Analysis

This section spells out the liability coverage that is provided by the policy. The policy promises to pay compensatory damages for bodily injury or property damage for which the insured is liable. Prejudgment interest awarded against the insured is included.

The insurer will provide a defense to the insured but has the right to settle or defend as it sees fit. The defense cost provided by the insurer is in addition to the policy limits; it will not reduce the limit available.

The insurer's duty to defend ends when the policy's limit has been exhausted by payment of judgments or settlements. The insurer will only provide a defense for a suit that falls within the scope of coverage.

B. "Insured" as used in this Part means:
1.You for the ownership, maintenance or use of:
a. "Your covered auto";
b. Any private passenger auto or "trailer"; or
c. A pickup or van that has a Gross Vehicle Weight Rating of 10,000 lbs. or less.
2. Any "family member" for the maintenance or use of "your covered auto".
3. Any person, other than you or any "family member", using "your covered auto" up to the minimum limits of liability specified by the financial responsibility law of the state in which "your covered auto" is principally garaged.
4. For "your covered auto", any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.
5. For any auto or "trailer", other than "your covered auto", any other person or organization but only with respect to legal responsibility for your acts or omissions. This Provision (B.5.) applies only if the person or organization does not own or hire the auto or "trailer".

Analysis

This section defines the five different types of insureds covered by the policy. The first is the named insured, for the ownership, maintenance, or use of the covered auto, any private passenger auto or trailer, or a pickup or van that has a GVWR of 10,000 pounds or less. In the PP 00 01 Personal Auto Policy, there is no such weight limit.

The second class of insureds are family members, who are covered for the maintenance or use of "your covered auto" only; they are not covered for the use of all autos or trailers. "Your covered auto" includes any vehicle in the declarations, a newly acquired auto, any trailer owned by the insured, or an auto or trailer used as a temporary substitute.

The third class of insureds includes any person, other than the insured or a family member, using the covered auto, but only up to the minimum limits specified by the financial responsibility law of the state where the covered auto is principally garaged.

For example, if the insured has liability limits of 100/300/100 and the state minimum limit is 25/50/25, and the insured lets a friend borrow the vehicle, who then has an at-fault accident, the most that the policy will pay is 25/50/25. Even though the insured carries higher limits, certain classes of insureds are restricted. A state-by-state list of financial responsibility limits can be found here.

This restriction appears throughout the policy; coverage is limited to minimum limits for certain drivers and certain situations. The restriction is unique to the Special Personal Auto Policy, which is designed to insure individuals who may have trouble procuring insurance in the standard market.

The fourth class of insured covers any person or organization for liability arising out of an insured's use of the covered auto on behalf of the person or organization. If, for example, the insured drives the covered auto onto his employer's business, the employer is covered with respect to its liability for any resulting accident.

The final class is similar—a person or organization is covered for the named insured's use of any auto or trailer other than the covered auto and other than any auto or trailer owned by the person or organization. If, for example, the insured drove a coworker's car on his employer's business, coverage would be available if the employer were liable for an accident. However, if the car involved was owned by the business, that would be excluded.
The final class of insured is more restrictive than what is found on the PP 00 01, which includes coverage for a family member's use of an auto or trailer other than the covered auto or an auto owned by an organization.

SUPPLEMENTARY PAYMENTS
We will pay on behalf of an "insured":
1. Up to $250 for the cost of bail bonds required because of an accident, including related traffic law violations. The accident must result in "bodily injury" or "property damage" covered under this policy.
2. Premiums on appeal bonds and bonds to release attachments in any suit we defend.
3. Interest accruing after a judgment is entered in any suit we defend. Our duty to pay interest ends when we offer to pay that part of the judgment which does not exceed our limit of liability for this coverage.
4. Up to $250 a day for loss of earnings, but not other income, because of attendance at hearings or trials at our request.
5. Other reasonable expenses incurred at our request.
These payments will not reduce the limit of liability.

Analysis

The supplementary payments section is identical to that of the PP 00 01 Personal Auto Policy. Up to $250 is provided for the cost of bail bonds required because of an accident, including related traffic law violations, but the accident must have resulted in bodily injury or property damage that is covered by the policy.

Premiums on appeal bonds and bonds to release attachments in a suit defended by the insurer are also covered, as well as interest accruing after a judgment is entered on a suit defended by the insurer.

Up to $250 for loss of earnings per day is provided to an insured due to attendance at hearings or trials at the insurer's request. The PP 90 01 09 18 form increased this number from $200 to $250, which follows the change made in the PP 00 01 09 18.

EXCLUSIONS
A. We do not provide Liability Coverage for any "insured":
1. Who intentionally causes "bodily injury" or "property damage".
2. For "property damage" to property owned or being transported by that "insured".

Analysis

The first five exclusions are identical to those in the PP 00 01, including the changes made in the 2018 update of the program. The first protects against fraud and intentional damage, stating that damage intentionally caused is excluded. The policy is meant to cover bodily injury and property damage resulting from an auto accident. If in a fit of road rage, an insured intentionally hits another vehicle, the resulting damage is not covered.

The second exclusion is for damage to property owned or being transported by an insured. Part A covers liability, and you can't sue or be liable to yourself. Property being transported by an insured is also excluded, which is necessary to prevent an insured from using their auto policy as a cargo policy. An insured transporting cargo will need to seek coverage elsewhere.

3. For "property damage" to property:
a. Rented to;
b. Used by; or
c. In the care of;
that "insured".
This exclusion (A.3.) does not apply to "property damage" to a residence or private garage.
4. For "bodily injury" to an employee of that "insured" during the course of employment. This Exclusion (A.4.) does not apply to "bodily injury" to a domestic employee unless workers' compensation benefits are required or available for that domestic employee.

Analysis

The third exclusion is for property damage to property rented to, used by, or in the care of an insured. This is similar to the homeowner policy's care, custody, or control exclusion. If an insured backs his auto into an electric bicycle that he borrowed from a friend, the damage to the bike is not covered by the policy.
There is an exception to the exclusion for property damage to a residence or private garage. If the insured accidentally crashes into a residence or private garage that he rents, uses, or is in the care of, the policy will respond to a claim from the owner of such property.

Exclusion four precludes coverage for bodily injury to an employee of the insured during the course of employment. An exception is made for bodily injury to a domestic employee unless workers' compensation benefits are available for that employee or were required to be carried. This means that the policy will provide coverage for bodily injury to a domestic employee if workers' compensation does not. However, if the insured was required to acquire workers' compensation for the employee but did not, the auto policy will not provide that coverage.

5. For that "insured's" liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time a vehicle is being used by any "insured" who is logged into a "transportation network platform" as a driver, whether or not a passenger is "occupying" the vehicle.
This Exclusion (A.5.) does not apply to:

1. A share-the-expense car pool; or
2. The ownership or operation of a vehicle while it is being used for volunteer or charitable purposes.

Analysis

Exclusion five precludes coverage for the insured's liability arising out of the use of the vehicle as a public or livery conveyance. Public or livery conveyance includes the use of the vehicle to transport people or property for a fee.

The exclusion in the 2018 program, mirroring the PP 00 01 09 18, added reference to a "transportation network platform" in response to the growing popularity of ridesharing apps such as Uber and Lyft. These are commercial liabilities and should not be covered under a personal auto policy.

The exclusion specifies that it is applicable even when there is no passenger occupying the vehicle, if the insured driver is logged into the transportation network platform. Coverage is excluded from the moment the insured turns on the application to look for people to transport and while transporting passengers. If an insured turns the app on and finds a customer, and while on the way to pick the customer up gets into an accident, there is no coverage.
Excepted from the exclusion are a share-the-expense car pool and, added in the 2018 program, the ownership and operation of the vehicle while it is being used for volunteer or charitable purposes. If the insured, while working as a volunteer for a charity, delivers donated food to the local food bank, any accidents that would occur in transit would be covered.

6. While employed or otherwise engaged in the "business" of:
a. Selling;
b. Repairing;
c. Servicing;
d. Storing; or
e. Parking;
vehicles designed for use mainly on public highways. This includes road testing and delivery. This exclusion (A.6.) does not apply to the ownership, maintenance or use of "your covered auto" by any of the following persons up to the minimum limits of liability specified by the financial responsibility law of the state in which "your covered auto" is principally garaged:
a. You;
b. Any "family member"; or
c. Any partner, agent or employee of you or any "family member".
7. Maintaining or using any vehicle other than "your covered auto" while that "insured" is employed or otherwise engaged in any "business" (other than farming or ranching) not described in Exclusion A.6.

Analysis

Exclusion six excludes coverage while the insured is in the business of selling, repairing, storing, parking, or servicing vehicles. Excepted from the exclusion is the ownership, maintenance, or use of the covered auto by the insured, the insured's family members, or a partner, agent, or employee of the insured or a family member.

The exclusion differs from the PP 00 01 exclusion in that, in the exception, coverage is provided only up to the minimum limits of liability as specified by the state financial responsibility laws in which the auto is principally garaged.

Exclusion seven is similar and makes it clear that the policy is not designed to cover a commercial auto exposure. The exclusion applies to any maintenance or use of any vehicle while the insured is employed or otherwise engaged in a business not described in the previous exclusion, other than farming or ranching.
The PP 00 01 includes an exception for the maintenance or use of a private passenger auto, pickup or van, or trailer used with the above. The PP 90 01, being more restrictive, has no such allowance. The PP 00 01 would allow for incidental business use of a vehicle other than the covered auto, such as, for example, using an auto to deliver a contract proposal to a client. The PP 90 01 would not cover this exposure.

8. Using a vehicle without a reasonable belief that that "insured" is entitled to do so. This exclusion (A.8.) does not apply to a "family member" using "your covered auto" which is owned by you.
9. For "bodily injury" or "property damage" for which that "insured":
a. Is an insured under a nuclear energy liability policy; or
b. Would be an insured under a nuclear energy liability policy but for its termination upon exhaustion of its limit of liability.
A nuclear energy liability policy is a policy issued by any of the following or their successors:
a. Nuclear Energy Liability Insurance Association;
b. Mutual Atomic Energy Liability Underwriters; or
c. Nuclear Insurance Association of Canada.

Analysis

Exclusions eight and nine are identical to those found in the Personal Auto Policy PP 00 01. Exclusion eight applies to the use of a vehicle without the reasonable belief that the insured is entitled to do so. The exclusion does not apply to a family member using the insured's covered auto. Family members by default have a reasonable belief they are entitled to use the auto.

Exclusion nine applies to liability arising from nuclear energy. The policy does not cover bodily injury or property damage for which the insured is an insured under a nuclear energy liability policy, or would be an insured under such a policy but for its termination.

Nuclear energy liability policies cover insureds against liability resulting from nuclear damage; the auto policy is not designed to cover this exposure.

10. For that "insured's" liability arising out of the ownership or operation of a vehicle while it is being used for the delivery of food or products, including but not limited to newspapers and magazines.
This exclusion (A.10.) does not apply to a delivery by an "insured" as a volunteer.
11. For the ownership, maintenance or use of "your covered auto" while:
a. Enrolled in a personal vehicle sharing program under the terms of a written agreement; and
b. Being used in connection with such personal vehicle sharing program by anyone other than you or any "family member".

Analysis

Exclusion ten is unique to the PP 90 01 and is not found in the PP 00 01. Specifically excluded is liability of an insured due to the ownership or operation of a vehicle being used for the delivery of food or products, including but not limited to magazines and newspapers.

This directly excludes an insured's use of their vehicle for something like delivering pizzas, as well as the delivery of other food and products. Excepted from the exclusion is delivery when the insured is acting as a volunteer. The insured delivering food or products while working as a volunteer would not be excluded.
The Personal Auto Policy, in contrast, would provide coverage to the insured for liability while delivering pizzas. The public or livery exclusion would not apply since the driver is not holding himself out for hire, but rather, is being told by his employer to deliver the pizzas.

Exclusion eleven was added in the 2018 program and is identical to that of the PP 00 01. Excluded is the use of the covered auto while enrolled in a personal vehicle sharing program and while being used in connection with such a program by anyone other than the insured or a family member. Similar to ride-sharing apps, this includes programs where the insured makes their vehicle available for rental, such as Turo.

B. We do not provide Liability Coverage for the ownership, maintenance or use of:
1. Any vehicle which:
a. Has fewer than four wheels; or
b. Is designed mainly for use off public roads.
This exclusion (B.1.) does not apply:
a. While such vehicle is being used by an "insured" in a medical emergency; or
b. To any "trailer".

Analysis

This section limits the kind of vehicle that is covered under the policy. Vehicles with less than four wheels, such as motorcycles, and vehicles designed mainly for use off roads, such as ATVs, are excluded.

The exclusion does not apply to any aforementioned vehicle while being used in a medical emergency, or to any trailer. If an insured uses a motorcycle to get someone to a hospital while in a medical emergency, the exclusion would not apply. The Personal Auto Policy PP 00 01 counterpart also excepts from the exclusion any non-owned golf cart; that is not found in the PP 90 01. If the insured is liable for an accident while using a non-owned golf cart, the PP 90 01 will not provide coverage.

2. Any vehicle, other than "your covered auto", which is:
a. Owned by you; or
b. Furnished or available for your regular use.
3. Any vehicle, other than "your covered auto", which is:
a. Owned by any "family member"; or
b. Furnished or available for the regular use of any "family member".

Analysis

Liability is not provided for any vehicle, other than the covered auto, that is owned by the insured or available for use by the insured, or owned by a family member or furnished or available for use to a family member. An example would be an auto available for use by an insured provided by an employer. Neither this policy nor the PP 00 01 will cover any such vehicles, as they should have their own insurance policy.

Exclusion three differs from that found in the PP 00 01, which states that the exclusion does not apply to the named insured while maintaining or occupying a vehicle owned or furnished to a family member; that exception is not found in the PP 90 01.

4. Any vehicle for the purpose of:
a. Participating or competing in; or
b. Practicing or preparing for;
any prearranged or organized;
(1) Racing or speed contest; or
(2) Driver skill training or driver skill event
5. Any vehicle which is designed or can be used for flight

Analysis

The standard racing exclusion is included. There is no liability coverage for any vehicle while participating or competing, or practicing or preparing, for a speed contest or a driver skill training or driver skill event. Racing would, of course, increase the likelihood of crashing and any potential liability.
Finally, the 2018 program added an exclusion for any vehicle that can be used for flight, mirroring the PP 00 01. The auto policy is not designed to cover this exposure.

C. To the extent that the limits of liability for this coverage exceed the minimum limits of liability required by the financial responsibility law of the state in which "your covered auto" is principally garaged, we do not provide Liability Coverage for any "insured":
1. While operating a vehicle while that "insured" is under the influence of:
a. Alcohol; or
b. A controlled substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs.
This Exclusion (C.1.) does not apply to the legitimate use of prescription drugs by a person following the lawful orders of a licensed health care professional.
2. Who causes "bodily injury" or "property damage" while committing a felony.
3. Who causes "bodily injury" or "property damage" while seeking to avoid lawful apprehension or arrest by a law enforcement official.
4. While operating a vehicle without a valid driver's license or permit.
5. Maintaining or using "your covered auto" while that "insured" is employed or otherwise engaged in any "business" (other than farming or ranching) not described in Exclusion A.6.
This exclusion (C.5.) does not apply to the maintenance or use of a "your covered auto" if you have notified us before the accident that such "your covered auto" will be used in "business".
6. While operating a vehicle if that "insured" is a "family member" or other person who is a resident of your household, unless you have notified us before the accident that such "family member" or person is an operator.
D. We do not provide Liability Coverage for punitive or exemplary damages.

Analysis

This section is unique to the PP 90 01 and places limitations on liability in certain scenarios. Liability for certain scenarios is limited to the minimum limits required by the financial responsibility law of the state in which the covered auto is principally garaged.

The first is when the insured is operating a vehicle while under the influence of alcohol or a controlled substance found under the Federal Food and Drug Law. This does not apply to the lawful use of prescription drugs. So, if an insured is liable for an accident while drunk driving, the most the policy will pay is the minimum limits required by the state financial responsibility law, even if the policy contains higher limits.

Also subject to the limitation is if an insured causes bodily injury or property damage while committing a felony or while seeking to avoid lawful apprehension by a law enforcement official. If an insured flees from police while being lawfully detained, any resulting car accident will be subject to the limitation.
Also subject to the minimum limit is the insured driving without a valid driver's license or permit, and the use of the covered auto when the insured is engaged in business other than farming and ranching and is not described in exclusion A.6, which excludes the business of selling, servicing, storing, or parking vehicles. However, the exclusion does not apply if the insured notified the insurer that the auto is going to be used in the business.

The final limitation is on an insured while operating a vehicle if the insured is a family member or other person who is a resident of the insured's household. The limitation would not apply if the insured notified the insurer before an accident that the family member or resident of the household is an operator of the vehicle.

For example, if the insured's brother moved into the house right after the policy was issued and was never declared an operator of the vehicle, the brother would only have the minimum limits available if they were liable for an accident. If, however, the insured had notified the insurer before the accident that the brother had moved in and would be an operator of the vehicle, then the limitation would not apply, and the full policy limits would be available.
Finally, the policy states there is no liability coverage for punitive or exemplary damages. This limitation is not found in the PP 00 01 Personal Auto Policy.

LIMIT OF LIABILITY
A. The limit of liability shown in the Declarations for each person for Bodily Injury Liability is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of "bodily injury" sustained by any one person in any one auto accident. Subject to this limit for each person, the limit of liability shown in the Declarations for each accident for Bodily Injury Liability is our maximum limit of liability for all damages for "bodily injury" resulting from any one auto accident.
The limit of liability shown in the Declarations for each accident for Property Damage Liability is our maximum limit of liability for all "property damage" resulting from any one auto accident.
This is the most we will pay regardless of the number of:
1. "Insureds";
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the auto accident.

Analysis

Section A of the limit of liability clause is the standard policy language, stating that the most the insurer will pay for any one accident are the limits shown in the declarations.

The limit of liability shown for bodily injury liability is the maximum amount the insurer will pay due to any one auto accident; the property damage limit of liability is the most the insurer will pay due to any one auto accident. This clause also declares that the policy has a per person limit. The amount shown in the declarations is the most the insurer will pay for all damages arising out of bodily injury sustained by any one person in any one accident.

For example, say the policy has a $50,000 per person bodily injury limit, a $100,000 per accident bodily injury limit, and a $25,000 property damage limit. If an accident occurs and there are two people injured due to the negligence of the named insured, each person could receive $50,000 total for the bodily injuries. If there were more than two persons injured, the insurer would pay no more than the $100,000 limit for the accident; the amounts that the individuals would receive could vary, but no more than $50,000 per person.

If there were only one person injured and the bodily injury damages amounted to $75,000, the named insured's personal auto would only pay the $50,000 per person limit. If the total property damages were $25,000, that is the amount the insurer would pay.

The insurer will not pay more than any of the listed limits, regardless of how many insureds were involved, how many vehicles were involved in the accident, or the number of claims made.

B. If Liability Coverage is payable on behalf of any person other than you or any "family member":
1. That part of the limit of liability shown in the Declarations for each person for Bodily Injury Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which "your covered auto" is principally garaged is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of "bodily injury" sustained by any one person in any one auto accident.
2. Subject to this limit for each person, that part of the limit of liability shown in the Declarations for each accident for Bodily Injury Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which "your covered auto" is principally garaged is our maximum limit of liability for all damages for "bodily injury" resulting from any one auto accident.
3. That part of the limit of liability shown in the Declarations for each accident for Property Damage Liability that does not exceed the minimum limits required by the financial responsibility law of the state in which "your covered auto" is principally garaged is our maximum limit of liability for all "property damage" resulting from any one auto accident.
This is the most we will pay regardless of the number of:
1. "Insureds";
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the auto accident.
This paragraph (B.) will not change our limit of liability.
C. No one will be entitled to receive duplicate payments for the same elements of loss under this coverage and:
1. Part B or Part C of this Policy; or
2. Any Underinsured Motorists Coverage provided by this Policy.

Analysis

Section B is unique to the PP 90 01 and states that if liability coverage is payable on behalf of someone other than the named insured or a family member, the limit of liability for bodily injury will be the state financial responsibility minimum limit.

For example, the insured loans the vehicle to a friend who has an at fault accident. The maximum amount of liability coverage that will be paid is the state minimum limits, regardless of the policy's limits. This again reinforces that the PP 90 01 is a more restrictive policy than the PP 00 01 and limits recovery in certain circumstances.

This applies to bodily injury for any one person, bodily injury for any one auto accident, and property damage from any one accident, regardless of the number of insureds, claims made, vehicles involved or vehicles shown in the declarations. The section does not change the overall policy limit of liability. The policy limits as listed on the declarations are available for the insureds or family members (unless limited elsewhere in the policy); it is persons other than the insured or a family member who are restricted to minimum limits in this section.

Section C is standard policy language and states that no one is entitled to receive duplicate payments for the same element of loss under separate coverages, including under Parts B and C of the policy, and any underinsured motorists coverage provided by the policy. An insured cannot receive a payment for a loss under Part A of the policy and also make a claim for the same loss under Part B or Part C.

OUT OF STATE COVERAGE
If an auto accident to which this policy applies occurs in any state or province other than the one in which "your covered auto" is principally garaged, we will interpret your policy for that accident as follows:
A. If the state or province has:
1.A financial responsibility or similar law specifying limits of liability for "bodily injury" or "property damage" higher than the limit shown in the Declarations, or the minimum limit of the state in which "your covered auto" is principally garaged, your policy will provide the higher specified limit.
2. A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage.
B. No one will be entitled to duplicate payments for the same elements of loss.
FINANCIAL RESPONSIBILITY
When this Policy is certified as future proof of financial responsibility, this Policy shall comply with the law to the extent required.
OTHER INSURANCE
If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own, including any vehicle while used as a temporary substitute for "your covered auto", shall be excess over any other collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply in this Policy.

Analysis

The standard out of state coverage, financial responsibility, and other insurance provisions are included. If the insured has an auto accident in a state or province other than the one in which the covered auto is principally garaged, the policy will automatically provide the state's minimum limit if it is higher than that of the state in which the auto is principally garaged.

If the state has a compulsory insurance law requiring a nonresident to maintain insurance, the policy will provide the minimum amount and types of coverage required.

The financial responsibility section states that the insurance provided in the policy will act as proof of financial responsibility law compliance. If the financial responsibility law changes during a policy period and requires the insured to maintain higher limits, the policy will automatically provide the higher limits.
The other insurance section states that if there is other collectible liability insurance, the insurer will only pay its share of the loss, which is the proportion of its limit of liability to the total of all the limits available.

However, if the claim is for a vehicle not owned by an insured, including a vehicle used as a temporary substitute for the covered auto, the PP 90 01 will be excess over other collectible insurance, except insurance written specifically to be excess over the PP 90 01 policy.

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