Personal Auto Policy (PAP) - FL Adjuster Claim Professional Exam
Introduction to the Personal Auto Policy
The Personal Auto Policy (PAP) combines property and liability insurance to protect individuals and families. It covers:
- Property: Vehicle losses from fire, collision, covered perils, and theft.
- Liability: Bodily injury or property damage caused by the owner or operator in an accident.
Policy Structure
The PAP consists of three parts:
- Declarations Page: Personalizes the policy with insured’s details, vehicle info, coverage limits, deductibles, and endorsements.
- Personal Auto Coverage Form: Details coverages (Parts A-D), duties after a loss (Part E), and general provisions (Part F).
- Endorsements: Modify, add, or delete policy provisions.
Outline of the ISO Personal Auto Policy
- Part A - Liability Coverage: Covers bodily injury and property damage, supplementary payments, exclusions, and limits.
- Part B - Medical Payments Coverage: Covers medical expenses, exclusions, and limits.
- Part C - Uninsured Motorists Coverage: Covers injuries from uninsured drivers, exclusions, and arbitration.
- Part D - Coverage for Damage to Your Auto: Covers physical damage, transportation expenses, exclusions, and appraisal.
- Part E - Duties After an Accident or Loss: Insured’s responsibilities post-loss.
- Part F - General Provisions: Includes bankruptcy, fraud, policy period, termination, and more.
Key Definitions
We, Us, Our: The insurance company providing coverage.
You, Your: The named insured and spouse residing in the same household, with equal rights and protections.
Bodily Injury: Bodily harm, sickness, disease, or death (must be physically apparent/measurable, not mental distress).
Property Damage: Physical injury, destruction, or loss of use of tangible property (actual and measurable).
Your Covered Auto: Includes:
- Vehicles listed in the declarations (owned or leased for 6+ months).
- Newly acquired autos (with notification requirements).
- Owned trailers (e.g., farm wagons or implements pulled by passenger autos, pickups, or vans).
- Temporary substitute autos (used when a listed vehicle is unavailable due to breakdown, repair, or loss).
Coverage for Your Covered Auto
Vehicles in Declarations
Vehicles owned or leased (for 6+ months) by the named insured, listed in the declarations.
Newly Acquired Autos
Autos acquired during the policy term receive:
- Broadest coverage for liability, medical payments, and uninsured motorists as provided for any declared vehicle.
- Collision Coverage:
- If the insured has collision coverage on at least one declared vehicle, coverage applies from the acquisition date.
- Replacement autos are covered automatically; additional autos require notification within 14 days.
- If no collision coverage on declared vehicles, coverage starts when requested within 4 days, with a $500 deductible.
- Other-than-Collision (Comprehensive): Coverage starts on acquisition date if the insured has it on a declared vehicle and notifies the insurer within 14 days; otherwise, within 4 days with notification.
Example: John replaces his old sedan with a new one. His PAP’s 50/100/50 liability coverage automatically applies to the new sedan without notification. If he adds a roadster, he must notify the insurer within 14 days for coverage to start from acquisition.
Owned Trailers
Trailers designed to be pulled by passenger autos, pickups, or vans, owned by the insured.
Temporary Substitute Autos
Non-owned vehicles or trailers used when a declared vehicle is unavailable due to breakdown, repair, or loss. Covered for liability, medical payments, uninsured motorists, and limited physical damage under Part D.
Example: If Jane’s car is in the shop, her PAP covers a rental car for liability and limited physical damage while it acts as a substitute.
Test Your Knowledge!
Key Review Points
- The PAP combines property and liability insurance for individuals/families.
- Includes a declarations page, coverage form (Parts A-F), and endorsements.
- Your covered auto includes declared vehicles, newly acquired autos, owned trailers, and temporary substitutes.
- Newly acquired autos require notification within 14 days for collision/comprehensive if already covered, or 4 days if not.
- Bodily injury excludes mental distress; it must be physically measurable.