Skip to main content

7.1 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.

Like other personal lines policies, the Personal Auto Policy allows certain limited or incidental business use of an eligible vehicle. For example, an insured may use the vehicle to make sales calls or travel between business appointments. Certain transportation-related business uses may also be permitted. This includes delivering or transporting goods and materials for farming or ranching. It may also include delivering or transporting goods and materials when the use is incidental to a business involving the installation, maintenance, or repair of furnishings or equipment. However, broader business use is not eligible under a Personal Auto Policy. A vehicle used to make other business deliveries, carry passengers for a fee, or engage in other commercial activities generally requires commercial auto insurance rather than Personal Auto coverage.

When underwriting and rating a Personal Auto Policy, one of the most important considerations is who will be insured under the policy. This is because the driving record and characteristics of each driver help determine whether the applicant is eligible for coverage and how the policy will be rated. Drivers with clean driving records during the insurer's review period generally qualify for more favorable rates. By contrast, drivers with limited driving experience, prior accidents, traffic violations, or other driving infractions may be placed in a higher rating category and charged a higher premium. If an applicant presents a risk that is too high for the voluntary insurance market, coverage may still be available through the state's residual market mechanism, such as an assigned risk plan or other state-supported auto insurance program.

Personal Auto Policy​

Personal Auto Policies are package policies, meaning they combine several related coverages and policy provisions into one form. The standard Personal Auto Policy is organized into six main parts:

  • Part A – Liability Coverage, which protects an insured against certain claims for bodily injury or property damage caused by an auto accident
  • Part B – Medical Payments Coverage, which pays certain medical expenses for eligible injured persons
  • Part C – Uninsured Motorists Coverage, which provides protection when an insured is injured by a driver who has no insurance or does not have enough applicable coverage
  • Part D – Coverage for Damage to Your Auto, which provides physical damage coverage for covered autos
  • Part E – Duties After an Accident or Loss, which explains what the insured must do after an accident or covered loss
  • Part F – General Provisions, which contains policy conditions and rules that apply to the Personal Auto Policy

Parts A, B, and C provide the policy's casualty insurance coverages. These parts respond to liability claims, medical expenses, and injuries involving uninsured motorists. Part D provides physical damage coverage, which is a form of property insurance. This coverage applies to damage to the insured's covered autos, subject to the terms, limits, and exclusions of the policy.