Personal Automobile Policy
Liability Coverages
An individual, firm or corporation owning or operating a motor vehicle
has the duty to use such vehicles in a manner to avoid injuring other
people or damaging other’s properties. This duty includes assuming
responsibilities for accidents caused by people, other than the owners
of the vehicles, driving the vehicles. This concept is referred to as
vicarious liability.
All personal and business liability policies specifically exclude the
coverage for accidents involving automobiles, including when being
loaded or unloaded. Insurance for this form of liability is provided in the
Automobile Liability policy. (In rare cases, this insurance is endorsed to
be included in other liability policies, but the coverage is the same when
provided by a separate policy.) Automobile liability policies are mostly
written in standardized form, and few significant differences exist
among the various insurers. Automobile insurance is generally written
as the Personal Automobile policy or the Commercial Automobile policy.
The handful of states that have not adopted these forms automobile
insurance policies are written under the Family, Basic, or Comprehensive
Automobile policies.
In some states certain vehicles, e.g., cars having fewer than four
wheels, private passenger cars owned by partnerships and
corporations, and vehicles insured under an Assigned Risk Plan, are
written under the Basic Automobile policy.
Personal Automobile Policy
Eligibility - The Personal Automobile policy (PAP) protects four-wheeled
private passenger vehicles, including jeeps and SUV. Pick-up trucks and
vans whose gross weight is less than 10,000 pounds are also eligible
under the PAP as long as they are not hired out for transporting goods or
materials. The policy also covers trailers. Eligible vehicles (including
trailers) may be owned or non-owned. Vehicles used under a long term
lease are considered to be owned. Classes of eligible non-owned
vehicles include rentals or temporary substitutes for any covered auto
that is out of use because it is being repaired, or has been stolen or
destroyed. Although the PAP generally excludes coverage for business
use, exceptions are made for automobiles used in farm or ranch
operations. This exception exists because farm and ranch vehicles
have less liability exposures since they are often isolated from use in
street traffic.
There are other situations which are eligible for Personal Auto policy. A
private passenger automobile owned by a business operated by an
individual is acceptable. A vehicle used by a federal employee on
government business is also provided coverage under the Personal Auto
policy. Generally a vehicle must be owned by an individual, a husband
and wife, relatives, or non-related persons who reside in the same
household. Vehicles owned by companies, corporations or
partnerships, trucks or vans weighing over 10,000 pounds G.V.W.,
public vehicles, etc., are unacceptable for coverage under PAP and
therefore must be insured under other forms of automobile liability.
Motorcycles, Golf Carts, Snowmobiles, Etc. - The Personal Automobile
policy can be endorsed to cover motorcycles, scooters, motor homes,
snowmobiles, golf carts and similar vehicles.
WHAT IS COVERED
The PAP is identical to other public liability forms in terms of limits of
liability. In addition to those limits, the PAP will also pay up to $250
towards the cost of bail bond which the insured may be required to
post. However, the bail bond must be a direct result of the insured's
involvement in a covered accident.
EXAMPLE: An insured is arrested by the police for racing on a street and
crashing into several parked cars. The insured is then released after
posting bail. Even though the insured is covered under a PAP, he will not
be covered for the cost of the bond, because accidents resulting from
racing are excluded from coverage under the PAP.
In the event of an eligible loss, the Personal Auto Policy also reimburses
the insured for loss of earnings due to the insured attending hearings
and trials. The maximum coverage for such is $250 per day.
The PAP may provide coverage for medical expenses incurred by
certain individuals in an accident, regardless of whether the insured is
found liable for the particular accident. The Medical Payments coverage
in PAP is specifically designed for this form of insurance and
significantly differs from the Medical Payments coverage found under
Public Liability policies.
The liability portion of the policy only provides coverage for third party
damages and does not cover damage to the insured’s automobile.
Damage to or loss of the insured’s vehicle is covered separately by
Automobile Physical Damage or Material Damage policies. Under the
Personal Automobile policy, this coverage is included in the section
named COVERAGE FOR DAMAGE TO YOUR AUTO.
Financial Responsibility Laws - Automobile liability policies generally
contain a provision that makes the policy conform to the state’s Motor
Vehicle Financial Responsibility Law. Under certain situations, this
provision may obligate an insurer to pay for damages for which it would
not otherwise be responsible.
Liability Coverages
An individual, firm or corporation owning or operating a motor vehicle
has the duty to use such vehicles in a manner to avoid injuring other
people or damaging other’s properties. This duty includes assuming
responsibilities for accidents caused by people, other than the owners
of the vehicles, driving the vehicles. This concept is referred to as
vicarious liability.
All personal and business liability policies specifically exclude the
coverage for accidents involving automobiles, including when being
loaded or unloaded. Insurance for this form of liability is provided in the
Automobile Liability policy. (In rare cases, this insurance is endorsed to
be included in other liability policies, but the coverage is the same when
provided by a separate policy.) Automobile liability policies are mostly
written in standardized form, and few significant differences exist
among the various insurers. Automobile insurance is generally written
as the Personal Automobile policy or the Commercial Automobile policy.
The handful of states that have not adopted these forms automobile
insurance policies are written under the Family, Basic, or Comprehensive
Automobile policies.
In some states certain vehicles, e.g., cars having fewer than four
wheels, private passenger cars owned by partnerships and
corporations, and vehicles insured under an Assigned Risk Plan, are
written under the Basic Automobile policy.
Personal Automobile Policy
Eligibility - The Personal Automobile policy (PAP) protects four-wheeled
private passenger vehicles, including jeeps and SUV. Pick-up trucks and
vans whose gross weight is less than 10,000 pounds are also eligible
under the PAP as long as they are not hired out for transporting goods or
materials. The policy also covers trailers. Eligible vehicles (including
trailers) may be owned or non-owned. Vehicles used under a long term
lease are considered to be owned. Classes of eligible non-owned
vehicles include rentals or temporary substitutes for any covered auto
that is out of use because it is being repaired, or has been stolen or
destroyed. Although the PAP generally excludes coverage for business
use, exceptions are made for automobiles used in farm or ranch
operations. This exception exists because farm and ranch vehicles
have less liability exposures since they are often isolated from use in
street traffic.
There are other situations which are eligible for Personal Auto policy. A
private passenger automobile owned by a business operated by an
individual is acceptable. A vehicle used by a federal employee on
government business is also provided coverage under the Personal Auto
policy. Generally a vehicle must be owned by an individual, a husband
and wife, relatives, or non-related persons who reside in the same
household. Vehicles owned by companies, corporations or
partnerships, trucks or vans weighing over 10,000 pounds G.V.W.,
public vehicles, etc., are unacceptable for coverage under PAP and
therefore must be insured under other forms of automobile liability.
Motorcycles, Golf Carts, Snowmobiles, Etc. - The Personal Automobile
policy can be endorsed to cover motorcycles, scooters, motor homes,
snowmobiles, golf carts and similar vehicles.
WHAT IS COVERED
The PAP is identical to other public liability forms in terms of limits of
liability. In addition to those limits, the PAP will also pay up to $250
towards the cost of bail bond which the insured may be required to
post. However, the bail bond must be a direct result of the insured's
involvement in a covered accident.
EXAMPLE: An insured is arrested by the police for racing on a street and
crashing into several parked cars. The insured is then released after
posting bail. Even though the insured is covered under a PAP, he will not
be covered for the cost of the bond, because accidents resulting from
racing are excluded from coverage under the PAP.
In the event of an eligible loss, the Personal Auto Policy also reimburses
the insured for loss of earnings due to the insured attending hearings
and trials. The maximum coverage for such is $250 per day.
The PAP may provide coverage for medical expenses incurred by
certain individuals in an accident, regardless of whether the insured is
found liable for the particular accident. The Medical Payments coverage
in PAP is specifically designed for this form of insurance and
significantly differs from the Medical Payments coverage found under
Public Liability policies.
The liability portion of the policy only provides coverage for third party
damages and does not cover damage to the insured’s automobile.
Damage to or loss of the insured’s vehicle is covered separately by
Automobile Physical Damage or Material Damage policies. Under the
Personal Automobile policy, this coverage is included in the section
named COVERAGE FOR DAMAGE TO YOUR AUTO.
Financial Responsibility Laws - Automobile liability policies generally
contain a provision that makes the policy conform to the state’s Motor
Vehicle Financial Responsibility Law. Under certain situations, this
provision may obligate an insurer to pay for damages for which it would
not otherwise be responsible.
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MY Insurance Agency
The materials on this website are meant to
be informative in nature. Due to the ever
changing and varying state laws, and the fact
some insurers offer coverage in slightly
different forms from the Insurance Services
Office (ISO) standard forms, we cannot
guarantee the accuracy of the materials on
this page.
be informative in nature. Due to the ever
changing and varying state laws, and the fact
some insurers offer coverage in slightly
different forms from the Insurance Services
Office (ISO) standard forms, we cannot
guarantee the accuracy of the materials on
this page.