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7.0 Personal Auto Policy

Learning Objectives​

Upon completing this chapter, you should be able to:

  1. Define key terms used in the Personal Auto Policy.
  2. Identify who qualifies as an insured under each part of the Personal Auto Policy, as well as who is excluded from insured status.
  3. Explain the coverages and exclusions provided under Part A – Liability Coverage and Part B – Medical Payments Coverage.
  4. Describe the protection provided by Part C – Uninsured Motorists Coverage.
  5. Identify the coverages and exclusions under Part D – Coverage for Damage to Your Auto.
  6. Recognize the insured's duties under Part E – Duties After an Accident or Loss.
  7. Explain the policy conditions found in Part F – General Provisions.
  8. Identify selected endorsements that may modify or expand coverage under the Personal Auto Policy.

Overview​

Like the Homeowners policy, the Personal Auto Policy (PAP) is a personal lines package policy. It is designed to provide several types of casualty coverage, along with physical damage coverage, for an individual's or family's personal use of covered motor vehicles.

The PAP is intended for personal, non-business auto exposures. It may provide protection when an insured is legally responsible for an auto accident, when an insured or passenger is injured, when an uninsured or underinsured driver causes injury, or when a covered auto is damaged.

Because automobile insurance is required in most states, many provisions of the PAP are affected by state law. Required minimum limits of insurance, cancellation rules, nonrenewal rules, and other policy provisions may vary depending on the state's financial responsibility laws and insurance regulations.

This chapter explains the coverages, exclusions, conditions, and general provisions found in the standard Personal Auto Policy. It also introduces common endorsements that may be added to modify or expand coverage.

An Insurance Story

Sofia and Liam learned that their Homeowners policy does not provide coverage for motor vehicle liability. This is because auto-related liability is intended to be insured under a Personal Auto Policy, not a Homeowners policy. This distinction is important because automobile accidents are common and can result in serious injuries, property damage, lawsuits, and costly vehicle repairs. If Sofia or Liam causes an accident, they may be legally responsible for the injuries or damages that result. Their Personal Auto Policy helps provide a financial safety net. It may protect them if they are at fault in an accident, help pay certain medical expenses if they are injured, and provide coverage when their covered autos are damaged by a covered loss.