is designed for private passenger autos, pickups, and vans owned by an individual or by a married couple, used for personal/farm purposes and not for hire. Vehicles with a gross weight over the form's threshold or used to carry persons/property for a fee generally need a commercial auto policy instead — a common eligibility trap.
The definition of "your covered auto" includes: (1) vehicles shown on the declarations; (2) a newly acquired auto; (3) any trailer you own; and (4) a temporary substitute auto used because the covered auto is out of service. The newly acquired auto rules are heavily tested:
| Situation | Coverage for a newly acquired auto |
|---|---|
| Replaces a vehicle on the policy | Broad coverage automatically; report within 14 days for physical damage if you want it continued |
| Additional vehicle | Covered if you ask the insurer to insure it, generally within 14 days |
| No physical damage on any current auto | Must specifically request and pay for physical damage on the new auto |
Definition trap: A "family member" is a person related by blood, marriage, or adoption who is a resident of the household, including a ward or foster child. A college student living away but still a household resident usually qualifies, extending coverage to the student's use of covered and non-owned autos.
Six Parts of the PAP and Trailer/Substitute-Auto Traps
The ISO Personal Auto Policy is organized into six lettered parts that the exam tests as a unit: Part A (Liability), Part B (Medical Payments), Part C (Uninsured/Underinsured Motorists), Part D (Coverage for Damage to Your Auto), Part E (Duties After an Accident or Loss), and Part F (General Provisions). Each part has its own insuring agreement, exclusions, and conditions, and an applicant can buy some parts (e.g., liability only) without others.
| Part | Coverage |
|---|---|
| A | Liability (third-party BI/PD) |
| B | Medical payments (first-party) |
| C | Uninsured/underinsured motorists |
| D | Physical damage to your auto |
| E | Duties after a loss |
| F | General provisions/territory |
The temporary substitute auto (a vehicle used while the covered auto is out of service for repair/servicing/loss) is automatically a covered auto for liability and medical, but the exam stresses it must not be owned by or furnished for the regular use of the insured. Trailers owned by the insured are covered for liability but get physical damage only if endorsed. These eligibility and definition nuances are common multiple-choice traps.
- The ISO PP 00 01 Personal Auto Policy is the national baseline; states modify it by endorsement.
- The policy is split into Parts A through F, each tested separately on the exam.
- Eligible vehicles are private passenger autos, light pickups/vans, and trailers owned by individuals.
- Insureds include the named insured, resident family members, and permissive users of the covered auto.