The Personal Auto Policy (PAP) is the most common insurance contract in the country, and it shows up heavily on the exam. It bundles several distinct coverages into one organized package, each labeled with a letter (Parts A through F). This guide walks you through who and what is covered, the four main coverage parts, eligible vehicles, and the exclusions that trip people up.

The big picture of the PAP

The Personal Auto Policy is a package designed for individuals and families to insure private passenger vehicles. Its genius is organization: instead of one giant block of text, it splits coverage into lettered parts so you always know which coverage you're dealing with.

• Part A — Liability Coverage
• Part B — Medical Payments Coverage
• Part C — Uninsured/Underinsured Motorists Coverage
• Part D — Coverage for Damage to Your Auto
• Part E — Duties After an Accident or Loss
• Part F — General Provisions

You apply for and select limits on Parts A through D; Parts E and F are the rules and conditions. Let's go through the four coverage parts in detail.

Who is an insured?

Before the coverages make sense, you need to know who the policy protects. The PAP defines an insured differently depending on the coverage, but generally includes:

• The named insured (the person listed on the declarations page) and their spouse if a resident of the same household.
• Family members — people related by blood, marriage, or adoption who live in the household (this includes a foster child or a child away at school).
• Any person using the covered auto with permission.
• For liability, any person or organization legally responsible for the acts of a covered person while using the covered auto.

Eligible vehicles

Not every vehicle qualifies for a PAP. To be eligible, a vehicle generally must be a private passenger auto, pickup, or van owned by an individual or spouses/family members and not used primarily for business (delivery is a common disqualifier). The policy covers:

• Your covered auto — vehicles shown on the declarations page.
• Newly acquired autos — cars you buy during the policy period (you usually must notify the insurer within a set time to keep coverage).
• Trailers you own.
• Temporary substitute vehicles — a car you use while yours is in the shop.

Part A — Liability Coverage

Liability coverage is the heart of the policy and is mandatory in most places. It pays for bodily injury (BI) and property damage (PD) that an insured becomes legally responsible for as a result of an auto accident. It also provides a duty to defend—the insurer pays your legal defense costs, and those costs are in addition to the policy limits.

Liability limits can be written two ways:

• Split limits — three numbers like 100/300/50, meaning $100,000 BI per person, $300,000 BI per accident, and $50,000 PD per accident.
• Combined single limit (CSL) — one total amount for all BI and PD in an accident.

Key features:

• Supplementary payments — bail bonds, interest on judgments, and reasonable expenses help the defense pays on top of the limit.
• Liability follows both the car and the driver (covers you in a borrowed car, within limits).

Part B — Medical Payments Coverage

Medical Payments (Med Pay) pays reasonable medical and funeral expenses for the insured and passengers injured in an auto accident, regardless of fault. It's a no-fault, goodwill coverage that pays quickly for things like ambulance rides and ER visits.

• Covers the named insured and family members while occupying any auto or when struck by a vehicle as a pedestrian.
• Covers other passengers while occupying your covered auto.
• Expenses must usually be incurred within a set time after the accident (often three years).

Part C — Uninsured/Underinsured Motorists Coverage

Uninsured Motorists (UM) coverage pays for bodily injury to you and your passengers caused by a driver who has no insurance or who is a hit-and-run driver. Underinsured Motorists (UIM) coverage steps in when the at-fault driver has insurance, but not enough to cover your injuries.

• UM/UIM protects the innocent insured when the at-fault party can't pay.
• It generally covers bodily injury; property damage coverage under UM is available in some places but not everywhere.
• The at-fault driver must be legally responsible for the injury.

Think of Part C as the coverage that fills the gap left by irresponsible or underinsured drivers.

Part D — Coverage for Damage to Your Auto

This part covers physical damage to your vehicle and is split into two coverages, each typically subject to a deductible:

• Collision — pays for damage when your car collides with another object or overturns (hitting a tree, another car, or a guardrail), regardless of fault.
• Other Than Collision (OTC / Comprehensive) — pays for almost everything else: fire, theft, vandalism, falling objects, hail, flood, glass breakage, and hitting an animal.

Important details:

• Payment is based on Actual Cash Value (ACV)—replacement cost minus depreciation—not what you paid for the car.
• Transportation expenses (rental reimbursement) may be provided after a covered theft or loss.
• Hitting a deer is Other Than Collision, not collision—a classic exam favorite.

Key exclusions across the PAP

Exclusions appear in nearly every exam, so learn the big ones:

• Intentional damage caused on purpose by an insured.
• Using the vehicle as a public or livery conveyance (taxi/ride-share for hire), though carpooling is usually okay.
• Vehicles used in the auto business (mechanics, valets) for liability.
• Damage to property owned or being transported by the insured (your own property in the car).
• Racing or speed contests.
• Radar detectors, custom electronics, and stereo equipment not permanently installed (often limited or excluded under Part D).
• Using a vehicle you don't own and use regularly without it being listed (the "furnished or available for regular use" exclusion).
• Intentional acts and war/nuclear hazards.

Common exam traps

• Hitting an animal is Other Than Collision (comprehensive), not collision.
• Med Pay (Part B) pays regardless of fault; UM/UIM (Part C) requires another driver to be at fault.
• Liability defense costs are paid in addition to the limit, not subtracted from it.
• A borrowed car is covered for liability because coverage follows the driver, but physical damage may differ.
• Split limits 100/300/50 = per-person BI / per-accident BI / per-accident PD.
• The "furnished or available for regular use" exclusion blocks coverage for a non-owned car you use all the time.
• Using your car for hire (ride-share/delivery) is typically excluded without an endorsement.
• Physical damage pays ACV, so depreciation reduces the payout on older cars.

Quick recap

• The PAP organizes coverage into Parts A–F; A–D are the coverages you buy.
• Part A (Liability) pays for BI and PD you're legally responsible for and provides a duty to defend with costs on top of the limit.
• Part B (Med Pay) covers medical bills for you and passengers regardless of fault.
• Part C (UM/UIM) protects you when the at-fault driver has no or insufficient insurance.
• Part D covers your own car: Collision for impacts and Other Than Collision for fire, theft, hail, and animals—paid at ACV.
• Eligible vehicles are private passenger autos not used primarily for business; insureds include the named insured, resident spouse, and resident family members.
• Watch the big exclusions: livery/ride-share, racing, intentional acts, and regularly used non-owned cars.