Personal Automobile Policy
Who Is Insured
Other Drivers and Interests – The personal automobile policy
covers accidents as a result of the operating of an insured
vehicle by the named insured, resident spouse and family
members, or any person who is reasonably entitled to use
the vehicle. The 06 98 edition of the Personal Auto Policy
was rewritten so any family member of an insured who uses
the insured vehicle is assumed to have the insured’s
permission. This latest edition also extends the coverage for
an insured’s spouse. In the event that a named insured and
his spouse becomes legally separated, the spouse leaving
the household will remain covered for 90 days or until
coverage is provided by a new policy, whichever occurs first.
The PAP also provides coverage to any person or
organization legally responsible for the use of the insured
vehicle. For example, if an insured injures someone while
driving his automobile in the course of his work, the injured
party may sue the insured and his employer. Subject to the
policy limits, the policy will cover the insured as well as the
employer to the extent that each is held liable for the
accident. It should be noted that coverage is not really
provided for the employer, but rather for the named insured's
legal liability which arises out of a "use" of the insured
automobile. Depending upon the loss circumstances, after
paying a claim, the insurance company may be in a position
to seek reimbursement from the employer.
The PAP excludes coverage for a person or organization,
including its agents or employees (for example, an insured’s
full-time gardener), who runs or operates an automobile
repair shop, public garage, sales agency, service station or
public parking place. An exception is made for any resident
of the named insured's household, or a partnership that
includes the named insured or any member of his household
or for any partner, agent or employee of such resident or
partnership while using a covered vehicle.
Bankruptcy - Bankruptcy or insolvency of the insured does
not release the insurer from its responsibilities.
Legal Representatives - If the named insured dies during the
policy period, the insured’s legal representatives and
spouse, if a resident of the deceased’s household at the
time of death, will be covered under the policy. Such legal
representatives are covered as named insureds in the
policy. Furthermore, any person who has temporary
custody of the car is covered as an insured until the legal
representative is appointed. Note that such representatives
are covered under the medical payments section only while
actually using the cars.
Example: Karen passed away and her executor delivers her
vehicle to her niece per her will. The estate executor gets into an
accident and hits another vehicle. Karen’s policy will cover the
loss since the executor was serving Karen’s estate according to
her will. However, if the executor was using Karen’s car to do
personal errands and had an accident, the loss would not be
covered.
Where Covered
The Personal Automobile policy form is applicable only to
accidents that take place within the U. S., its territories and
possessions and Canada, or while the insured vehicle is
being transported between ports of these territories. The
PAP form is generally interpreted as including Puerto Rico.
For an additional premium, personal auto policy can be
endorsed to extend coverages if an insured plans to use his
car outside these geographic limits. However, note that
such insurance may not be sufficient to comply with the
insurance requirements of the foreign territory.
Who Is Insured
Other Drivers and Interests – The personal automobile policy
covers accidents as a result of the operating of an insured
vehicle by the named insured, resident spouse and family
members, or any person who is reasonably entitled to use
the vehicle. The 06 98 edition of the Personal Auto Policy
was rewritten so any family member of an insured who uses
the insured vehicle is assumed to have the insured’s
permission. This latest edition also extends the coverage for
an insured’s spouse. In the event that a named insured and
his spouse becomes legally separated, the spouse leaving
the household will remain covered for 90 days or until
coverage is provided by a new policy, whichever occurs first.
The PAP also provides coverage to any person or
organization legally responsible for the use of the insured
vehicle. For example, if an insured injures someone while
driving his automobile in the course of his work, the injured
party may sue the insured and his employer. Subject to the
policy limits, the policy will cover the insured as well as the
employer to the extent that each is held liable for the
accident. It should be noted that coverage is not really
provided for the employer, but rather for the named insured's
legal liability which arises out of a "use" of the insured
automobile. Depending upon the loss circumstances, after
paying a claim, the insurance company may be in a position
to seek reimbursement from the employer.
The PAP excludes coverage for a person or organization,
including its agents or employees (for example, an insured’s
full-time gardener), who runs or operates an automobile
repair shop, public garage, sales agency, service station or
public parking place. An exception is made for any resident
of the named insured's household, or a partnership that
includes the named insured or any member of his household
or for any partner, agent or employee of such resident or
partnership while using a covered vehicle.
Bankruptcy - Bankruptcy or insolvency of the insured does
not release the insurer from its responsibilities.
Legal Representatives - If the named insured dies during the
policy period, the insured’s legal representatives and
spouse, if a resident of the deceased’s household at the
time of death, will be covered under the policy. Such legal
representatives are covered as named insureds in the
policy. Furthermore, any person who has temporary
custody of the car is covered as an insured until the legal
representative is appointed. Note that such representatives
are covered under the medical payments section only while
actually using the cars.
Example: Karen passed away and her executor delivers her
vehicle to her niece per her will. The estate executor gets into an
accident and hits another vehicle. Karen’s policy will cover the
loss since the executor was serving Karen’s estate according to
her will. However, if the executor was using Karen’s car to do
personal errands and had an accident, the loss would not be
covered.
Where Covered
The Personal Automobile policy form is applicable only to
accidents that take place within the U. S., its territories and
possessions and Canada, or while the insured vehicle is
being transported between ports of these territories. The
PAP form is generally interpreted as including Puerto Rico.
For an additional premium, personal auto policy can be
endorsed to extend coverages if an insured plans to use his
car outside these geographic limits. However, note that
such insurance may not be sufficient to comply with the
insurance requirements of the foreign territory.
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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.