3.2 Personal Auto Policy (PAP) Coverage
Key Takeaways
- The PAP has six coverage parts: Liability, Medical Payments, Uninsured Motorist, Physical Damage (Collision/Comprehensive), and Duties After Accident
- Part A Liability covers bodily injury and property damage the insured causes to others
- Part C Uninsured Motorist covers injuries caused by uninsured, underinsured, or hit-and-run drivers
- Part D Physical Damage includes Collision (any collision) and Comprehensive (other than collision)
- Tennessee PAPs must comply with state minimum limits and UM/UIM offer requirements
The Personal Auto Policy is the standard policy form for private passenger vehicles in Tennessee.
PAP Structure
The PAP consists of six coverage parts:
Coverage Parts Overview
| Part | Coverage Type | Description |
|---|---|---|
| Part A | Liability | BI and PD liability to others |
| Part B | Medical Payments | Medical expenses regardless of fault |
| Part C | Uninsured Motorist | UM and UIM coverage |
| Part D | Physical Damage | Collision and comprehensive |
| Part E | Duties After Accident | Insured's responsibilities |
| Part F | General Provisions | Policy conditions |
Part A - Liability Coverage
Liability coverage pays for bodily injury and property damage the insured causes to others:
What's Covered
- Bodily injury to others
- Property damage to others' property
- Defense costs (in addition to limits)
- Supplementary payments (bail bonds, loss of earnings)
Who is Covered
| Insured | Coverage |
|---|---|
| Named insured | Any vehicle |
| Spouse | Any vehicle |
| Family members | Covered vehicles |
| Permissive users | Covered vehicles |
Split Limits vs. Combined Single Limit
Split Limits (Tennessee minimum: 25/50/15):
- Separate limits for BI per person, BI per accident, PD
Combined Single Limit (CSL):
- Single limit for all liability in one accident
- Example: $100,000 CSL
Part B - Medical Payments Coverage
Medical payments coverage pays for medical expenses regardless of fault:
Coverage Details
| Feature | Description |
|---|---|
| Coverage | Medical and funeral expenses |
| Fault | Regardless of who is at fault |
| Limits | Per person limit |
| Time Limit | Expenses within 3 years of accident |
Who is Covered
- Named insured and family members in any auto
- Anyone in the covered auto with permission
Part C - Uninsured/Underinsured Motorist Coverage
UM/UIM coverage protects you when at-fault driver has no or insufficient insurance:
Uninsured Motorist (UM)
Covers accidents with:
- Drivers with no insurance
- Hit-and-run drivers (phantom vehicles)
- Drivers whose insurer is insolvent
- Stolen vehicles
Underinsured Motorist (UIM)
Covers the difference when:
- At-fault driver's limits are less than your damages
- Subject to your policy's UIM limits
- May require exhausting at-fault driver's limits first
Exam Tip: Tennessee requires insurers to offer UM/UIM coverage equal to liability limits. The insured must reject in writing to decline coverage.
Part D - Physical Damage Coverage
Physical damage coverage protects your vehicle:
Collision Coverage
| Feature | Description |
|---|---|
| Definition | Damage from collision with another object |
| Deductible | Typically $250-$1,000 |
| Examples | Car-to-car collision, hitting a guardrail, rollover |
| Recovery | Insurer may subrogate against at-fault party |
Comprehensive Coverage (Other Than Collision)
| Feature | Description |
|---|---|
| Definition | Damage from perils other than collision |
| Deductible | Typically $100-$500 |
| Covered Perils | Theft, vandalism, fire, flood, hail, windstorm, animals, falling objects, glass breakage |
Loss Settlement
Actual Cash Value (ACV) is paid:
- Replacement cost minus depreciation
- Market value of comparable vehicle
- Can be increased with endorsements
Part E - Duties After an Accident
Insured must:
- Notify insurer promptly
- Cooperate with investigation
- Submit proof of loss when requested
- Authorize medical records release
- Submit to examination under oath if requested
- Not admit liability or settle claims without insurer consent
Which part of the Personal Auto Policy covers damage to your own vehicle from hitting a guardrail?
A hit-and-run driver injures a Tennessee policyholder. Which coverage would pay for the policyholder's injuries?
Comprehensive coverage on a PAP would cover damage from which of the following?