Topics covered:

General information

"Your covered auto" redefined

Liability and medical payments coverage

Coverage for damage to the named insured's auto

Limit of liability

Rating

Motor home endorsement

General Information

 Only private passenger autos, pickup trucks, and vans are eligible for coverage under the ISO personal auto policy (PAP). Additionally, there is a weight restriction—vehicles with a gross vehicle weight rating of 10,000 pounds or less, or vehicles with a gross vehicle weight rating of over 10,000 pounds for which a symbol is displayed in the symbol and identification section of the personal vehicle manual (PVM) are eligible under the ISO 2018 personal auto program. However, many motor homes do not meet this criterion and would not qualify. For example, a common class C motor home has a gross vehicle weight over 10,000 pounds, but the base manufacturer's suggested retail price starts at $87,400 as of this writing. This endorsement provides coverage for motor homes, including coverage for liability, med pay, comprehensive and collision while the home is rented to others.

 Another consideration is that the PAP specifically states that it will not provide liability coverage for the "ownership, maintenance or use of any vehicle which has fewer than four wheels; or is designed mainly for use off public roads." This provision would automatically preclude coverage for a considerable range of vehicles, among them: motorcycles, golf carts, dune buggies, and all-terrain vehicles if the policy were not endorsed. If the insurer agrees, such vehicles can be insured, under the rules and forms of Insurance Services Office (ISO), through a personal auto policy by attaching the miscellaneous type vehicle endorsement, PP 03 23 09 18, to the policy. This is especially convenient for insureds who own miscellaneous type vehicles in addition to private passenger cars, all of which can now be insured under the same policy. Dune buggies, all-terrain vehicles, golf carts, and motor homes may all be covered when this endorsement is added to an auto policy.

 The endorsement can be used for virtually any type of motor vehicle that meets other personal auto eligibility requirements—nonfleet risk, not owned by corporation or partnership (other than farm family), etc. One exception is snowmobiles, for which ISO has prepared a separate endorsement, see Snowmobile Endorsement. The miscellaneous type vehicle endorsement can be used to provide all of the usual coverages of the personal auto policy: liability, medical payments, uninsured motorists, collision, and other than collision coverage. The endorsement includes a schedule that must be completed with descriptions of the vehicles and premiums and limits of liability for each coverage. Both the old and new form have a place to indicate if the passenger hazard exclusion should apply to the vehicles listed in the schedule; the passenger hazard exclusion can also be listed on the declaration. The 2018 form indicates that the exclusion can be indicated on the endorsement or the declarations; the 2005 form just lists the hazard exclusion with no indication that it can also be listed on the declarations.

 Additionally, the endorsement is commonly used to provide physical damage coverage for trailers or camper bodies designed for use with a pickup. The policy automatically provides liability coverage for these (two exceptions to this provision are: (1) if the insured uses them for business purposes with other than a private passenger auto or owned pickup or van; and (2) if the insured owns no auto, such as with a named nonowner policy). There is no automatic physical damage coverage unless added by endorsement. The endorsement can also be used to insure classic cars and antique cars, but the insured should be made aware that the endorsement does not provide coverage for these on an "agreed value" basis. Vehicles having significant value are best insured through a specialty market.

 The endorsement changes the general definition of "your covered auto" and a number of liability provisions of the regular personal auto policy. All other provisions of the personal auto policy remain intact and applicable to the insured miscellaneous vehicle. The provisions of the endorsement do not affect the coverage of the personal auto policy as it may apply to private passenger types insured in the same policy.

 "Your Covered Auto" Redefined

 The endorsement adds a definition for "miscellaneous type vehicle"; the term means "a motor home, motorcycle or other similar type vehicle, all-terrain vehicle, dune buggy or golf cart." ISO rules classify mopeds, motorscooters, motorbikes, go-carts and other similar vehicles as motorcycles. Like the personal auto policy, the endorsement uses the defined term, "your covered auto." The term is then amended to include any miscellaneous type vehicle described in the endorsement schedule or policy declarations. The definition of "newly acquired auto" is modified to include miscellaneous type vehicle of the same type as shown in the schedule or declarations, as well as a newly acquired auto other than a miscellaneous type vehicle that fits the description as noted on the endorsement. This description matches the one found on the personal auto policy; see  Personal Auto Definitions.

 Also qualifying as "your covered auto" is an owned or nonowned "trailer" as defined in the personal auto policy. Nonowned miscellaneous type vehicles meet the definition while used as a temporary substitute for any other covered auto that is out of normal use because of its breakdown, repair, servicing, loss, or destruction. The temporary substitute can be any nonowned miscellaneous type vehicle or any nonowned auto. The miscellaneous type vehicle endorsement extends coverage for damage to the named insured's auto, by expanding the definition of nonowned auto. PP 03 23 includes following to the definition of "your covered auto": "any motor home, motorcycle, or other similar type vehicle, all terrain vehicle, dune buggy, or golf cart that you do not own while used as a temporary substitute for 'your covered auto' that is out of normal use because of its breakdown, repair, servicing, loss, or destruction." See the heading Coverage for Damage to the Named Insured's Auto for more information.

 The 2018 form adds a definition of "fungi" to the form. "Fungi" is defined as any type of fungus, including mold, mildew and any mycotoxins, spores, scents or by-products produced or released by said fungus. It may seem odd that a definition of fungi is added to a vehicle endorsement. However, motorhomes may sustain water damage that could lead to the growth of mold or other fungi. Therefore, fungi need to be defined so that it can later be excluded in the endorsement.

 Liability and Medical Payments Coverage

 The endorsement defines the named insured and family members as insureds for the ownership, maintenance, or use of "your covered auto (as defined on the endorsement)." It also extends insured status to any other person for the use of "your covered auto." Other persons using "your covered auto" must do so with a reasonable belief that they are entitled to do so. In addition, the endorsement covers the vicarious liability of any person or organization for the acts or omissions of another insured person.

 PAP excludes liability coverage for the ownership, maintenance, or use of any vehicle with fewer than four wheels. Form PP 03 23 extends coverage to such vehicles that are insured for liability coverage under PP 03 23. The endorsement changes Part B Medical Payments Coverage to state that there is no coverage for any insured for injury sustained while occupying a vehicle with fewer than four wheels unless the coverage is indicated on the endorsement. In other words, medical payments coverage must be specifically purchased. However, this coverage is on a "refer to company" basis and because medical payments coverage is, along with the passenger hazard (see next paragraph), perhaps the two greatest exposures for these vehicles, coverage will probably be not only expensive but also limited. For example, the medical payments limit for snowmobiles and ATVs is $1,000.

 The endorsement also contains an optional exclusion, involving the passenger hazard. The insured may choose to exclude passenger liability by marking the appropriate box on the endorsement. With this alternative, there is no liability coverage for any insured for bodily injury to any person while occupying the described miscellaneous type vehicle. It is important to make sure a motorcycle owner understands this. One of the biggest exposures for motorcyclists is transporting someone on the passenger seat or in a sidecar.

 Coverage for Damage to the Named Insured's Auto

 Endorsement PP 03 23 amends part D – Physical Damage Coverage of the personal auto policy. Added to the insuring agreement is coverage for direct and accidental loss to facilities and equipment—cooking, dining plumbing, refrigeration facilities, awnings or cabanas, or any other facilities designed to be used with a motor home. The facilities and equipment have to be in or attached to the motor home for coverage to apply, and the motor home has to be shown in the schedule of the endorsement. The endorsement also extends coverage to nonowned autos that are motor homes, motorcycles, all-terrain vehicles, dune buggies, and golf carts used as temporary substitutes for the covered autos that are out of normal use due to breakdown, repair, servicing, or loss. An additional exception to the exclusion is added for any nonowned motorhome while used as a temporary substitute for the covered auto that is out of use due to breakdown, repair, servicing, loss or destruction. This is new in the 2018 form.

 An exclusion of coverage for clothing or luggage, business or office equipment, or articles that are sales samples or used in exhibitions is added. Additionally, the PAP exclusions 4., 5., 9., and 10. apply; equipment that is normally excluded or limited under the PAP will still be excluded or limited when located on a miscellaneous-type vehicle.

 A new exclusion has been added for loss due to "fungi", wet or dry rot or bacteria. This means the presence, growth, proliferation, spread or any activity of the "fungi", wet or dry rot, or bacteria. As mentioned earlier, while it is not likely for a motorcycle to sustain damage by fungi motorhomes do sustain water damage and can have issues with mold and other fungi. Therefore, this is a new exclusion in the 2018 form.

 Limit of Liability

 The miscellaneous type vehicle endorsement amends the usual limit of liability provision for coverage for damage to a vehicle described in the schedule. It limits recovery to the lesser of: (1) the amount shown in the schedule or in the declarations; (2) the actual cash value of the stolen or damaged property; or (3) the amount necessary to repair or replace the property with other property of like kind and quality. Any payment for a loss will be reduced by any applicable deductible; and, if loss to more than one covered auto results from the same collision, only the highest applicable deductible will apply. An adjustment for depreciation and physical condition will be made in determining actual cash value at the time of loss. Finally, if a repair or replacement results in better than like kind or quality, the insurer will not pay for the amount of the betterment.

 The insured should be aware of that final sentence concerning a betterment of the damaged vehicle. Even though the insurer declares that it will pay "the amount necessary to repair or replace the property with other property of like kind or quality," if that amount includes a betterment of the damaged vehicle, the insured is not going to receive what he may believe is the total "amount necessary." The insured will receive an amount that will put him in the same position as before the loss— the purpose of insurance, after all— and not an amount that will leave the insured with a more valuable item.

 Rating

 Because the endorsement encompasses a wide range of vehicle types, there is no single rating procedure for all eligible vehicles. However, the miscellaneous types rule of the personal auto manual, in combination with the state exception pages, has rules and rates for motorcycles, mopeds, motorscooters, motorbikes, and similar motor vehicles not used for business; golf carts; motor homes; ATVs, and dune buggies. The general rules for rating each class are quite uncomplicated. Only the general rules for motorcycles and similar types are discussed here for example purposes. As always, the state exception pages should be consulted prior to following general rules, because the rating of miscellaneous types is often subject to territorial variations.

 Liability premiums for motorcycles and other similar vehicles begin with the appropriate base liability premium (that which would apply to a private passenger auto in the insured's territory). That figure is then multiplied by a modifier expressed as a percentage. These modifiers, which range from 100 percent to 406 percent, are displayed in a table in the general rule for miscellaneous types. The table is broken out by age and years licensed. Likewise, there is a table for vehicle type and engine size. Each category has modifiers that increase with engine size, i.e., displacement in cubic centimeters. No other rating or classification factors are used.

 Collision and comprehensive premiums are figured in much the same way as liability premiums. There is a table in the personal vehicle manual rules showing collision premium modifiers and another for comprehensive premium modifiers. These tables show modifiers that increase with the vehicle's original cost new. (Original cost new, incidentally, is commonly understood to include any taxes and trade-in allowances.) The percentages from these tables are applied based on the retail price of the vehicles in question.

 Motor Home Endorsement

 When the miscellaneous type vehicle endorsement insures a motor home, an additional endorsement is attached to the policy, entitled miscellaneous type vehicle amendment (motor homes), PP 03 28 09 18. This endorsement excludes liability, medical payments, and physical damage coverage on the motor home when the named insured rents or leases it to others. However, coverage for these items can be bought back in the same endorsement. The premium is based on the number of weeks per year that the motor home is rented. Note, however, that the liability exclusion does not apply up to the financial responsibility limits of any compulsory insurance law in the particular state in which the motor home is principally garaged.

 Owners of motor homes should have this endorsement carefully explained to them. Because of the cost of these vehicles, it is tempting to rent them to others to recoup part of that cost. Insureds need to be aware that if they contemplate renting the vehicle to another, the coverage must be purchased. The insured cannot rely on the renter's auto policy to provide coverage.

 The following additional exclusion also applies to any motor home that is "your covered auto:" there is no coverage for loss to the motor home or its covered property due to fraudulent acquisition by any person or organization that occurs while the motor home is rented to, used by, or in the care of that person or organization. The endorsement does not provide the means of buying back this exclusion.