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2. PP
3. PP-03-20

Form PP 03 20: Miscellaneous Type Vehicle Endorsement

The PP 03 20 Miscellaneous Type Vehicle Endorsement is designed to modify the standard Personal Auto Policy (PP 00 01) to provide coverage for miscellaneous type vehicles that are not automatically covered. Its primary purpose is to schedule and describe these specific vehicles, outlining the applicable coverages, limits of liability, and premiums for each. This allows individuals to insure vehicles like motorcycles, motor homes, all-terrain vehicles (ATVs), golf carts, and snowmobiles under their existing personal auto policy, rather than needing a separate specialty policy. The endorsement tailors the PAP's definitions and exclusions to appropriately cover the unique risks associated with these types of vehicles.

Classes of Business It Applies To

This endorsement is exclusively for personal lines insurance. It's used when an individual or family owns miscellaneous type vehicles in addition to their private passenger autos. Real-world examples include:

• A family that owns a motor home for vacations and wants to insure it alongside their cars.
• An individual who owns a motorcycle for recreational use.
• Someone with an ATV or snowmobile used for off-road recreation.
• A resident in a planned community who uses a golf cart for local transportation.

It is important to note that this endorsement is generally not intended for vehicles used for business purposes, though some incidental use might be permissible depending on the insurer's specific underwriting guidelines and the nature of the use.

Special Considerations

There are several important considerations when using the PP 03 20 endorsement:

• Vehicle Eligibility: Not all miscellaneous vehicles are automatically eligible; they must be of a type listed in the endorsement or acceptable to the insurer. The endorsement typically redefines "your covered auto" to include the scheduled miscellaneous type vehicles.
• Coverage Scope: The endorsement allows for the selection of various coverages, such as liability, medical payments, uninsured motorists, collision, and other than collision, for the scheduled vehicles. The specific coverages and limits must be detailed in the schedule.
• Passenger Hazard Exclusion: For some miscellaneous vehicles, particularly motorcycles and snowmobiles, there may be an option to exclude or limit coverage for passengers (passenger hazard exclusion). This should be clearly indicated on the schedule if applicable.
• Newly Acquired Vehicles: The standard PAP provisions for newly acquired autos are modified by this endorsement. Typically, for a newly acquired miscellaneous type vehicle to be covered, it must be of the same type as one already scheduled, and the insurer must be notified within a specific timeframe (often 14 days).
• Physical Damage (Part D): The limit of liability for physical damage to a scheduled miscellaneous vehicle is usually the lesser of the amount shown in the schedule, the actual cash value, or the amount necessary to repair or replace the property. Certain items, like clothing, luggage, or business equipment, might be excluded under the physical damage coverage for these vehicles.
• Standalone Policies: While this endorsement offers a convenient way to cover miscellaneous vehicles, a standalone specialty vehicle policy might sometimes provide broader or more tailored coverage. It's crucial to compare the coverage provided by the endorsement versus a specialized policy.
• Off-Road Use: The PAP typically excludes vehicles designed mainly for use off public roads. This endorsement modifies that exclusion for the scheduled vehicles.
• Rental: Coverage may be excluded if the miscellaneous vehicle is rented or leased to others.

Key Information for Agents and Underwriters

Agents and underwriters should pay close attention to the following when dealing with the PP 03 20:

• Accurate Scheduling: Ensure each miscellaneous vehicle is accurately described in the schedule, including its type, VIN, and the desired coverages and limits. The premium for each coverage on each vehicle must also be clearly stated.
• Risk Assessment: The unique risks associated with each type of miscellaneous vehicle need careful consideration. For example, motorcycles and ATVs have different risk profiles than motor homes or golf carts. Underwriters will assess factors like operator experience, driving records, intended use (e.g., on-road vs. off-road, frequency of use), and storage.
• Coverage Gaps: Be aware of potential coverage gaps. For instance, custom equipment on these vehicles might have limited coverage unless specifically addressed. While the PP 03 20 adapts the PAP, it doesn't necessarily provide all the specialized coverages found in a standalone policy (e.g., trip interruption for motor homes, or specialized equipment coverage for ATVs).
• Pricing: Rating for miscellaneous vehicles often involves applying a percentage of the private passenger base rate for liability, medical payments, and uninsured motorists coverages, though state-specific rules may apply. The passenger hazard exclusion, if selected, typically results in a premium reduction.
• Comparison to Specialty Policies: Agents should be prepared to discuss the pros and cons of using this endorsement versus purchasing a separate specialty policy, especially for high-value vehicles or those with unique usage patterns.
• Exclusion Review: Underwriters should carefully review the standard PAP exclusions and how they are modified or supplemented by the PP 03 20. For example, the endorsement typically deletes the PAP exclusion for vehicles with fewer than four wheels with respect to the scheduled miscellaneous vehicle.
• State Variations: While the PP 03 20 is a standard ISO form, state-specific rules or endorsements could modify its application or the available coverages.

In essence, the PP 03 20 provides a flexible mechanism to extend Personal Auto Policy coverage to a variety of recreational and utility vehicles, but it requires careful attention to detail in scheduling, risk assessment, and ensuring the coverage adequately meets the insured's needs.