Chapter 11: The Personal Auto Policy PAP

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Chapter 11The Personal Auto Policy(PAP)

• ISO FORM

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Policy Layout
Part A Liability
Pays if you are sued
Part B Medical Payments
Pays you if injured
Pays if you are hit by negligent driver
Part C Uninsured Motorists
Part D Physical Damage
Pays for damage to your car
Collision
Other Than Collision
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PAP Is Different From HO Contract

• A policy owner may generally pick and choose the
  coverage wanted
• Coverage applies only if declaration page
  indicates the coverage has been purchased
• Each insuring agreement can generally stand by
  itself
• Some definitions change depending on the insuring
  agreement

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Definitions

• You named insured spouse if resident
• Family member must be a resident
• Your Covered Auto
• Shown in declarations
• Private passenger auto, small pickup, or van
• Newly acquired autos
• Trailer

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Part A -- Liability

• Pays legal judgments on your behalf resulting
  from an auto accident
• Includes owned and non-owned vehicles
• Coverage on the car is primary
• Single versus split-limits
• Any person using your covered auto
• Any organization whose liability arises from your
  negligence while using auto

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Part A -- Exclusions

• Intentional injury
• Damage to own property
• Damage caused while using your car as a taxi or
  delivery vehicle
• Using vehicles without belief you had permission
• Damage caused if driver is using the care while
  in the automobile business

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Part A -- Exclusions

• Damage caused while using a motorcycle (less than
  4 wheels)
• Other owned vehicles not listed in Declarations

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Part B -- Medical Payments

• Caused by an accident sustained by an insured
• Additionally you are covered if struck as a
  pedestrian
• Includes occupants of car, but not people you hit
• Exclusions are similar to Part A

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Part C -- Uninsured Motorists

• Pays damages insured is legally entitled to
  recover from a negligent driver
• Uninsured motor vehicle means
• No policy applies at the time of the accident
• Hit-and-Run vehicle
• Tort-feasor insured by insolvent insurer
• Exclusions similar to Part A
• Arbitration clause applies

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Part D -- Physical Damage

• Pays for direct and accidental loss to covered
  auto if premium shown on the declaration page
  showing coverage for
• Collision
• Other than collision
• Specified losses NOT collision
• Some indirect loss coverage

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Part D -- Physical Damage

• Exclusions similar to Part A, plus
• Wear and tear
• Electronic equipment
• Recovery is based on actual cash value

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Loss Settlement

• When cost of repair generally exceeds the market
  value of the auto before the loss, the vehicle is
  totaled and the insurer pays the ACV of the
  loss.
• The limit of the amount payable is the amount not
  to exceed what it would repair or replace with
  like kind and quality allowing the repair
  facility to use after-market parts that meet or
  exceed OEM standards.