6.1 Personal Auto Policy Structure and Eligibility
Key Takeaways
- The Insurance Services Office (ISO) Personal Auto Policy form PP 00 01 (current edition PP 00 01 09 18) is organized into six parts: A Liability, B Medical Payments, C Uninsured Motorists, D Damage to Your Auto, E Duties After an Accident, and F General Provisions.
- "You" means the named insured on the Declarations plus that person's spouse if a resident of the same household; a "family member" is a blood, marriage, or adoption relative who resides in the household.
- Eligible vehicles are private passenger autos and pickups or vans rated 10,000 pounds or less Gross Vehicle Weight Rating (GVWR) and not used to deliver goods for a fee.
- A newly acquired auto has automatic coverage, but reporting windows differ: 14 days when the policy already insures an auto, with a 4-day rule for physical damage when no auto currently carries it.
- A permissive user is an insured only while occupying your covered auto; the named insured and family members carry liability coverage with them into non-owned autos.
The Personal Auto Policy at a Glance
The Personal Auto Policy (PAP) is the standard contract that insures individually owned, four-wheeled passenger vehicles. The most heavily tested version on the national portion of the licensing exam is the Insurance Services Office (ISO) form PP 00 01, currently the PP 00 01 09 18 edition. The PAP uses simplified, plain-English wording, and a handful of defined terms drive nearly every coverage answer.
The two terms that control who receives coverage are "you" and "family member." Mastering these two definitions resolves a large share of structure questions before you ever reach a coverage part.
The Defined Terms That Decide Coverage
"You" means the named insured shown on the Declarations page, plus that person's spouse if the spouse is a resident of the same household. A spouse who moves out keeps "you" status for up to 90 days or until the policy ends, whichever is first.
A "family member" is a person related to the named insured by blood, marriage, or adoption who is a resident of the household, and the term expressly includes a ward or foster child. A college student living away temporarily generally remains a resident family member.
The coverage hierarchy is straightforward: the named insured has the broadest protection, family members are nearly as broad, and all other people are insured only in narrow circumstances.
The Six Parts of the PAP
The policy is split into four coverage parts and two administrative parts:
| Part | Name | Function |
|---|---|---|
| A | Liability Coverage | Pays third parties for bodily injury and property damage the insured is legally liable for (third-party) |
| B | Medical Payments | Pays reasonable medical and funeral expenses for the insured and passengers regardless of fault (first-party) |
| C | Uninsured Motorists | Pays the insured's injuries when an at-fault driver has no or too little insurance (first-party) |
| D | Coverage for Damage to Your Auto | Collision and Other Than Collision for the insured's own vehicle (first-party) |
| E | Duties After an Accident or Loss | The insured's obligations: prompt notice, cooperation, proof of loss |
| F | General Provisions | Policy-wide rules: coverage territory, termination, legal action, our right to recover |
A useful memory aid for the coverage parts is "Liability, Medical, Uninsured, Physical damage." Parts E and F are the housekeeping rules that apply across all coverages.
Who Is an Insured Depends on the Vehicle
Whether a person is an insured under Part A Liability turns on which vehicle is being driven:
| Driver | Your covered auto | Any non-owned auto |
|---|---|---|
| Named insured ("you") | Insured | Insured |
| Resident spouse | Insured | Insured |
| Resident family member | Insured | Insured |
| Permissive user (friend) | Insured | Not insured |
Key trap: A permissive user is an insured only while in your covered auto. The named insured and family members keep coverage even when driving someone else's car; an outside borrower does not. Identify the driver's status and the vehicle before selecting any coverage part.
What Counts as "Your Covered Auto"
The definition of "your covered auto" has four buckets:
- Any vehicle shown in the Declarations.
- A newly acquired auto (additional or replacement).
- Any trailer the named insured owns.
- A temporary substitute vehicle used while a covered auto is out of normal use for breakdown, repair, servicing, loss, or destruction.
Eligible vehicles are private passenger autos and pickups or vans with a Gross Vehicle Weight Rating (GVWR) of 10,000 pounds or less that are not used to deliver or transport goods or materials for a fee. Motorcycles, mopeds, and vehicles with fewer than four wheels are not eligible for the standard PAP and need a separate policy or endorsement.
Newly Acquired Auto - the Reporting Rule
A newly acquired auto receives automatic coverage, but the reporting windows are frequent exam targets:
| Situation | Liability / Medical / UM | Physical Damage (Collision & OTC) |
|---|---|---|
| Policy already insures at least one auto | Automatic; report within 14 days | Same as broadest existing coverage; report within 14 days |
| Policy has no auto carrying physical damage | Automatic | Automatic, but the insured must ask the insurer within 4 days |
Correction to a common error: the window is 14 days (or 4 days for physical damage when no existing vehicle carries it). It is not a 30-day window. A temporary substitute vehicle, by contrast, inherits the same coverage the disabled covered auto carried, with no separate reporting requirement.
The Declarations always control whether a coverage was actually purchased: an insured with no Part D shown has no Collision or Other Than Collision protection, regardless of how a loss occurred.
Under the PAP, how long does an insured have to report a newly acquired vehicle when the policy already insures another auto?
A neighbor borrows the named insured's covered auto with permission, then later drives the neighbor's own car. When is the neighbor an insured under the named insured's PAP Part A?
Eligible Vehicles and the Definition of 'Covered Auto'
Eligibility is a frequent first question on the Personal Auto Policy. The PAP is designed for individuals and married couples who own private passenger autos, pickups, and vans under a stated weight, used for personal (non-commercial) purposes.
| Covered-auto category | Status |
|---|---|
| Any vehicle shown on the Declarations | Covered |
| Newly acquired auto | Auto-covered for a grace period (commonly 14 days for added vehicles) |
| Trailer owned by the insured | Covered for liability |
| Temporary substitute auto (yours is in the shop) | Covered while your auto is out of service |
Worked eligibility point: a vehicle with a gross weight over the stated limit (heavy pickups used in business) or one titled to a corporation is generally ineligible for the PAP and must be insured under a Business Auto policy.
Exam Trap: A newly acquired vehicle that replaces an existing covered auto carries the same coverage automatically, but an additional vehicle must be reported within the grace period (commonly 14 days) to keep broad coverage - and to get physical-damage coverage, the insured must specifically ask for it within that window.