7.2 Part D Exclusions and Part E - Duties After an Accident

Part D Exclusions and Part E Duties

Part D contains a tightly drafted exclusions list, and Part E imposes binding conditions the insured must satisfy to recover. Both are heavily tested because they convert an apparently covered loss into a denied claim. Memorize the categories; exam questions describe a fact pattern and ask whether coverage applies.

Key Part D Exclusions

The ISO PAP excludes physical damage in a defined set of situations. The exam expects you to recognize that these are loss causes the carrier never intended to insure - either commercial usage, ordinary maintenance, or catastrophic perils handled elsewhere. The high-frequency exclusions are summarized below.

• Public or livery conveyance - using the auto to carry persons or property for a fee (ride-share and delivery without endorsement).
• Mechanical or electrical breakdown and road damage to tires (unless caused by a covered peril such as fire or theft).
• Freezing, wear and tear, and inherent defects - maintenance items, not insurable losses.
• Radioactive contamination, war, and nuclear hazard.

The exclusion list continues with several property-specific limitations that examiners like to bury inside a fact pattern. Read each carefully because the answer often turns on whether equipment was permanently installed or whether the driver had permission.

• Loss to electronic equipment designed for sound/visual reproduction not permanently installed, and to media/tapes/discs.
• Loss to a non-owned auto used without a reasonable belief of being entitled to use it.
• Government destruction or confiscation (except for repossession by a secured party).
• Custom furnishings/equipment in a pickup or van beyond the policy limit absent a declaration.

A particularly tested item: damage occurring while the auto is used as a public or livery conveyance is excluded - rideshare and paid-delivery drivers need a specific endorsement or a commercial auto policy to restore physical damage coverage.

Part E - Duties After an Accident or Loss

Part E lists the conditions precedent to coverage under every part of the policy. Failure to comply can void the claim. The insured (and any person seeking coverage) must:

1. Promptly notify the insurer of how, when, and where the accident or loss happened, with names and addresses of injured parties and witnesses.
2. Cooperate with the insurer in the investigation, settlement, or defense of any claim or suit.
3. Promptly send copies of any notices, summonses, or legal papers received.
4. Submit to physical exams by chosen physicians and to examination under oath (EUO) as often as reasonably required.
5. Authorize release of medical and other pertinent records.
6. Submit a proof of loss when required.

Additional duties specific to a Part D physical damage loss:

• Take reasonable steps to protect the auto from further loss (the insurer will pay reasonable expenses to do so).
• Notify the police if the auto is stolen.
• Permit the insurer to inspect and appraise the damaged property before its repair or disposal.

Common Duty Traps

The takeaway: rights run both ways. The insurer must pay reasonable expenses incurred to protect the auto, but the insured forfeits coverage by destroying evidence, repairing before inspection, or failing to report theft to police.

Note the practical sequence after a physical-damage loss: report promptly, photograph and protect the vehicle, file a police report for theft or vandalism, schedule the carrier's inspection or appraisal, then authorize repairs only after the adjuster releases the estimate. An insured who reverses this order hands the carrier a clean breach-of-condition defense even on an otherwise clearly covered peril.

Finally, distinguish a covered exclusion gap from a duty breach. An exclusion (such as wear and tear) means the loss was never covered to begin with; a duty breach means a covered loss becomes unrecoverable because the insured failed a condition. Exam questions often blend the two, so identify first whether the peril is covered, then whether the insured satisfied Part E.

Physical-Damage Exclusions Worth Memorizing

Part D excludes several categories that surprise insureds. There is no coverage for loss to electronic equipment and media not permanently installed, for wear and tear, freezing, mechanical breakdown, and road damage to tires (these are maintenance, not accident), for loss to a vehicle used as a public or livery conveyance (rideshare-for-hire without an endorsement), and for damage due to war, nuclear hazard, or governmental seizure. Custom furnishings and equipment in a pickup or van beyond a small built-in limit are excluded unless described.

The livery exclusion is the modern trap: a driver carrying passengers for a ride-hailing fee without a rideshare endorsement may find both liability and physical-damage coverage denied for losses during the for-hire activity.

Part E Duties After an Accident and the Consequence of Breach

Part E lists conditions the insured must satisfy to keep coverage alive: promptly notify the insurer of how, when, and where the accident happened; cooperate in the investigation and defense; forward legal papers received; submit to physical exams and examinations under oath when reasonably required; allow inspection and appraisal of the damaged auto before repair; and, for theft, notify the police. For UM/UIM and med-pay claims, the insured must authorize release of medical records and may need to provide proof of loss.

These are conditions, so a material breach can defeat an otherwise valid claim. A worked trap: an insured repairs a damaged vehicle before the insurer inspects it, then files the claim. Because the insured failed the duty to allow inspection and appraisal before repair, the insurer can dispute or reduce the payment for inability to verify the loss. The exam reliably rewards recognizing that prompt notice, cooperation, and pre-repair inspection are enforceable duties — not optional courtesies — and that prejudicial noncompliance can forfeit coverage.