6.1 Personal Auto Policy Structure and Eligibility

The ISO Personal Auto Policy (PAP)

The Personal Auto Policy is the most heavily tested casualty contract on the national exam. Almost every state builds its auto questions around the ISO Personal Auto Policy form PP 00 01, most commonly the PP 00 01 09 18 edition. Memorize the form number and the six-part lettered structure; examiners love to ask which Part responds to a given claim.

The PAP is organized into a Declarations page plus six labeled Parts. The Parts are mutually exclusive coverages, each with its own insuring agreement, exclusions, and limit:

The six Parts of the PAP

Parts A, B, and C are the injury-and-liability core covered in this unit. Part D is physical damage; Parts E and F are conditions and provisions.

Eligibility

The PAP is a personal lines contract for individuals and families, not businesses. To be eligible, the named insured must be a natural person (or spouses residing in the same household), and the covered vehicle must be one of:

• A private passenger auto (four wheels, owned or leased under a contract of at least six continuous months)
• A pickup or van with a Gross Vehicle Weight Rating of 10,000 lbs or less, not used to deliver or transport goods for a business (incidental farming/ranching use and the named insured's own business of carrying tools/supplies is permitted)
• A trailer owned by the insured
• A newly acquired auto (subject to notice rules below)

A vehicle with a GVWR over 10,000 lbs, or one used for retail/wholesale delivery (e.g., pizza or courier delivery), is not eligible and must be written on a commercial auto or business auto policy.

Who is an insured

The definition of "insured" changes by Part, a frequent trap. Under Part A the insured includes:

1. 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)
2. Any person using your covered auto with permission
3. For your covered auto, any person or organization legally responsible for acts of a covered insured (e.g., your employer when you use the car on the job)
4. For any auto (a non-owned car), any other person or organization, but only as to legal responsibility for acts of you or a family member

A resident family member is covered even while driving a non-owned auto. A college student living away at school is generally still a resident of the household for coverage purposes.

Newly acquired autos

The PAP automatically extends coverage to a newly acquired auto, but the rules differ by type:

• Additional auto (you keep the others): coverage is automatic; you generally have 14 days to ask the insurer to add it, and broadest physical-damage terms apply during that window.
• Replacement auto (replaces a vehicle on the policy): liability and med-pay are automatic; for physical damage you must add it within 14 days if you want coverage broader than what the replaced car carried, and you must have carried physical damage on the replaced car.

The key exam number is 14 days for newly acquired autos. Do not confuse it with the 6-month leasing rule for eligibility.

One more eligibility nuance: a leased vehicle qualifies as your covered auto only when the lease runs at least six continuous months, which is why short-term rentals are handled by the temporary-substitute and non-owned-auto provisions rather than as owned autos.

Temporary substitute autos - a vehicle used while the covered auto is out of service for repair, servicing, breakdown, loss, or destruction - receive the same coverage as the covered auto they replace, but only if the substitute is not owned by the insured. These distinctions (owned vs. leased vs. temporary substitute vs. non-owned) are the backbone of many definition questions on the exam.

Defining the Covered Auto and the Eligible Vehicle

The PAP only responds for a covered auto, a defined term the exam tests against trailers and newly acquired vehicles.

Newly Acquired Autos and Reporting Windows

Whether a newly acquired vehicle is automatically covered depends on whether it is an addition to the fleet or a replacement, and on the broadest coverage already on the policy. An additional auto is usually covered automatically but must be reported within 14 days to keep coverage; a replacement of a vehicle that already carried physical damage is covered automatically, with notice within 14 days required to continue collision and other-than-collision. Missing the reporting window can leave a gap precisely when a new, higher-value car is on the road.