6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The exam tests ISO form PP 00 01 (current PP 00 01 09 18); know it is written in plain language with controlling defined terms 'you' and 'family member'.
- PAP eligibility requires an individually/jointly owned private passenger auto, or a pickup/van of 10,000 lbs GVW or less not used to deliver goods.
- The six parts are A Liability, B Medical Payments, C Uninsured Motorists, D Damage to Your Auto, E Duties, F General Provisions (mnemonic LMUP for coverage parts).
- Named insureds and family members carry liability into non-owned autos; an outside permissive user is insured only while in your covered auto.
- Newly acquired additional/replacement autos and temporary substitutes are covered autos; reporting windows are 14 days (with physical damage) or 4 days (no physical damage).
The PAP and Its Governing Form
The Personal Auto Policy (PAP) is the standard contract used to insure individually owned private passenger vehicles. The exam is built almost entirely around the Insurance Services Office (ISO) form PP 00 01, most recently the PP 00 01 09 18 edition. Memorize that the PAP is written in simplified, plain-English style and relies on defined terms that drive nearly every coverage question.
Two defined terms control everything else. "You" / "your" means the named insured shown on the Declarations and that person's resident spouse (a spouse who ceases to reside in the household stays a "you" for 90 days or until the policy period ends or a separate policy is issued, whichever comes first). A "family member" is a person related to you by blood, marriage, or adoption who is a resident of your household, including a ward or foster child.
Eligibility Rules
The PAP is designed for private passenger autos owned or leased by an individual or married couple (or, with the Joint Ownership Coverage endorsement PP 03 34, by certain non-spouse co-owners or domestic partners). To be eligible, the vehicle must be a four-wheeled private passenger auto, or a pickup/van under a stated gross-vehicle-weight limit, not used for the delivery of goods or materials.
| Eligibility Factor | Requirement |
|---|---|
| Ownership | Owned/leased by an individual or married couple |
| Vehicle type | 4-wheel private passenger auto; or pickup/van under 10,000 lbs GVW |
| GVW limit (pickup/van) | 10,000 lbs gross vehicle weight or less |
| Use restriction | Not for delivery/transport of goods (except farm/ranch, occasional incidental use) |
| Lease term | 6 continuous months or more = a "covered auto" |
Vehicles used as a public or livery conveyance (taxi, ride-share for hire) are generally excluded unless a special endorsement is added. A pickup/van under the weight limit may carry permanently installed equipment without losing eligibility.
The Six Parts of the PAP
The policy is organized into six parts. The first four are coverage parts; the last two are administrative.
| Part | Name | Function |
|---|---|---|
| Part A | Liability Coverage | Pays third parties for BI and PD you are legally liable for |
| Part B | Medical Payments | Pays your/passengers' medical bills regardless of fault |
| Part C | Uninsured Motorists | Pays your injuries when the at-fault driver has no/too little insurance |
| Part D | Coverage for Damage to Your Auto | Collision and Other Than Collision on your own vehicle |
| Part E | Duties After an Accident or Loss | Notice, cooperation, proof of loss |
| Part F | General Provisions | Territory, termination, legal action, subrogation |
A common mnemonic for the coverage parts is LMUP — Liability, Medical, Uninsured motorists, Physical damage.
Who Is an Insured and "Your Covered Auto"
Who qualifies as an insured depends on which vehicle is being driven. The named insured and family members carry coverage with them; outside permissive users do not.
- Named insured ("you"), resident spouse, resident family member: insured in your covered auto AND in any other (non-owned) auto.
- Any other person using your covered auto with permission: insured only while in your covered auto — coverage does not follow them into another car.
Key trap: A friend who borrows your car is an insured only while in your covered auto. You and your family members stay insured even when driving someone else's car.
The definition of "your covered auto" has four buckets: (1) any vehicle shown on the Declarations; (2) a newly acquired auto (additional or replacement); (3) a trailer you own; and (4) a temporary substitute vehicle used while a covered auto is out of service due to breakdown, repair, servicing, loss, or destruction.
For a newly acquired additional auto, broad coverage applies but you must ask the insurer to insure it within 14 days. For Part D (physical damage) on a newly acquired additional auto, you also have 14 days to report; if you carry no physical damage on any vehicle, coverage on a new acquisition lasts only 4 days. A replacement auto inherits the broadest coverage and need not be reported for liability, but Part D coverage must be requested within 14 days.
Maria drives her own PAP-covered sedan but borrows her neighbor Tom's pickup with his permission and causes an accident. Tom also lets his coworker, who has no auto policy, borrow that same pickup another day. Under Maria's PAP, who is an insured?
An insured who carries NO physical damage coverage on any vehicle buys an additional second car. For how long does automatic Part D coverage extend to that newly acquired additional auto before it must be reported?
Newly Acquired, Temporary Substitute, and Non-Owned Autos
The PAP's definition of covered vehicles extends beyond the declarations in tested ways:
| Vehicle category | Treatment |
|---|---|
| Newly acquired auto | Automatically covered; the insured must report an additional vehicle within 14 days (broad coverage) — a replacement vehicle often inherits the same coverage automatically |
| Temporary substitute | A vehicle used while the covered auto is being repaired/serviced is covered as if it were the covered auto |
| Non-owned auto | A vehicle driven with permission but not owned/furnished for regular use is covered for the named insured and spouse |
| Trailer owned by insured | Liability follows; physical damage may need scheduling |
Trap: a vehicle furnished or available for the insured's regular use (e.g., a company car) is excluded as a non-owned auto — a frequent distractor. The 14-day reporting window for newly acquired autos is a classic numeric answer.
An insured buys an additional vehicle. Under broad newly-acquired-auto provisions, within how many days must the insured typically ask the insurer to add it to retain full coverage?