Summary: Words and terms that have a contractually defined meaning that applies throughout the personal auto policy (PAP) are collected in one section captioned “Definitions.” There are ten such defined words or phrases, A through K, with subparts. Each is quoted, and where appropriate, commented on below.
Insured, Insurer, and Leased Autos as Owned Autos
A. Throughout this policy, “you” and “your” refer to:
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.
B. ”We,” “us” and “our” refer to the Company providing this insurance.
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:
1. Under a written agreement to that person; and
2. For a continuous period of at least 6 months.
This brief, preliminary section of the PAP applies to all parts of the policy. It explains that throughout the policy “you” and “your” refer to the named insured and 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 the status. This limitation on named insured status has the PAP simply reflecting the fact that people get divorced or separate. The spouse who has moved out of the named insured's household is an individual and must take responsibility for his or her own insurance needs.
“We,” “us,” and “our” refer to the insurance company (the insurer).
The status of an owned auto is extended to leased autos under certain circumstances; namely, the private passenger auto, pickup, or van must be leased under a written agreement (no handshake deals or merely verbal agreements) for a continuous period (no interruptions in the leasing period) of at least six months.
Bodily Injury, Business
D. ”Bodily injury” means bodily harm, sickness or disease, including death that results.
E. ”Business” includes trade, profession or occupation.
Family Member
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.
Analysis
This term is defined as a person related to the named insured (or spouse) by blood, marriage or adoption, and requires residing in the named insured's household. This definition gets its importance within the context of “insured”, as that term is defined in the particular coverage parts of the policy. Incidentally, the term “covered person”, of earlier PAP editions, has been replaced by the term “insured”. Wherever the term “insured” appears in the policy, however, it appears with no change in meaning.
Occupying, Property Damage, Trailer
G. ”Occupying” means in, upon, getting in, on, out or off.
H. ”Property damage” means physical injury to, destruction of or loss of use of tangible property.
I. ”Trailer” means a vehicle designed to be pulled by a:
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.
Analysis
Property damage is defined as physical injury to, destruction of, or loss of use of tangible property. An example of loss of use of tangible property is if the insured were to crash into a cab making it incapable of driving. The loss of earnings of the cab driver is covered as property damage under the insured's personal auto policy.
The meaning of “trailer” is a vehicle designed to be pulled by a private passenger auto or a pickup or van. The definition includes a farm wagon or farm implement, but only while being towed by a private passenger auto or a pickup or van. The definition is clearly broad enough to include a “fifth wheel” or “gooseneck” trailer designed to be pulled by a pickup truck.
Your Covered Auto
J. ”Your covered auto” means:
1. Any vehicle shown in the Declarations
2. A “newly acquired auto”.
3. Any “trailer” you own
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: (a) breakdown; (b) repair; (c) servicing; (d) loss; or (e) destruction.
This provision (J.4.) does not apply to Coverage for Damage to Your Auto.
Analysis
This term is defined due to the fact that the PAP differentiates between the named insured's “covered auto” and other autos. For example, the named insured and family members are insureds for the use of any auto; other people are insureds while using the named insured's “covered auto”. Also, the physical damage coverage under the PAP is for direct and accidental loss to the named insured's “covered auto”. So, the insured needs to recognize the difference between a “covered auto” and just an “auto” in order to recognize when coverage applies.
The definition of “covered auto” is fairly well straightforward. The current PAP does have a new term—newly acquired auto—listed in this definition and that is explained next.
Newly Acquired Auto
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:
a. a private passenger auto; or
b. a pickup of van, for which no other insurance policy provides coverage, that:
(1) has a Gross Vehicle Weight of less than 10,000 lbs.; and
(2) is not used for the delivery or transportation of goods and materials unless such use is: (a) incidental to your “business” of installing, maintaining or repairing furnishings or equipment; or (b) for farming or ranching.
2. Coverage for a “newly acquired auto” is provided as described below. If you ask us to insured a “newly acquired auto” after a specified time period described below has elapsed, any coverage we provide for a “newly acquired auto” will begin at the time you request the coverage.
a. For any coverage provided in this policy except 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. Coverage begins on the date you become the owner. However, for this coverage to apply to a “newly acquired auto” which is in addition to any vehicle shown in the Declarations, you must ask us to insure it within 14 days after you become the owner.
If a “newly acquired auto” replaces a vehicle shown in the Declarations, coverage is provided for this vehicle without your having to ask us to insure it.
b. 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 insured it within:
(1) 14 days after you become the owner if the Declarations indicate 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 do not indicate that Collision Coverage applies to at least one auto. If you comply with the 4 day requirement and a loss occurred before you asked us to insure the “newly acquired auto”, a Collision deductible of $500 will apply.
c. 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:
(1) 14 days after you become the owner if the Declarations indicate that Other Than 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 do not indicate that Other Than Collision Coverage applies to at least one auto. If you comply with the 4 day requirement and a loss occurred before you ask us to insured the “newly acquired auto”, an Other Than Collision deductible of $500 will apply.
Analysis
An auto newly acquired by the named insured is considered a “covered auto” under the terms of the PAP. However, for an auto to be deemed “newly acquired”, there are several points to consider.
First, the named insured has to become the owner during the policy period. If the named insured owns the auto prior to policy inception, he or she must have that auto shown in the declarations for it to be considered as a covered auto.
Second, the types of vehicles are specifically described. A private passenger auto is listed; and, pickups and vans are listed, but with limitations. The pickups and vans have to have no other insurance providing coverage for them; the gross vehicle weight has to be less than 10,000 pounds; and they can not be used for the delivery or transportation of goods and materials. This last item is modified to enable certain insureds, such as electricians and plumbers, to carry their tools and work materials in their vans and pickups and still have their auto exposures covered under the personal auto policy.
Third, the coverage for the newly acquired autos is specifically described.
When it comes to coverages other than physical damage coverage—such as liability or med pay—the PAP declares that the newly acquired auto has the broadest coverage that is already provided by the PAP and that this broad coverage begins on the date that the named insured becomes the owner of the newly acquired auto. If the newly acquired auto replaces a vehicle shown in the declarations, the broad coverage is provided without the named insured's having to ask for it. However, if the newly acquired auto is in addition to any vehicle shown in the declarations, the named insured has to ask the insurer to provide the coverage within 14 days after becoming the owner. In this last situation, the named insured has coverage for at least the 14 days, but after that, the newly acquired auto no longer has the coverage provided by the PAP.
As for physical damage coverage for newly acquired autos, the PAP divides that into collision and other than collision categories. And, in order for the coverage to apply, the PAP requires the named insured to notify the insurer of the newly acquired autos and ask for the physical damage coverages. For collision coverage, the named insured has to ask for insurance within 14 days after he or she becomes the owner as long as there is at least one car shown in the declarations as having collision coverage. If there is no car with collision coverage listed, the named insured has to ask for collision coverage within 4 days of becoming the owner of the newly acquired auto. The provisions for other than collision coverage are the same. Basically, the insurer is telling the insured that he or she can have physical damage coverage for the newly acquired auto, but it has to be requested within definite time limits.