PAP Coverage and Family Member Issues

March 18, 2013

Our insured's granddaughter is operating the insured's vehicle (with permission) when she rear ends a vehicle in front of her. The vehicle she rear ended is owned by the insured's son who also lives in the insured's household and meets the definition of a family member. The granddaughter does not live in the household. The granddaughter's husband was operating the insured's son's vehicle at the time of the loss. The insured's son's vehicle has a PAP through another carrier. He is not listed on our insured's policy as a named driver.

My question is this. Under the PAP PP 00 01(01 05), is there liability coverage for the damage to the insured's son's vehicle? Does exclusion A.2. or B.3. exclude liability coverage for the property damage? Should the son submit a claim to his own carrier for his damages?

Connecticut Subscriber

Neither exclusion would apply in this instance.

Exclusion A.2 applies to liability coverage for any insured for property damage to property owned or being transported by that insured. Exclusion B.3 applies to liability coverage for the ownership or use of any vehicle other than the covered auto that is owned by any family member.

The granddaughter is an insured under the grandmother's policy since she is using the covered auto with permission of the named insured. Since exclusion A.2 applies to any insured who damages property that that insured owns or is transporting, it is not applicable since the damaged auto is not owned by the granddaughter. Since exclusion B.3 applies to liability coverage for the use of any vehicle other than the covered auto, it is not applicable since the granddaughter was driving the covered auto.

The son should submit the physical damage claim to his insurer but be prepared for a subrogation claim from his insurer against the grandmother's PAP. The damage to his vehicle was caused by an insured under your insured's policy and there is no exclusion to prevent the coverage.

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