Many people own and require insurance for vehicles that are not typical private passenger automobiles, but are not commercial vehicles either. The Insurance Services Office (ISO) Personal Vehicle Manual contains rules (rule 19) and forms (PP 03 23 for most; PP 03 20 for snowmobiles) defining these vehicles for coverage purposes. Of course, while ISO sets a standard, individual insurers may deviate from it.

Motor Homes

The ISO rules manual says that a motor home is a self-propelled motor vehicle equipped with a “living area that is an integral part of the vehicle chassis.” A motor home typically has plumbing, as well as facilities for cooking, refrigeration, dining, and sleeping.

A motor home that the insured drives to work or in business is rated—for liability coverage—as a private passenger automobile. A pleasure use motor home receives a 50 percent reduction from the standard private passenger auto rates for liability, medical payments/no-fault, and uninsured/underinsured motorists coverages.

In order to rate physical damage coverage, the agent and insured must arrive at a stated amount of coverage. In order to properly rate physical damage coverage, a symbol is assigned. The ISO Symbol Manual provides a chart for converting a dollar amount to a symbol. Symbols are based on both the cost new of the vehicle and a particular car’s damageability. Again, any motor home that the insured drives to work or in business is rated like a private passenger auto. For a pleasure use motor home, the physical damage rate is 35 percent that of a private passenger auto.

When a motor home is insured under a personal auto policy, both the Miscellaneous Vehicle Type Endorsement PP 03 23 and the Miscellaneous Type Vehicle Amendment (Motor Homes) (PP 03 28) are normally used. The amendment excludes coverage when the motor home is rented to others unless an additional premium is shown in the endorsement for coverages that apply during a rental. If the annual rental period is four weeks or less, the premium is increased by 50 percent; for more than four weeks, the increase is 100 percent.

Trailers and Camper Bodies

A recreational trailer, as referred to in the ISO manual, like a motor home, is equipped with living quarters. A camper body, which also has living quarters, is a unit transported by a pickup. In contrast to motor homes, these are not self-propelled vehicles.

Any personal auto policy that affords liability coverage provides the same coverage for trailers designed for use with a private passenger auto, pickup, or van. There is no additional premium for this coverage and no description of the trailer is necessary.

Physical damage coverage for a travel trailer or a camper body must be purchased. To be eligible, the insured must maintain a “permanent residence other than the recreational trailer.” Comprehensive and collision rates are the same for recreational trailers and camper bodies as for motor homes.

Physical damage coverage may also be provided under this form for boat trailers, utility trailers, horse trailers, and other trailers that do not contain living quarters, using rates shown in the rating manual.

Motorcycles and Other Similar Vehicles Not Used for Business Purposes

The rating for liability coverage for these vehicles is based on the size of the engine and the age of the operators. If the insured chooses the passenger hazard exclusion (eliminating liability coverage for injuries to passengers), the split limit rate is reduced by 40 percent and the single limit rate by 20 percent. Uninsured motorists coverage is 200 percent of the applicable private passenger rate.

Physical damage rates are based on the symbol 2 (for the model years 1990 and later) or symbol 7 (for model years 1989 and previous) rates, depending on the vehicle’s age. A factor is then applied to that rate based on the cost new of the vehicle and the age of the operators. A higher rate applies if any operators are under age twenty-five.

Snowmobiles and All-Terrain Vehicles

The rules manual says that a snowmobile is “a motor vehicle designed for use principally on snow or ice, using wheels or crawler-type treads or belts for locomotion across land, ice or snow.” The definition does not include a vehicle using airplane type propellers or fans. Form PP 03 20, which is used to provide snowmobile coverage, also includes within the definition any trailer designed to be pulled by a snowmobile. A trailer used to transport the snowmobile itself is not covered by this form.

The rules also define an all-terrain vehicle as “a four or six wheel motor vehicle equipped with balloon tires or crawler treads, designed for use on rugged terrain or rugged terrain and water.”

Liability coverage for either snowmobiles or all-terrain vehicles is rated at 50 percent of the applicable private passenger base rate for a territory. The rate reduction contemplates seasonal usage. Thus, the insured may not add and remove liability coverage. As with motorcycles, the insured may reduce his liability premium by choosing to exclude the passenger hazard. The reduction is, again, 40 percent for split limits and 20 percent for single limits.

Medical payments coverage of $1,000 is available. The rate is 200 percent of the private passenger rate. Uninsured motorists coverage is available at the private passenger rate.

Physical damage rates are based on the cost new of the vehicle and the deductible. A stated amount is selected for the vehicle. Then, a rate per $100 of value is applied.

Dune Buggies

The rules manual says that a dune buggy is “a motor vehicle of the private passenger type designed or modified for use principally off public roads.” As with all-terrain vehicles, the liability rate for nonregistered dune buggies (90 percent of the private passenger rate) already contemplates seasonal use. Registered dune buggies are classified as private passenger vehicles. The same rate reduction applies for exclusion of the passenger hazard. Medical payments and uninsured motorists coverage are available at the private passenger rate.

Physical damage rates are based on the cost new of the vehicle and the deductible. A stated amount is selected for the vehicle. Then, a rate per $100 of value is applied.

Golf Carts

The ISO rules define a golf cart as “a three or four wheel motor vehicle with limited speed capabilities designed to carry golfers and their equipment around a golf course.” At least one insurer also covers golf carts while being driven to and from a golf course.

As with all-terrain vehicles, the liability rate (25 percent of the private passenger rate) already contemplates seasonal use. However, since the rules say nothing about medical payments or uninsured motorists coverage for golf carts, it appears that those coverages are not available.

Physical damage rates are based on the cost new of the vehicle and the deductible. A stated amount is selected for the vehicle. Then, a rate per $100 of value is applied.

Antique and Classic Autos

For insurance purposes, an antique auto is a private passenger auto that is twenty-five or more years old and maintained “primarily for use in exhibitions, club activities, parades and other functions of public interest, and occasionally used for other purposes.” As with all-terrain vehicles, the liability rate (40 percent of the private passenger rate) already contemplates seasonal use. Medical payments, uninsured motorists coverage, and no-fault are the same as the applicable private passenger rates. Physical damage coverage is on a stated amount basis.  

A classic auto is a private passenger motor vehicle that is ten or more years old and “may be used on a regular basis.” The manual states that the value of a classic auto is “significantly higher than the average value of other autos” of the same make and year. Liability, medical payments, and uninsured motorists coverages are rated the same as a private passenger auto. The physical damage coverage is on a stated amount basis. The amount of value is converted to a symbol and the rate for the current model year applies.

Using the rate for the current model year along with a stated amount helps the insurer collect a premium commensurate with the exposure. The unendorsed PAP settles physical damage losses on an actual cash value (ACV) basis, but the ACV of a ten-year-old car in good condition may be considerably more than the original symbol and model year of the car now contemplate. By rating a classic auto as current model year the insurer is obtaining a premium more in line with the exposure of a more valuable car. The use of a stated amount limits the insurer’s top-end payout in the event of a total loss.

The content in this publication is not intended or written to be used, and it cannot be used, for the purposes of avoiding U.S. tax penalties. It is offered with the understanding that the writer is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought.