6.1 Personal Auto Policy Structure and Eligibility

The PAP Contract and Its Parts

The Personal Auto Policy (PAP), issued on Insurance Services Office (ISO) form PP 00 01, is the most heavily tested casualty contract on the property and casualty exam. It is a package policy: a single document that bundles several coverages an individual driver needs. Memorizing its skeleton lets you place any tested provision quickly.

The contract opens with the Declarations page (the personalized data page) and a Definitions section, then proceeds through six lettered parts.

The Six Parts

A strong exam trap: only Parts A, B, and C are first- and third-party injury/liability coverages. Part D is the only physical-damage section.

Who Is the Named Insured

The named insured is the person listed on the Declarations and, if a resident of the same household, that person's spouse. If the spouse moves out, coverage continues for that spouse for up to 90 days or until other coverage applies or the policy period ends, whichever comes first.

The broader insured definition for Part A adds family members (persons related by blood, marriage, or adoption who are residents of your household, including wards and foster children) and anyone using your covered auto with permission.

Eligibility and Covered Autos

To qualify for the PAP, the vehicle must be a four-wheeled private passenger auto, or a pickup or van rated at 10,000 pounds Gross Vehicle Weight Rating (GVWR) or less, owned by an individual or by a married couple. Vehicles leased under a written contract of at least six continuous months also qualify and are treated as owned.

Vehicles used as a public livery (taxi, ride-hail for hire) or for delivery of goods are generally excluded, with a narrow exception for share-the-expense car pools.

Your Covered Auto

The term your covered auto includes four categories:

• Any vehicle shown on the Declarations.
• A newly acquired auto (additional or replacement) for a limited window.
• Any trailer you own.
• A temporary substitute auto used because your covered auto is out of service for breakdown, repair, servicing, loss, or destruction.

For a newly acquired auto, broad liability/medical/UM coverage applies automatically, but the insured must ask the insurer to add a replacement vehicle within 14 days to keep physical-damage coverage, or within 4 days for an additional auto when no physical-damage coverage exists on any current vehicle. Editions vary; learn the 14-day default and that the burden is on the insured.

First-Party vs. Third-Party at a Glance

A frequent exam task is labeling each PAP part as who it protects:

Newly Acquired Autos and Temporary Substitutes

The newly acquired auto rule is heavily tested and depends on replacement vs. additional and on whether physical damage is already carried:

• A replacement vehicle inherits the coverage of the car it replaces; the insured generally must notify the insurer within 14 days to keep Part D physical damage.
• An additional vehicle gets liability/Med Pay/UM automatically, but to add physical damage the insured must request it within 4 days if no other auto carries Part D (within 14 days if at least one does).

A temporary substitute auto (a rental or loaner while the covered auto is in for repair, servicing, or because it was destroyed) is automatically treated as a covered auto for liability, Med Pay, and UM, and assumes the broadest physical-damage coverage on any owned vehicle.

Trailer coverage is automatic for liability/Med Pay/UM on owned trailers, but physical damage on a trailer must be scheduled.

Exam trap — the 90-day spouse rule: when a spouse who is a named insured moves out, coverage continues for that spouse for up to 90 days or until other insurance applies, whichever is first. Livery/ride-share use voids coverage absent a special endorsement, while an ordinary share-the-expense car pool remains covered — the difference between for-hire and cost-sharing is the tested line.

Eligibility Edge Cases and the Permission Chain

Two eligibility edge cases recur on the exam. First, a vehicle is eligible if leased under a written contract of at least six continuous months, in which case it is treated as owned even though title rests with the lessor. Second, a vehicle with a Gross Vehicle Weight Rating over 10,000 pounds used in business does not qualify for the PAP and must go on a commercial (Business Auto) policy.

The permission chain under the insured definition is also tested: coverage extends to a permissive user of your covered auto, and then to anyone legally responsible for that permissive user's acts. But a user without a reasonable belief of permission (a car thief, or someone exceeding the scope of permission) is not an insured.

Worked trap: the named insured lends the family car to a neighbor for an errand; the neighbor lets their teenager drive it to a party without the owner's knowledge. The neighbor is a permissive user (insured); whether the teenager is covered turns on whether the teenager had a reasonable belief they were entitled to use it — a frequent fact-pattern question. Knowing the six-month lease, 10,000-lb GVWR, 90-day moved-out-spouse, and 14-day newly acquired thresholds, plus the permission chain, reliably clears the structure-and-eligibility questions.