.0 Personal Auto Policy
Learning Objectives
.1 Eligibility
The Personal Auto Policy is designed to insure vehicles owned by one or more individuals and used primarily for personal, non-business purposes. Eligible vehicles generally include private passenger autos, such as cars, SUVs, and other four-wheeled passenger vehicles. Passenger vans and pickup trucks may also qualify, provided they meet the policy's gross vehicle weight requirements, which are commonly 10,000 pounds or less. To be eligible, the vehicle must generally be owned by the named insured. However, a vehicle leased to the named insured may also qualify if it has been leased for a continuous period of at least 6 months.
.2 Policy Definitions
You and Your
.3 Part A – Liability Coverage
Insuring Agreement
.4 Part B – Medical Payments Coverage
Insuring Agreement
.5 Part C – Uninsured Motorists (UM) Coverage
Insuring Agreement
.6 Part D – Coverage for Damage to Your Auto
Part D explains how the policy covers physical damage to the insured's auto. This coverage is often referred to as physical damage coverage because it applies to direct damage to the vehicle itself. Part D is a form of first-party property coverage, meaning it protects the insured's own covered auto when it is damaged by a covered cause of loss. In addition, Part D may provide limited coverage for certain non-owned vehicles while they are being used or operated by the insured or a family member.
.7 Part E – Duties After an Accident or Loss
Any insured person, or any other person seeking coverage under the policy, must comply with the policy's required duties after an accident or loss. These duties help the insurer investigate the claim, determine whether coverage applies, and evaluate the amount of loss.
.8 Part F – General Provisions
The General Provisions apply to all sections of the Personal Auto Policy. These provisions function much like a Conditions section because they explain the duties, rights, and responsibilities of both the named insured and the insurance company. A key point for learners is that the General Provisions are not limited to one specific coverage part. Instead, they apply broadly across the policy and help establish how the policy operates, how coverage is enforced, and what each party must do under the contract.
.9 Selected Endorsements
Towing and Labor Costs Coverage Endorsement
.10 Personal Injury Protection (PIP)
Some states require, or make available, Personal Injury Protection, commonly referred to as PIP coverage. PIP is also sometimes called no-fault insurance. PIP coverage pays certain expenses resulting from an auto accident, regardless of who caused the accident. Covered expenses may include medical costs and, depending on the policy and state law, other related expenses incurred by the insured or passengers occupying a covered auto. A key learning point is that PIP is designed to provide prompt payment for certain accident-related expenses without first requiring a determination of fault.
Recap of Chapter Seven
A Personal Auto Policy is a package policy that provides both liability coverage and property coverage for eligible vehicles. Eligible vehicles generally include private passenger autos, as well as pickups and vans with a gross vehicle weight of 10,000 pounds or less. The policy may also allow certain types of incidental business use. For example, coverage may still apply when the vehicle is used to deliver or transport goods and materials for farming or ranching purposes, or for a business that involves installing or repairing furnishings or equipment. A key learning point is that the Personal Auto Policy is designed primarily for personal-use vehicles, but it may allow limited business-related use when the use falls within the policy’s eligibility rules.