The personal auto policy (PAP) can be written on eligible vehicles owned and leased by an individual or by a husband or wife residing in the same household. A vehicle rented to others for public use is not eligible and must be insured under a commercial policy.

Most vehicles such as cars, mini-vans, and sport utility vehicles are eligible for a personal auto policy. If vans, trucks, or other types of large vehicles are used for transportation or delivery of good and materials they typically are disqualified for a personal auto policy.

The risk exposures that must be considered when evaluating a PAP include the following:

  • Damage done to someone else's body or property
  • Medical expenses involved
  • Repair of your own vehicle in an accident
  • Accidents involving uninsured motorists
  • Temporary insurance on rental cars used while on vacation
  • Rental car reimbursement for an accident or longer term service issues

Practice Question:
Which of the following vehicles would be covered under Kevin's personal auto policy?
I. A pickup truck that he uses in his business for deliveries
II. A new car that was purchased last week
III. His son's car listed on a separate insurance policy
IV. A car rented by Kevin for the family vacation

A. I and II only
B. II and III only
C. III and IV only
D. II and IV only

Answer: D
Trucks used for business delivery are insured under commercial vehicle policies. Since Kevin's son has a separate insurance policy, he would not be covered under Kevin's personal auto policy.
Risk Exposure from Liability

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