Personal Auto Insurance (PAP)

What's on this Page

• Overview
  • Different From Commercial Auto Insurance
  • Common Coverage Limitations and Exclusions

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Read next: Workers Compensation and Employers Liability Insurance

Overview

Different From Commercial Auto Insurance

• The named insured is always an individual, not a business entity.
• With most companies, the maximum limit is $500,000 per accident (or $250/$500/$100: $250,000 for injury to any one person; $500,000 maximum bodily injury for all person injured in an accident; $100,000 property damage).
• Excess limits can be purchased on a personal excess or umbrella policy.
• Large trucks are usually not eligible for coverage.
• Most auto policies are issued by direct writer insurers: Farmers, State Farm, GEICO, Allstate, Mercury, Progressive, etc.)  These insurers use their own proprietary forms instead of the ISO PAP and vary in coverage restrictions.
• The definition of “insured” varies by carrier, but most cover the named insured and resident spouse, resident relatives, other permissive users, and persons or organizations that are legally  responsibility for acts or omissions of insureds.  The last category would include us if our contractor or consultant were using a covered vehicle while providing services to us.

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Common Coverage Limitations and Exclusions

• Non-owned auto liability is not available.  Example: If our consultant (a sole proprietor with a personal auto policy) uses a sub-consultant who drives on our behalf, our consultant has no insurance for the sub-consultant’s accidents.  Out consultant would have coverage for that with commercial non-owned auto liability insurance.
• No coverage for using vehicles as taxis, limousines or commercial delivery vehicles.  This eliminates coverage for Uber, Lyft  and other Transportation Network Companies (TNC) drivers.  Some insurers may offer endorsements to add coverage.  The California Public Utilities Code Sec. 5433 (PDF: 65 kB) requires TNCs to provide primary coverage for their drivers.

• A few insurers have drop-down limits.  If the liability limits are 100/300/50, those limits may apply only for the named insured, resident relatives and listed drivers.  Other insureds (permissive users not scheduled on the policy and vicariously liable entities [us!]) may be entitled only to California’s statutory limits of 15/30/5.
• A few insurers eliminate coverage or reduce limits for undeclared business use.

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