Federal Employees Using Autos in Government Business

PP 03 01 08 86

A common situation is that a person employed by the federal government—a rural mail carrier, for example—will use his or her own vehicle in the course of employment. The PAP states that an “insured” includes any “person or organization … with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part” [A]. Attaching this endorsement eliminates coverage for the federal government; the federal government self-insures. Likewise, any other person driving the covered auto on government business has no liability coverage, but only if Section 2679 of Title 28, the U.S. Code as amended, requires the Attorney General to provide a defense.

Optional Limits Transportation
Expenses Coverage

PP 03 02 06 98

The transportation expenses coverage provided under part D of the personal auto policy is for $20 per day, to a maximum of $600, for temporary transportation expenses incurred by the named insured in the event of a loss covered under coverage D to a covered auto. This endorsement increases those amounts to the limits shown in the schedule of the endorsement.

Towing and Labor Costs Coverage

PP 03 03 04 86

The insurer agrees through the use of PP 03 03 to pay for towing and labor costs incurred each time the covered auto or any nonowned auto is disabled. The disablement can be for any reason and the amount paid under PP 03 03 is the amount scheduled on the endorsement. The insurer declares that it will only pay for labor performed at the place of disablement; repair work at the garage after the car has been towed there is not covered by PP 03 03.

Extended Nonowned Coverage
for Named Individual – Vehicles Furnished or Available for Regular Use

PP 03 06 01 05

This endorsement has been retitled with the 2005 edition of the PAP. Previously, it was simply the “extended nonowned coverage for named individual.” The addition of “vehicles furnished or available for regular use” distinguishes it from the new endorsement that can be used to cover the liability exposure of a vehicle used as a livery conveyance.

For more information, see Extended Nonowned Coverage .

Trailer/Camper Body Coverage (Maximum Limit of Liability)

PP 03 07 01 05

Exclusion 7. of part D under the PAP is deleted through the use of this endorsement; exclusion 8. deals with loss to trailers, camper bodies, motor homes, and facilities or equipment used with such items. PP 03 07 provides coverage for direct and accidental loss to a trailer or camper body described in the endorsement and to facilities or equipment designed to be used with the described trailer or camper body; the facilities and equipment, such as cooking, dining, or sleeping equipment, have to be in or attached to the trailer or camper body. PP 03 07 does not apply to loss to clothing or luggage, business or office equipment, or to articles that are sales samples or that are used in exhibitions.

Coverage for Damage to Your Auto

PP 03 08 06 94

The limit of liability provision in part D of the PAP is replaced through the use of this endorsement. PP 03 08 limits liability for a loss to an auto scheduled on the endorsement to the lesser of the amount shown in the schedule of PP 03 08, the actual cash value (ACV) of the stolen or damaged property, or the amount necessary to repair or replace the property with other property of like kind and quality. This endorsement keeps the language about adjusting the actual cash value loss for depreciation and physical condition and about not paying for betterment that appears on the PAP, but the language referring to “the amount shown in the schedule” allows the insurer to pay an amount for a loss to a covered auto that may be even less than actual cash value.

The coverage is sometimes referred to as “stated amount”; the endorsement, however, makes it clear that this is not the case. Although the endorsement might be used for older vehicles in mint condition, it probably should not be used for antique or classic cars having considerable value.

Single Liability Limit

PP 03 09 01 05

This endorsement modifies paragraph A of the limit of liability provision in the personal auto policy. The limit for liability coverage is scheduled through the use of PP 03 09 on an each accident basis. This scheduled limit is the maximum limit of liability for all damages resulting from any one auto accident, and is the most the insurer will pay regardless of the number of insureds, claims made, or vehicles involved in the auto accident.

Excess Electronic Equipment Coverage

PP 03 13 01 05

The 2005 PAP, under coverage D damage to your auto, provides $1,000 of coverage for electronic equipment that reproduces, receives or transmits audio, visual or data signals, and which is not installed in a location normally used by the auto manufacturer to install such equipment. (There is no limit for equipment, including aftermarket equipment, installed in the location used by the auto manufacturer.) Additional coverage beyond the $1,000 may be purchased by attaching this endorsement. Equipment could include CD players, navigational systems, telephones, or any other device used to transmit or receive audio, visual, or data signals.

If an insured wishes to cover the tapes, records, disks or other media used with the equipment, this endorsement provides $200 worth of coverage. The insured may also use this endorsement to provide $200 worth of coverage for media used with the factory-installed equipment. A common misconception is that CDs, tapes, etc. are covered under the homeowners policy; if used with factory-installed or other permanently-installed equipment they are not covered. It is only when the tapes, CDs, etc., are used with equipment (such as a portable CD or DVD player) that is capable of being operated both by a vehicle's power source and another power source that a homeowners policy provides some coverage.

Customizing Equipment Coverage

PP 03 18 01 05

This endorsement deletes exclusion 10. of part D of the PAP. This exclusion precludes coverage for loss to custom furnishings or equipment in or upon any pickup or van. PP 03 18 offers coverage for direct and accidental loss to custom furnishings or equipment for vehicles that are scheduled on the endorsement, and this includes furnishings such as special carpeting, insulation, furniture or bars, height-extending roofs, and custom murals or decals. The endorsement does not mimic exclusion 10. by referring only to pickups and vans; any vehicle described in the schedule of PP 03 18 has coverage for customizing equipment. Pickups that have caps, covers, or bedliners need not have these scheduled on this endorsement, since these items are exempt from exclusion 10 for pickups.

Snowmobile Endorsement

PP 03 20 01 05

See Snowmobile Endorsement .

Limited Mexico Coverage

PP 03 21 01 05

This endorsement gives the insured several warnings up front. First, auto accidents in Mexico are subject to the laws of Mexico, not the laws of the United States; under Mexican law, auto accidents are considered a criminal offense as well as a civil matter. Second, the coverage provided by the endorsement does not meet Mexican auto insurance requirements. Third, the named insured is required to purchase liability insurance through a licensed Mexican insurance company for the provisions of PP 03 21 to apply. (Insurance is usually available at the U.S.-Mexican border.)

Endorsement PP 03 21 offers liability, med pay, uninsured motorists, damage to your auto, and no-fault coverages (depending on which coverages the insured has under his or her personal auto policy) for accidents and losses that occur in Mexico within 25 miles of the U.S. border. The coverages only apply while an insured is in Mexico on a trip of 10 days or less. The insurer promises to defend the insured under liability coverage only if the original suit for damages is brought in the United States, and if the suit does not involve a Mexican citizen or resident. Additionally, the insurer will not pay for auto repairs to the named insured's covered auto if the repairs are made in Mexico unless the covered auto cannot be driven in its damaged condition.

The insurance provided by PP 03 21 is excess over any other collectible insurance.

Named Nonowner Coverage

PP 03 22 01 05

See Named Nonowner Coverage for more information.

Miscellaneous Type Vehicle Endorsement

PP 03 23 01 05

See [IDL:Miscellaneous Type Vehicle Endorsement] .

Participating Coverage for Damage
to Your Auto

PP 03 24 06 94

This endorsement, which revised the insuring agreement of part D of the PAP, has been withdrawn for use with the 2005 PAP.

Joint Ownership Coverage

PP 03 34 01 05

PP 03 34, joint ownership coverage, is an endorsement meant to address the issue of coverage for individuals who are not married but who reside together and have joint ownership of a vehicle(s). The personal auto policy states that “you” and “your” refer to the named insured and the spouse if a resident of the same household. PP 03 34 modifies this so that “you” and “your” refer to two or more individuals, “other than husband and wife“, residing in the same household, or non-resident relatives who jointly own a private passenger auto, pickup, or van; the emphasis here is on the joint ownership of the covered auto, regardless of the relationship that exists between the joint owners.

This endorsement adds a definition and an exclusion to the personal auto policy. The added definition concerns “non-resident relatives”; this term means two or more persons related by blood, marriage, or adoption (including a ward or foster child) who reside in separate households. An example of this would be a father and daughter who live in separate households, but who jointly own an auto for whatever reason. The exclusion is added to part A, the liability coverage, of the PAP and states that liability coverage is not provided for the ownership, maintenance, or use of any vehicle, other than “your covered auto”, by any non-resident relative or family member of a non-resident relative; this simply reinforces the fact that the insurer, based on both premium considerations and unforeseen risk exposures, does not want to insure any auto that is not included within the definition of “your covered auto”. However, the 2005 endorsement allows the insured to “buy back” coverage for the excluded nonowned auto liability exposure. In the example of the father and daughter, above, suppose the daughter was married. The daughter, by means of the PP 03 34, is covered as an insured for her use of any auto. Her husband is also an insured, but only for his use of the covered auto. When coverage for the nonowned auto exposure is indicated on the endorsement, however, the husband will also be covered for his use of any auto.

The PP 03 34 includes a schedule for the description of the jointly owned vehicle(s) and a schedule listing the coverages, limits of liability, and premiums applying to each described vehicle.

Auto Loan/Lease Coverage

PP 03 39 09 93

The auto loan/lease coverage endorsement, PP 03 35, is an endorsement meant to address a potential gap in coverage that many insureds might face. In fact, the endorsement is sometimes referred to as “gap coverage.” For example, if an insured was leasing a vehicle and suffered a total loss to the auto through a collision, that insured would be liable to the leasing company for any amount equal to the difference between the amount due under the lease and the actual cash value of the auto at the time of the loss (the limit of liability under part D of the PAP). PP 03 35 states that, in the event of such a total loss, the insurer will pay any unpaid amount due on the lease for the covered auto less certain specified items.

Another case where this endorsement would be used involves a total loss similar to the example above, but this time involving a new car that the insured has bought through the use of time payments. In this situation, if the amount due under the finance agreement is greater than the ACV of the auto at the time of loss, the insured has the obligation to pay that amount. PP 03 35 offers the insured coverage for such an amount, less, as in the lease situation above, the amount paid under part D of the PAP, any overdue loan payments, or costs for extended warranties. When a lease is involved, the list of specified items also includes any overdue lease payments at the time of loss, financial penalties imposed under the lease for excessive use or abnormal wear and tear, security deposits not refunded by a lessor, or life or health insurance purchased with the lease, and carry-over balances from previous leases.

Endorsement PP 03 35 basically stands as a tool by which the insured can protect himself from a financial loss that he might not realize could face him in the event of the total loss of an auto that is leased or financed. The outstanding indebtedness of the insured is paid and the leasing or financing company is satisfied through the use of this particular endorsement.

This endorsement also includes a schedule to describe the covered auto(s) and to list the premiums that are charged for collision coverage and other than collision coverage.

Exclusion—Coverage for Damage
to Your Auto

PP 13 01 12 99

This endorsement adds an exclusion to the physical damage coverage section (part D) of the PAP; the endorsement is not approved in all jurisdictions. PP 13 01 states that the insurer will not pay for loss to the covered auto or any nonowned auto due to diminution in value.

The reasoning behind this endorsement is this: an insured, after being involved in auto accident, claims that his auto is not worth what it was prior to the accident even if repaired promptly and professionally. The auto has suffered a loss in value because of the accident and that is a “loss” that is covered under the insuring agreement; besides, such coverage would put the insured in the position he was prior to the loss and that is the purpose of the insurance policy. The insurer is using this endorsement to make the point that part D coverage is for “direct and accidental loss” and that means only actual physical damage to the covered auto and not a loss in value. Since some courts may agree with the insured's interpretation of the meaning of “loss”, and since the PAP had no exclusion that addressed the issue, PP 13 01 was written; a diminution in value loss is now specifically excluded.

The endorsement defines “diminution in value” as “the actual or perceived loss in market or resale value which results from a direct and accidental loss”. Therefore, whether the insured merely believes his car has lost value or has a licensed body shop make a written statement that the covered auto has suffered a certain loss in value due to an accident, PP 13 01 excludes such a loss from coverage.

Trip Interruption Coverage

PP 13 02 01 05

This endorsement is new with the 2005 PAP. It provides coverage for extra expenses incurred by the insured when a covered physical damage loss, or mechanical or electrical breakdown, occurs more than 100 miles away from the insured's home, and the covered vehicle is withdrawn from use at least twenty-four hours. The endorsement provides up to $600 for transportation expenses (not defined) and lodging and meals.

Endorsement PP 03 02 optional limits transportation expenses coverage adds higher limits of transportation expenses coverage to the $20 per day/$600 maximum policy limit; PP 03 03 towing and labor costs provides limits of $25, $50, or $75; endorsement PP 13 02 gives an extra layer of protection by including lodging and meals expenses when a covered loss occurs away from home. For example, if the insured vehicle's engine seizes up over 100 miles from the insured's home, necessitating towing, a rental car, meals, and an overnight stay in a motel, coverage D transportation expenses coverage will not respond because it appears that no covered loss occurred (of course, it could be determined later that a rock damaged the oil pan, but in the meantime the insured is still without transportation). If the insured has PP 03 03 and PP 13 02, towing to a garage and the overnight expenses as well as rental reimbursement should be covered.

Trust Endorsement

PP 13 03 01 05

This endorsement is new with the 2005 PAP. Previously, PP 03 33 certificate of insurance – trusts was issued, which stated that vehicles owned jointly by the named insured and spouse and a trust were covered under Part A – Liability coverage. However, in most instances vehicles are not jointly owned because title has been transferred to the trust. This endorsement amends the definitions so that a “private passenger type auto, pickup or van shall be deemed to be owned by a person if title is transferred to the trust shown in the Schedule or in the Declarations.” If the trustee is other than the named insured, that individual must be shown in the endorsement schedule. Should the policy terminate, the trustee will receive notice.

Extended Nonowned Coverage – Vehicles Furnished or Available for Use as Public or Livery Conveyances

PP 13 05 01 05

This endorsement, new with the 2005 edition of the PAP, provides coverage for a regularly furnished vehicle that is used as a livery or public conveyance. Current endorsement PP 03 06 01 05 does not delete the exclusion of coverage under the PAP for a regularly furnished auto while it is being used as a livery or public conveyance; the PP 13 05 01 05 fills this gap.

For more information, see Extended Nonowned Coverage .