6.1 Personal Auto Policy Structure and Eligibility

The ISO Personal Auto Policy (PAP)

The single most-tested personal lines casualty contract is the ISO Personal Auto Policy (PAP), most editions cited on exams as the PP 00 01 form. The current widely tested edition is the PP 00 01 09 18 (September 2018), though many states still test the PP 00 01 01 05. You do not need to memorize edition dates, but you must know that the PAP is a package policy that bundles several coverages into one contract sold to individuals and families for private passenger autos.

The PAP is written in clear, simplified "plain language," using the words "you" and "we." "You" means the named insured shown in the Declarations and that person's resident spouse. "We" means the insurer.

The six parts of the PAP

The policy is organized into named Parts, each lettered. Exams expect you to match a loss to the correct Part instantly.

Parts A, B, and C are the third-party and injury coverages tested in this unit. Part D is first-party physical damage. Parts E and F are conditions, not coverages.

Who is eligible and what is a covered auto

The PAP is designed for natural persons, not corporations. To be eligible, the auto must be owned by an individual or by spouses (and in some editions, owned jointly by resident relatives), and must be one of these types:

• A private passenger auto (four-wheel, of the private passenger type)
• A pickup or van with a gross vehicle weight (GVW) under 10,000 lbs, not used to deliver or transport goods for others (except farming/ranching or incidental business use)
• A trailer owned by the insured

Vehicles used as a public or livery conveyance (taxi, rideshare-for-hire) are excluded unless a share-the-expense car pool. A pickup over 10,000 lbs GVW used in business does not qualify for a PAP and must be insured on a commercial Business Auto Policy.

Four classes of "covered auto"

Part A through D coverages attach to a covered auto, defined in the Declarations and the policy as any of four categories. Memorize these distinctions because the newly acquired rules are heavily tested.

1. Any auto shown in the Declarations — the scheduled vehicles.
2. A newly acquired auto — see the worked rule below.
3. A trailer the insured owns.
4. A temporary substitute auto used while a covered auto is out of service for breakdown, repair, servicing, loss, or destruction.

Newly acquired auto rule (worked example): If the new auto is an additional vehicle, broad coverage applies, but the insured generally must ask the insurer to insure it within 14 days (PP 00 01 09 18). If the new auto replaces a covered auto, liability and medical payments transfer automatically; however, Part D physical damage continues only if the insured asks within 14 days (and only if the replaced auto carried physical damage). A trap: if you want coverage "broader than" what was on the replaced auto, you must request it within 14 days.

The Six Parts of the PAP

The ISO Personal Auto Policy is organized into lettered parts the exam expects you to recite:

Parts A, B, and C are the casualty/liability half; Part D is the physical-damage (property) half. Reading any PAP question begins with identifying which part governs.

Eligible Vehicles and Defined Autos

The PAP covers a private passenger auto, pickup or van under a stated gross weight, owned by an individual or married couple. "Your covered auto" includes vehicles on the declarations, a newly acquired auto, a trailer you own, and a temporary substitute for a covered auto that is out of service.

The newly acquired auto rule is heavily tested. An additional new vehicle gets the broadest coverage on any owned auto automatically, but the insured must ask the insurer to add it within a set window (commonly 14 days, or 4 days for physical-damage-only situations depending on edition). A replacement vehicle steps into the prior car's coverage. Knowing this grace window — and that no notice means no physical-damage coverage after it lapses — is a common scenario point.

Declarations and limit display

The Declarations page identifies the named insured, the covered autos (year/make/VIN), the coverages purchased, and the limits of liability. Liability limits are usually shown as split limits, e.g. 100/300/50, meaning $100,000 bodily injury per person, $300,000 bodily injury per accident, and $50,000 property damage per accident. A single combined limit (e.g. $300,000 CSL) is an alternative. Always read the Declarations to know which structure applies before solving a claim numeric.

The Declarations also fix the policy period (the inception and expiration dates and times, usually 12:01 a.m. standard time at the named insured's address) and the rating territory. A change such as adding a driver or moving to a new garaging address mid-term is made by endorsement, which can adjust premium pro rata. Exam questions often hinge on which document controls: the Declarations state the specific limits and autos, while the policy form supplies the standardized insuring agreements, conditions, and exclusions that apply identically to every PAP.