7.2 Exclusions and Part E Duties After an Accident

Part D Exclusions

Part D contains its own set of exclusions that narrow physical damage coverage. Knowing the named exclusions cold is essential — exam questions usually present a loss scenario and ask whether Part D responds.

• Public or livery conveyance — using the auto to carry persons or property for a fee (taxi, ride-share without endorsement). Share-the-expense car pools are not excluded.
• Wear and tear, freezing, mechanical/electrical breakdown, road damage to tires — unless the damage results from a covered theft.
• Radioactive contamination, war, nuclear hazard.
• Electronic equipment designed to reproduce sound, and accessories, unless permanently installed (e.g., aftermarket stereos, radar detectors, tapes/CDs) — sublimited or excluded.
• Custom furnishings/equipment in a pickup or van (paint, murals, height-extending roofs) unless specifically covered.
• Government destruction or confiscation; vehicles in the auto business; certain non-owned/rented trailers and large trucks.

Sublimits and the Electronic-Equipment Trap

Non-permanently-installed electronic equipment and media (sound-reproducing devices, navigation units that detach, CDs) are excluded or capped. ISO offers an endorsement raising coverage; absent it, a $3,000 stolen aftermarket sound system is not paid even though the car carried OTC.

Trap: Personal property inside the auto — laptops, golf clubs, luggage — is never covered by the PAP. It belongs to the homeowners/renters policy under off-premises personal property. Candidates routinely (and wrongly) assume comprehensive covers stolen belongings.

Part E - Duties After an Accident or Loss

Part E is a condition, not a coverage. It lists the actions the insured must take after a loss; failure to comply can bar a claim if the insurer is prejudiced. The general duties apply to every part of the policy:

1. Prompt notice to the insurer of how, when, and where the accident or loss happened, plus names and addresses of injured persons and witnesses.
2. Cooperate with the insurer in the investigation, settlement, or defense.
3. Forward promptly any legal papers (summons, complaint) received.
4. Submit, as often as reasonably required, to physical exams and examinations under oath (EUO).
5. Authorize the insurer to obtain medical and other records.

Additional Duties for Specific Coverages

Beyond the general duties, certain coverages add their own conditions:

Trap: Under Part D the insured must report a theft to the police — failing to do so is a frequent ground for denial. There is no police-report requirement for an ordinary collision under Part D, only for theft and for UM hit-and-run.

Part D Physical Damage Exclusions

Several exclusions narrow Part D and are commonly tested:

Part E - Duties After an Accident or Loss

Part E lists the insured's duties, and failure to comply can jeopardize the claim:

1. Prompt notice to the insurer - how, when, and where the accident happened, plus names of injured and witnesses.
2. Cooperate with the insurer's investigation, settlement, and defense.
3. Forward all legal papers (summons, complaint) received.
4. Submit to physical exams and examination under oath at the insurer's request; authorize medical/other records.
5. Notify police promptly if the auto is stolen (and for hit-and-run UM claims).
6. Permit inspection/appraisal of the damaged auto before repair.

Worked Example

An insured's car is stolen but the insured waits three weeks to report it, never notifying police, and meanwhile repairs were attempted that destroyed evidence. Because Part E requires prompt notice, police notification for theft, and allowing inspection before repair, the delayed, unverified claim can be denied or reduced for prejudice to the insurer. The exam frequently couples a coverage-eligible loss with a duties-after-loss violation to show that procedural compliance is as important as the underlying coverage grant.

Coordination and Subrogation After a Physical-Damage Loss

After paying a physical-damage claim caused by another driver, the insurer subrogates against the at-fault party and may recover the insured's deductible on their behalf (returned to the insured if fully recovered). The insured must not impair this right - signing a release with the other driver can waive the insurer's recovery and jeopardize the claim. Part E also requires the insured to submit to examination under oath and authorize the insurer to obtain medical and other records relevant to the claim.

A further tested duty: the insured must not abandon the damaged vehicle and must take reasonable steps to protect it from further loss after an accident, with the insurer reimbursing reasonable protection expenses. Failing any Part E duty that prejudices the insurer can reduce or void the recovery.