Topics Covered:

“You” and “Your”

Leased Cars

“We” “Us” and “Our”

“Bodily Injury”

“Business”

“Family Member”

“Occupying”

“Property Damage”

“Trailer”

“Your Covered Auto”

“Newly Acquired Auto”

“Transportation Network Platforms”

A. Throughout this Policy “you” and “your” refer to:

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1. The named insured shown in the Declarations' and
2. The spouse if a resident of the same household.

If the spouse ceases to be a resident of the same household during the policy period or prior to the inception of this Policy, the spouse will be considered “you” and “your” under this Policy but only until the earlier of:

1. The end of 90 days following the spouse's change of residency;

2. The effective date of another policy listing the spouse as a named insured; or

3. The end of the policy period.

The terms “You” and “Your” when used in the personal auto policy refer to the person named in the declarations and his or her resident spouse, if living in the same household. If the spouse, for whatever reason, moves out of the named insured's household, he or she can still be considered a named insured, but there is a time limit to that status. This limitation to named insured status is the PAP acknowledging that married couples divorce and separate. The spouse that has moved out of the named insured's home, though, becomes responsible for procuring their own insurance.

B. “We” “us” and “our” refer to the Company providing this insurance.

These pronouns refer exclusively to the insurance company.

C. For purposes of this Policy, a private passenger type auto, pickup or van shall be deemed to be owned by a person if leased:

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1. Under a written agreement to that person; and
2. For a continuous period of at least six months.

Other words and phrases are defined. They are in quotation marks when used.

Although located under the definitions heading, the leased vehicles section deviates from a normal definition. The statement clarifies that a private passenger auto, pickup, or van leased by a person is considered an owned vehicle when the lease is in writing and it lasts for a continuous period of at least six months.

D. “Bodily Injury” means bodily harm, sickness or disease, including death that results.

Throughout the form, bodily injury means bodily harm, sickness, disease, or resulting death. Some jurisdictions have held that emotional distress that results in physical manifestation meets the definition.

E. “Business” includes trade, profession or occupation.

Like the definition states, a “business” includes a trade, a profession, or an occupation. Generally, to constitute a business, two elements must be present: 1) a continuity or recurrent character of the activity, and 2) a profit motive.

F. “Family Member” means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.

A family member is a person related to the named insured (or resident spouse) by blood, marriage or adoption. To qualify as a “family member” such a relative must reside in the named insured's household. This definition becomes especially important when the policy defines an “insured” to include any family member or when it refers to vehicles not listed in the policy but owned by a family member. A ward or foster child residing in the named insured's household is also considered a family member.

G. “Occupying” means:

1. In;

2. Upon; or

3. Getting in, on, out, or off.

In some cases coverage may hinge on whether or not the injured person was occupying an auto. According to the PAP, occupying means in or upon, as well as getting in, on, out, or off. However, according to some courts, “occupying” can be subject to different interpretations.

Whether a person is occupying a vehicle for insurance coverage purposes comes down to judicial interpretation.

H. “Property damage” means physical injury to, destruction of or loss of use of tangible property.

The PAP defines property damage as physical injury to, destruction of, or loss of use of tangible property. As an example, if an insured driver crashes into the car of a salesperson who is constantly on the road, the at-fault driver's PAP, which includes property damage liability coverage, would pay for the damage to the salesperson's car and any property inside it. It would also pay for a rental car so that the salesperson could continue to work (loss of use).

I. “Trailer” means a vehicle designed to be pulled by a

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   1. Private passenger auto; or
   2. Pickup or van

It also means a farm wagon or farm implement while towed by a vehicle listed in 1. or 2. above.

A “trailer” is a vehicle designed to be pulled by a private passenger auto, a pickup, or a van. Trailer includes a farm wagon or farm implement while towed by a private passenger auto, pickup, or van. The important part of the definition here is that a trailer is pulled behind a vehicle. A self-propelled mobile home is not considered to be a trailer. However, because the PAP places no size limit on trailers, the term could even include a very large travel trailer. Often these are larger than cars, considerably longer and heavier, and pulled by pickups or sport utility vehicles.

J. “Your covered auto” means:

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   1. Any vehicle shown in the Declarations;
   2. A “newly acquired auto”;
   3. Any “trailer” you own; or
   4. Any auto or “trailer” you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its: |
      1. Breakdown;
      2. Repair;

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• Servicing;

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1. Loss; or
2. Destruction.

This provision (J.4) does not apply to Coverage For Damage To Your Auto.

The PAP defines “your covered auto” in order to differentiate between the named insured's covered auto and other autos. The named insured and resident family members have coverage while using any auto (with certain exceptions), while others have coverage (under the insured's policy) while using the named insured's covered auto with permission. “Trailer” and “newly acquired auto” are defined terms, but temporary substitute is not defined.

K. “Newly Acquired Auto”:

1. “Newly acquired auto” means any of the following types of vehicles you become the owner of during the policy period:

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   1. A private passenger auto; or

   2. A pickup or van, for which no other insurance policy provides coverage, that:

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      1. Has a Gross Vehicle Weight Rating of 10,000 lbs or less; and

      2. Is not used for the delivery of transportation of goods and materials unless such use is:

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         1. Incidental to your “business” of installing, maintaining, or repairing furnishings or equipment; or
         2. For farming or ranching

      3. Coverage for a “newly acquired auto” is provided as follows:

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         1. For any coverage provided in this Policy other than Coverage For Damage To Your Auto, a “newly acquired auto” will have the broadest coverage we now provide for any vehicle shown in the Declarations. However, for this coverage to apply, you must ask us to insure it within 14 days after you become the owner.

         2. Collision Coverage for a “newly acquired auto” begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within:

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            1. 14 days after you become the owner, if the Declarations indicates that Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations
            2. Four days after you become the owner, if the Declarations does not indicate that Collision Coverage applies to at least one auto. If you comply with the four-day requirement and a loss occurred before you asked us to insure the “newly acquired auto”, a Collision deductible of $500 will apply.

         3. Other Than Collision Coverage for a “newly acquired auto” begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within:

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            1. 14 days after you become the owner, if the Declarations indicates that Collision Coverage applies to at least one auto. In this case, the “newly acquired auto” will have the broadest coverage we now provide for any auto shown in the Declarations
            2. Four days after you become the owner, if the Declarations does not indicate that Collision Coverage applies to at least one auto. If you comply with the four-day requirement and a loss occurred before you asked us to insure the “newly acquired auto”, a Collision deductible of $500 will apply.

         4. For all coverages addressed in Paragraphs K.2.a.,b. and c., if you first ask us to insure the “newly acquired auto” after the applicable time period has elapsed, coverage will begin on the day you first ask us to insure the “newly acquired auto”.

People generally buy new or used cars as a replacement for an older vehicle or for one that has been lost or damaged. More often than not, the replacement vehicle is an upgrade, from an older vehicle to a newer model, or from a lower-priced car to a more expensive auto. The owner might have dropped physical damage coverage on the older vehicle, but with the purchase of a new car of a higher value, perhaps with a loan or a lease, are likely to make physical damage coverage necessary for a new car. Liability coverage, though, is much the same and usually costs the same regardless of the age of the car. The “newly acquired auto” definition in the PAP is designed to handle these dynamics by providing a few days of coverage for the insured to bring the new vehicle home and notify the insurance company.

A private passenger auto or an eligible pickup or van becomes a “newly acquired auto” on the day the insured becomes the owner. Such acquisition must occur during the policy period. In order for a pickup or van to qualify as a “newly acquired auto” it must have a Gross Vehicle Weight Rating (GVWR) of 10,000 pounds or less (GVWR is defined in the Federal Motor Vehicle Safety Standards 49 CFR 571.3.) Additionally, the van or pickup must not be used for the “delivery or transportation of goods and materials.” The insured may use a pickup or a van for farming purposes or if the “delivery or transportation” use is “incidental” to the insured's business of “installing, maintaining or repairing furnishings or equipment.”

Because what is “incidental to the insured's business” is not defined in the policy, it may be left to a wide interpretation when use of a newly acquired pickup or van is in question. A plumber who buys a new pickup truck and uses it to take himself and his tools from job to job would have coverage under this provision. The truck is incidental to his occupation as a plumber.

Liability, medical payments, and uninsured motorists coverage for a newly acquired auto is automatically in force the day the insured purchases it. If the insured's listed cars do not all have the same coverage, the newly acquired auto automatically receives the same coverage as the listed vehicle with the broadest coverage.

The 2018 version of the PAP no longer distinguishes between a newly acquired replacement vehicle and a newly acquired additional vehicle. For coverage to apply, the insured must notify the insurer of the new vehicle within fourteen days and the insured must ask the insurer to insure the car. If the insured waits longer than fourteen days, coverage will not begin until the day the insured requests that coverage.

Physical damage coverage is treated differently. Temporary automatic collision coverage depends in part, on whether the policyholder has carried collision coverage in the past.

• If no car listed in the policy has collision coverage, the PAP provides temporary automatic collision coverage for four days subject to a $500 deductible.
• If at least one other car has collision damage coverage, the newly acquired auto automatically has temporary collision coverage as of the date of the acquisition, and the deductible is the lowest deductible applicable to any listed auto. In this case, the insured must request permanent coverage within fourteen days.

The same provisions in the above paragraph also apply to other than collision (comprehensive) coverage for newly acquired autos. If no listed vehicle had the coverage, the newly acquired vehicle has temporary automatic $500 deductible comprehensive coverage for four days. If one or more listed vehicles have the coverage, the broadest (lowest deductible) coverage automatically applies for fourteen days.

For all coverages, if the four-day or fourteen-day period during which a newly acquired auto should be reported and coverage requested, has passed, the insured is without coverage for that vehicle. If the insured subsequently asks the insurer to insure the newly acquired auto, coverage begins 'on the day you first ask us to insure the 'newly acquired auto.'” The policy specifically refers to “the day” rather than “the time.” Technically, this suggests that the insured could have an accident and request insurance later the same day. However, it seems unlikely that a court would overturn the insurer's denial of coverage in this situation. There are those who have used their phones to obtain coverage online after they have been involved in an accident and those claims have been denied.

L. “Transportation network platform” means an online-enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing pre-arranged transportation services for compensation.

The emerging exposures associated with Uber, Lyft, and other vehicle and ride-sharing platforms make it necessary for the PAP to address these issues. As the first step in a series of policy revisions, the 2018 PAP introduced a definition of the term “transportation network platform.” This definition is intended to be broad enough to encompass a wide range of arrangements.