7.2 Exclusions and Part E Duties After an Accident

Part D Exclusions

Part D physical damage coverage on the Personal Auto Policy (PAP) is broad, but the ISO PP 00 01 form lists specific exclusions. Knowing the major ones lets you spot losses the insurer will deny even when the auto is genuinely damaged. Many exam questions describe a damaged car and ask whether Part D responds; the answer hinges on these exclusions.

Key Physical Damage Exclusions

• Public or livery conveyance - carrying persons or property for a fee (rideshare/livery), unless a share-the-expense car pool.
• Wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires - unless caused by a covered theft.
• Electronic equipment not permanently installed and certain custom or sound equipment beyond a small built-in limit.
• Radar or laser detectors, and awnings, cabanas, or camper-body equipment.
• Loss to non-owned autos used by the insured without a reasonable belief of entitlement.
• War, nuclear hazard, radioactive contamination, and government destruction/confiscation.

A subtle trap: diminution in value and the loss of use beyond the stated transportation benefit are generally not paid. Another trap involves non-owned autos - Part D extends to a non-owned auto in the insured's custody, but only for the broadest physical damage coverage applying to any owned covered auto. So if the named insured carries collision only on owned cars, a borrowed car gets collision-only treatment, never broader OTC.

Part E: Duties After an Accident or Loss

Part E lists the insured's post-loss duties - conditions precedent to coverage. Failing these duties can let the insurer deny or reduce a claim if the failure prejudices the insurer. These duties apply across the policy, not just to physical damage.

General Duties Owed to the Insurer

Additional Duties for Physical Damage and UM Claims

For a Part D physical damage loss the insured must also take reasonable steps to protect the auto from further loss (the insurer pays reasonable expenses to do so), promptly notify police of a theft, and permit the insurer to inspect and appraise the damaged property before repair or disposal. For an uninsured motorist (UM) claim involving a hit-and-run, prompt police notification is similarly required.

Exception to notice: failure to perform a duty bars recovery only to the extent the insurer is prejudiced in many states - a fact pattern testing whether minor late notice voids an otherwise valid claim.

Duties After a Loss and Common Physical-Damage Exclusions

Part E of the ISO Personal Auto Policy lists the duties after an accident or loss, and failure to comply can void coverage for that claim. The insured must promptly notify the insurer, cooperate in the investigation and any suit, send copies of legal papers, submit to physical exams and examinations under oath (EUO), and — for physical damage — permit inspection of the vehicle before repair and protect the auto from further loss.

Major exclusions span both liability and physical damage: using the vehicle as a public/livery conveyance (rideshare-for-hire), damage from war, nuclear hazard, or radioactive contamination, racing on a track, intentional acts, and wear, tear, freezing, mechanical breakdown, and road damage to tires.

Scenario: An insured is in a minor collision, drives the car for two weeks, and the unrepaired damage worsens after rain enters the body. The insurer pays the original collision damage but not the additional rust/water damage, because the insured failed the duty to protect the property from further loss. This "failure-to-mitigate" trap appears often on the exam.

Liability Exclusions and the Owned-but-Not-Insured Trap

Part A liability has several exclusions the exam revisits. Coverage does not apply to: intentional injury; property the insured owns, rents, or transports (use Part D or a property policy); liability while the auto is used as a public/livery conveyance (rideshare-for-hire); using a vehicle without reasonable belief of being entitled to it; and the owned-but-not-insured rule — a vehicle the insured owns but did not list on the policy is not covered, and a vehicle furnished or available for the regular use of the insured or a family member (other than the covered auto) is also excluded.

Worked trap: A family owns three cars but insures only two on the PAP to save premium. A licensed teen drives the uninsured third car and causes an accident. Part A denies the claim under the owned-but-not-insured exclusion, leaving the family personally liable. This contrasts with non-owned autos (a borrowed friend's car used occasionally), which are covered, illustrating the difference the exam tests between an owned vehicle that must be scheduled and a genuinely non-owned vehicle that enjoys automatic coverage.