Personal Auto Policy Property Coverages - FL Adjuster Claim Professional Exam

Fast Facts

Part D—Coverage for Damage to Your Auto: Pays for accidental direct losses to covered auto(s) from collision or other-than-collision perils, regardless of negligence. Excludes wear and tear, mechanical breakdown, custom furnishings, communication equipment.
Part E—Duties After an Accident or Loss: Insured must advise insurer, cooperate, notify police for hit-and-run, protect property from further harm.
Part F—General Provisions: Insurer can recover damages from third parties via subrogation. Coverage applies in U.S., its territories, and Canada, but not Mexico.

Coverage for Physical Damage

Part D provides first-party coverage for damage or theft to the named insured’s auto, known as collision and other-than-collision coverage (formerly "comprehensive").

Insuring Agreement

Insurer pays for direct, accidental losses to covered autos or nonowned autos, subject to deductibles in declarations.

Example: Kelly’s policy has a $500 collision deductible and $1,000 other-than-collision deductible. She pays $500 for a crash and $1,000 for storm damage from a fallen tree.

Collision Coverage

Covers upset of the auto or impact with another vehicle/object (e.g., hitting a pothole damaging the underside).

Other-than-Collision Coverage

Open perils protection for non-collision losses, including:

Missiles or falling objects
Fire, theft, or larceny
Explosion or earthquake
Windstorm, hail, water, or flood
Vandalism, riot, or civil commotion
Contact with bird or animal
Glass breakage

Key Point: Collision and other-than-collision coverages are typically purchased for newer vehicles or required by lienholders.

Nonowned Autos

Covers:

Vehicles not owned or regularly used by insured/family.
Temporary substitutes for unusable covered autos (e.g., breakdown, repair).

Provides broadest physical damage coverage from insured’s policy, on an excess basis.

Example: Paul’s coupe has collision and other-than-collision coverage; his truck has only other-than-collision. A rented sedan gets both coverages as a nonowned auto.

Transportation Expenses

Pays up to $20/day, max $600, for temporary transportation if covered auto is lost due to collision or other-than-collision peril (higher limits via endorsement).

Key Exclusions

Exclusion	Description
Wear and tear, freezing, mechanical breakdown, road damage	Covers accidental losses, not normal deterioration.
Electronic equipment (audio, visual, data)	Excludes CB radios, phones, TVs, etc., unless permanently installed.
Governmental confiscation	No coverage for total loss by authorities.
Unlisted trailers, camper bodies, motor homes	Only nonowned trailers covered.
Custom furnishings/equipment	Excludes special carpeting, murals, etc.

Limit of Liability

Pays lesser of actual cash value or repair/replacement cost. Nonowned trailer limit: $1,500; after-market equipment: $1,000.

Deductibles

No deductibles for liability, medical payments, or uninsured motorists. Physical damage deductibles in declarations; other-than-collision often lower. Highest deductible applies if multiple covered autos collide.

Example: Christina’s sedan ($1,000 deductible) hits her coupe ($500 deductible). Only $1,000 deductible applies.

Conditions and Selected Endorsements

Duties After an Accident or Loss

Advise insurer of loss details.
Cooperate with insurer.
Notify police for hit-and-run.
Protect property from further harm.

General Provisions

Subrogation: Insurer recovers damages from third parties.
Policy Territory: U.S., territories, Canada (not Mexico).
Termination: Via cancellation, nonrenewal, or other means.

Key Endorsements

Towing and Labor Costs (PP 03 03): Pays up to specified limit for towing/labor at disablement site.
Joint Ownership (PP 03 34): Covers vehicles owned by nontraditional households or nonresident relatives.
Miscellaneous Type Vehicle (PP 03 23): Covers motor homes, ATVs, golf carts; excludes passenger hazard if specified.
Extended Non-Owned Coverage (PP 03 06): Covers company cars for liability/medical payments, excess to other insurance.
Personal Injury Protection (PIP): Adds no-fault coverage per state requirements.
Limited Mexico Coverage (PP 03 21): Excess coverage within 25 miles of U.S. border for 10-day trips, requires Mexican insurance.
Named Driver Exclusion: Excludes coverage for specific drivers.
Federal Employee Non-Owner (PP 03 01): Excludes U.S. government from liability coverage for federal employees.

Test Your Knowledge

Dolores strikes a pothole, damaging her car’s suspension. Her PAP has collision and other-than-collision coverage. Will her policy cover the damaged suspension?

Yes No

Test Your Knowledge

What explanation should you give to a PAP policyowner who recently moved to a new state and wants to know why a PIP endorsement was added?

The PIP endorsement was added because your new state requires no-fault insurance to cover medical expenses and other losses, regardless of fault. The PIP endorsement was added as an optional coverage to enhance your liability protection.

For Your Review

PAP physical damage covers collision and other-than-collision losses to the insured’s auto.
Collision: Upset or impact with vehicle/object.
Other-than-collision: Open perils (e.g., theft, vandalism, hail).
Nonowned autos get broadest coverage, excess basis.
Pays lesser of actual cash value or repair cost.
No deductibles for liability, medical payments, uninsured motorists; physical damage deductibles in declarations.