Property Coverages of the Personal Auto Policy
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PAP Physical Damage Coverage-Part D
The personal auto policy’s physical damage coverage insures for damage or theft to the named insured’s auto caused by collision and other perils.
Part D-Insuring Agreement
The insurer agrees to pay for direct and accidental losses to the named insured’s covered auto or any nonowned automobile, as defined in Part D of the policy, including its equipment. The deductibles specified in the declarations are applied to any loss.
Part D-Collision Coverage
Collision is the upset of the named insured’s covered auto or its impact with another vehicle or object, such as a bridge or fence. Many courts interpret this coverage broadly to include hitting an object in the middle of the road or driving into a large pothole causing damage to the underside of the car.
Part D-Other-than-Collision Coverage
- Other-than-collision coverage provides a form of open perils protection for damage to a covered auto from perils other than collision.
- Covered perils include: missiles or falling objects; fire; theft or larceny; explosion or earthquake; windstorm; hail, water, or flood; malicious mischief or vandalism; riot or civil commotion; contact with bird or animal; and glass breakage.
Part D-Nonowned Autos
- includes borrowed, rented, or temporary substitute autos or trailers.
- Coverage is in excess to any primary insurance or recovery.
- There is a $1,500 limit for nonowned trailers.
- If a physical damage loss occurs to a "nonowned auto," the insurer will provide the broadest physical damage coverage applicable to any of the named insured's covered autos shown on the declarations page.
Part D-Transportation Expenses
In the event of a loss to the named insured’s covered auto, this coverage applies for temporary transportation expenses. This provision stipulates that if an “other-than-collision” or collision peril causes the loss, transportation expenses are provided if this coverage is listed in the declarations. The transportation expenses cover up to $20 per day with a maximum of $600, but higher limits can be provided through an endorsement.
Part D-Limit of Liability
- The loss payment will be the lesser of these two amounts
- the actual cash value of the stolen or damaged property;
- or the amount required to repair or replace the damaged property with other property of like kind and quality.
No deductible applies to the PAP’s liability, medical payments, or uninsured motorists coverage. Any deductible that applies to auto physical damage coverage is shown in the policy declarations. The other-than-collision coverage often has a lower deductible than the collision coverage. That’s why it can be important to determine whether a given loss, such as collision with a deer, fits under the other-than-collision category.
Towing and Labor Costs Coverage (PP 03 03) Endorsement
pays up to the amount specified in its schedule for towing and labor at the place of disablement for a covered auto and the broadest amount applicable for a nonowned auto.
Joint Ownership Coverage (PP 03 34) Endorsement
- This endorsement permits coverage for joint owners in nontraditional households or nonresident relatives.
- The ISO Personal Vehicle Manual stipulates that coverage is available under this endorsement for vehicles jointly owned by two or more (1) resident relatives other than husband and wife, (2) resident individuals, or (3) nonresident relatives, including a nonresident husband and wife. The endorsement defines “nonresident relatives” as meaning “two or more persons related by blood, marriage, or adoption who reside in separate households.” This includes a ward or foster child.
Misc. Type Vehicle (PP 03 23) Endorsement
broadens the definition of covered autos to include motor homes, ATVs, dune buggies, or golf carts. There is also an option to exclude or cover the passenger hazard.
Extended Non-Owned Coverage (PP 03 06) Endorsement
This endorsement is often used for an insured who is provided with a company car. It expands liability and medical payments coverage for exposures arising out of the use of vehicles furnished or available for regular use of the named individual by deleting certain exclusions and stipulating the specific coverage being bought back. Coverage applies on an excess basis.
Personal Injury Protection (PIP) Endorsement
- for no-fault states
- provides first-party benefits for medical expenses, loss of income, funeral expenses, and similar expenses without regard to fault.
Limited Mexico Coverage (PP 03 21) Endorsement
- The accident has to occur within 25 miles of the U.S. border.
- The trip into Mexico is limited to 10 days.
- No physical damage coverage is provided for repairs made in Mexico, unless the covered auto cannot be driven in its damaged condition. If it cannot be driven, the insurer will not pay more than the actual cash value of the auto as that value would be determined in the United States.
- The insurer’s duty to defend applies only if the original suit for damages is brought in the United States and the suit does not involve a Mexican citizen or resident.
- Coverage exists only if there is primary Mexican insurance. As a result, this endorsement provides only excess coverage over the Mexico primary policy.
Named Driver Exclusion Endorsement
A named driver exclusion is a provision through which an insurer and the named insured agree that coverage under the policy will not be provided while the insured vehicle is being operated by a specifically named person.
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