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Question: State Farm is denying coverage on extra auto parts. They were in a total loss pole barn. They were for previous cars owned by the insured, as well as cars he owned and bought custom parts for. He then kept the parts for spares. 

— Indiana Subscriber

Answer: I'm looking at the ISO HO 00 03 05 11; your wording may be different, and I'm happy to take a look at your policy for you. The ISO form defines "motor vehicles" as a self-propelled land or amphibious vehicle or trailers/semi-trailers carried on, towed by or hitched for towing to a vehicle. Under property not covered, motor vehicles are listed including equipment and parts. An exception is made for portable electronic equipment that reproduces, receives or transmits audio, visual or data signals. Parts intended to be used as spare parts are still motor vehicle equipment, as are parts to vehicles the insured no longer owns. Unless the insured had them hanging in the home for decoration or they were part of a piece of art work, they are still auto parts and as such are excluded.

Auto equipment loss

Question: A question has arisen relative to snow plow blades affixed to a personal auto and the coverage aspect. If the snowplow blade is attached to the personal auto at the time it is damaged, would you consider it to be equipment of the auto and thus covered under the personal auto policy? If the blade is stored outside at the insured residence, not attached to a vehicle, would it be auto equipment or considered personal property under a homeowners policy? 

— Iowa Subscriber

Answer: The standard PAP applies to the covered auto's "equipment." The policy does not specify that the equipment be on the vehicle at the time of loss. So, while it is attached to the vehicle, it is covered under the PAP. While not attached, it should still be covered under the PAP since it is still the vehicle's equipment since its utility is limited to being used on the vehicle.

Motorized vehicles and mini-bikes


Question: We use an AAIS Homeowner and Farmowner form 2 (2.0). The definition of a motorized vehicle is a self-propelled land or amphibious vehicle regardless of method of surface contact. This does not include vehicles that are designed and used to assist the handicapped and are not required to be licensed for road use.

Our insured had a motorized mini bike 50cc stolen. It was ridden by children. We initially denied the loss under the above definition. The insured claims this bike is not and cannot be licensed for road use and thinks he should have coverage.

I think he may be right because if it cannot be licensed for road use then it is not a motorized vehicle so it would just be considered personal property.

— Wyoming Subscriber

Answer: The AAIS homeowner's form defines motorized vehicle as you have stated, a self-propelled land or amphibious vehicle regardless of method of contact; so the mini bike by definition is a motorized vehicle. Note that the exception to a motorized vehicle requires that the vehicle be designed to assist the handicapped AND not required to be licensed for road use; both criteria are necessary for a vehicle to fit the exception. The mini bike does not fit the exception.

A motor vehicle is then defined as a motorized vehicle (self-propelled land/amphibious vehicle) if it is: subject to motor vehicle registration OR designed for use on public roads; this is an either or situation. If the mini bike is designed for use on public roads, even it if doesn't have to be registered, it's a motor vehicle.

Coverage C excludes motorized vehicles, with an exception for motorized vehicles (self-propelled land/amphibious vehicle) not subject to registration AND used to assist the handicapped OR only to service the residence premises. So if the mini bike, which is a motorized vehicle, is used to service the residence premises or assist the handicapped, and is not required to be registered, there is coverage. However, if the mini bike is just for fun for the kids, there is no coverage since it's a motorized vehicle.

The farm policy has the same definition of motorized vehicle and the same exclusion although the language is slightly different; the intent is the same.

Stored winter tires

Question: I have a coverage question under the personal auto policy.

Our insured stores winter tires in his garage for a covered vehicle under the policy.  His intent of course would be to put the winter tires on the covered auto each winter season. A fire to the garage/home destroys the auto and the winter tires. Under Erie's Family Auto Policy, Ed. 4/97, the Insuring Agreement states:

"We will pay for loss to an auto we insure and its equipment….."

We do not define "equipment" in the policy.

Would the winter tires be considered "equipment" of the covered auto? We believe they would be and hence should be covered.

— Ohio Subscriber

Answer: We agree that the winter tires would be considered equipment of the covered auto. Construing similar auto policies where the term is undefined, courts have defined "equipment" as used in the phrase "automobile, and its equipment," to mean "any item, article, piece, part, accessory or addition installed or attached in, on, or to an automobile whether such installation or attachment be made at the time of the manufacture of such automobile or by the owner at a subsequent time."

The tires serve a critical function in the operation of the vehicle and there is little room for argument that the tires, when in use, are attached to the vehicle. And unless the policy specifically states that the equipment actually has to be on the covered auto at the time of loss, it makes no difference that the tires were in the garage when they were damaged. So long as the insured can show that these tires can or will be used on the insured vehicle, they should be covered as equipment.

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