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Introduction The information presented herein is merely a brief summary of the most commonly selected auto coverages available; for full details see your policy: Click Here To View All Available Tx Personal Auto Policy & Optional Coverage Endorsement Forms Click Here To View Glossary of Auto Insurance Terms Auto insurance pays for damages, injuries, and other losses that are detailed in your policy. Depending on the type of coverage, auto insurance can either pay for your damages or another driver’s damages, or a passengers damages. LIABILITY pays for damage caused by you to another person or another person's vehicle or other property as a result of an automobile accident. Types of liability coverage include:
PHYSICAL DAMAGE pays for a loss resulting from damage to your vehicle or a vehicle operated by you. Physical damage also provides coverage if your vehicle is stolen. Types of physical damage coverage include:
OTHER COVERAGE Other types of auto coverage include:
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Texas Personal Auto Policy Casualty Coverage Comparison
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Specimen Personal Auto Policy & Texas Auto Endorsement Forms
Personal Auto Policy Forms
PP 00 01 - Personal Auto Policy |
PP 13 66 - Named Driver Exclusion -Texas |
| PP 01 50 - Amendment of Policy Provisions - Texas | PP N 004 - Named Driver Exclusion Acknowledgment - Texas |
| PP 13 91 - Named Nonowner Coverage - | PP 05 98 - Personal Injury Protection Coverage - Texas |
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Texas Auto Endorsement Forms: (Note :These endorsements are used to increase , add, change, delete, or reduce coverage of homeowners policy forms )
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| 500. Single Liability Limit |
541. Cancellation Provision or Coverage ChangeProvides for advance notice of cancellation or material change in the policy to the person or organization named in the endorsement for the number of days specified in the endorsement. |
| 501. Split Liability Limit |
542. Suspension of InsurancePermits suspension of specified coverages on a specific auto(s), and a refund of premium if the suspension is for at least 30 consecutive days. Coverage is activated while the auto is undergoing maintenance or testing. Coverage is reinstated by using endorsement 543. |
| 502. Uninsured/Underinsured etc. |
543. Reinstatement of InsuranceReinstates coverage that has been suspended under endorsement 542. |
503. UM etc. |
544. Texas Automobile Insurance Plan Association - Amendment of Termination ProvisionUsed on policies assigned through the Texas Automobile Insurance Plan. Deletes the PAP "Termination" provision and substitutes other provisions consistent with involuntary issuance. Permits cancellation by the insurer with 10 days' notice only for 5 specific reasons.
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504. Increased Limits Other Than Designated DriverProvides higher limits of liability except when the auto is operated by a driver (male under 25 or female under 21) designated in the endorsement. The policy is issued at low limits, and premium is charged for the difference between the limits at the appropriate classification without the young driver. |
545. Group Marketing of Auto Insurance - Termination ProvisionsUsed on policies issued under a group marketing plan as described in Rule #2 of the Texas Automobile Rules and Rating Manual. Deletes the PAP "Termination" provision and substitutes other provisions consistent with group insurance. Permits cancellation by the insurer with 10 days' notice only for three specific reasons. |
| 505. Mile-Based Rating Plan Endorsement |
550. Mexico Coverage BroadFor an additional premium, extends the policy territory into Mexico within 25 miles of the U.S. border, with no time limitation. The PAP with this endorsement is still not recognized as valid liability insurance by Mexican authorities. Travelers into Mexico should always consider purchasing protection from a Mexican insurance company before crossing the border. This endorsement is sufficient for the physical damage exposure for accidents within the mileage limitation of the endorsement. |
510. Additional Insured LessorProvides the following for the lessor of an auto leased to the named insured (including a replacement auto) under a written contract for a continuous period of at least six months: (1) additional insured status for liability, but only as respects damages arising out of acts or omissions of the named insured, a family member, or a permissive user; (2) physical damage loss payable to lessor and named insured, as interests may appear; (3) cancellation notice to the lessor. 5 |
551. Mexico Coverage LimitedFor no additional premium, extends the policy territory into Mexico within 25 miles of the U.S. border for trips that do not exceed 10 days at a time. The PAP with this endorsement is still not recognized as valid liability insurance by Mexican authorities. Travelers into Mexico should always consider purchasing protection from a Mexican insurance company before crossing the border. This endorsement is sufficient for the physical damage exposure for accidents within the mileage and other limitations of the endorsement.
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511. Extended Nonowned Coverage for Named IndividualModifies or eliminates several exclusions in the liability and medical payments coverages related to the use of nonowned autos by the individual named in the endorsement, including his or her spouse. Used to provide coverage for the named insured, spouse or family member in the following situations: (1) operation of a nonowned auto which is furnished or available for regular use, such as a company auto [In this case, keep in mind that the endorsement applies only to the named individual and spouse. If other household operators also operate the furnished auto, they should be separately named.]; (2) operation of a nonowned auto which is used to carry persons or property for a fee, such as a taxi driver, bus driver or delivery person; (3) operation of a nonowned commercial auto, such as a truck driver. The endorsement should not be used by any person employed in an "auto related business" as the form specifically excludes such use of nonowned autos. The coverage provided is excess over any amount available to the named individual on a policy insuring the owner of the vehicle. Coverage could be primary in the following situations: (1) there is no policy in force for the owner of the vehicle; (2) an exclusion in the owner's policy applies to the named individual, such as the fellow employee exclusion, care-custody-control exclusion, or pollution exclusion. |
552. Mexico Tourist Coverage LimitedFor no additional premium, extends the policy territory into Mexico and provides liability insurance in excess over Mexican auto liability insurance, which is a requirement of the coverage. There are no mileage or time limitations in the endorsement. Suit must be brought in the U.S. |
512. Designation of Covered Person or OrganizationProvides a means to name an additional insured on the policy and provide for notice of cancellation, but only as respects legal responsibility for acts or omissions of a person for whom liability coverage is afforded by the policy. Such a person or organization is already a "covered person" under the terms of the policy. |
560. Recreational Trailers, Mobile Homes or MotorhomesRequired when providing physical damage coverage on recreational trailers, mobile homes or motorhomes. Eliminates the transportation expense coverage (see Endorsements section). |
513. Federal Employees Government BusinessExcludes the U.S. government, any government agency, and a government employee from the definition of "covered person." When used on a policy providing coverage for an auto used on government business, this exclusion allows the auto to be rated for other than business use. |
561. Recreational Trailer, Mobile Home or Motorhome Contents CoverageAdds named perils coverage for contents in and equipment on recreational vehicles. No deductible applies to this coverage. |
514. Amphibious Automobile or Amphibious Mobile Home Trailer Excluded While Being Launched, Beached, or Used On WaterExcludes coverage for any amphibious auto while being launched, beached or used on water. |
562. Trip CollisionProvides collision insurance on mobile homes and recreational trailers for specific trips up to 30 days' duration. |
515A. Exclusion of Named Driver and Partial Rejection of CoveragesExcludes all coverage under the policy when the driver named in the endorsement is operating any auto. Also serves as a rejection of PIP and UM/UIM while the named driver is operating an auto. |
564. Modified Hail Deductible Mobile HomeProvides a $250 deductible on hail losses when hail is covered on the policy with other perils. |
515B. Exclusion of Named Driver and Partial Rejection of Coverages LimitedSame as 515A, except the exclusion does not apply if a licensed driver age 18 or over accompanies the excluded driver. |
565. Auto Death Indemnity and Total Disability CoveragesProvides for payment of a principal sum (available options are $5,000 and $10,000) for death of a named person in an auto accident, and $60 weekly indemnity for the continuous total disability of a named person, up to a maximum of 200 weeks. The death indemnity amount is doubled by endorsement 573 if the person was wearing a seat belt or protected by an air bag at the time of the accident. |
520. Coverage for Tapes, Records or Other DevicesProvides up to $200 coverage, without deductible, for tapes, records, or other devices (such as compact discs) for use with equipment designed for the reproduction of sound. Requires designation of each auto where such devices are to be covered, and a separate premium charge for each. There is no provision for automatic coverage on newly acquired or substitute autos. |
566. Waiver of SubrogationEliminates the insurers right to subrogate (as provided in the "Our Right to Recover Payment" section of the policy) against a person or organization named in the endorsement. |
521. Coverage for Sound Receiving and Transmitting EquipmentProvides comprehensive and collision coverage on radio and telephone equipment without deductible, subject to specific description in the endorsement. Full coverage applies even if the auto carrying such equipment has no physical damage coverage. Loss would be adjusted on an actual cash value basis. The basic policy provides only $1,500 coverage on these items if they are attached to the auto, subject to the deductible for comprehensive or collision. |
567. Christian Science CareAmends the phrase "necessary medical" in the Medical Payments and Personal Injury Protection sections of the policy to include services rendered by accredited Christian Science Practitioners and facilities. |
522. Coverage for Damage to Your Auto - Specified Causes of LossProvides coverage for specified causes of loss as an alternative to comprehensive coverage. Specified causes include fire, lightning, explosion, theft; sinking, burning collision or derailment of any vessel or vehicle in or upon which the auto is being transported; windstorm, hail, earthquake, flood, mischief, and vandalism (subject to a $25 deductible). |
571. Financial Responsibility Certification (SR-22 Filing)Certifies that the policy complies with financial responsibility laws and obligates the insurer to send a notice of cancellation or termination to the Texas Department of Public Safety. |
523. Rental CoverageReimburses the expense of renting a substitute auto, up to a limit specified in the endorsement, if a covered loss puts the covered auto out of service for more than 24 hours. Unlike the Coverage D supplementary payment for reimbursement of other transportation expenses such as a bus or taxi, this endorsement pays for rental only. The endorsement can also be used to provide a higher limit than that provided for theft-related claims in the Coverage D Transportation Expenses Coverage. |
573B. Supplementary Death BenefitRequired to be attached if the policy provides coverage for Personal Injury Protection, Medical Payment or Automobile Death Indemnity (endorsement 565). Pays an amount equal to the limit for the applicable coverages (in combination if more than one coverage applies) up to a maximum benefit of $10,000, if the "covered person" is killed as the result of an auto accident while wearing a seat belt or while protected by an airbag. The "trigger" of coverage is that the PAP must respond under the applicable coverage for any amount. It would be possible for more than one policy to respond for the full limit of the supplementary death benefit if the covered person were a passenger in a nonowned auto and the medical and/or funeral expenses were sufficient to reach into the PIP or Medical Payments coverage of his or her own policy after exhausting available coverage under the vehicle owner's policy. (See technical report: "Supplementary Death Benefit") |
524. Towing and Labor Costs CoverageProvides coverage for expenses incurred for towing and labor (performed at the place where the auto is disabled) when the auto is disabled for any reason. Options of $40, $80 and $120 per disablement are available. This endorsement must be attached if the insurance company does not already include it in Part D or overprint the endorsement as a part of its policy. |
578. Named Nonowner CoverageUsed when the named insured does not own an auto. Covers the named insured for liability arising out of the maintenance or use of nonowned autos and includes an auto newly acquired by the named insured during the policy period for up to 30 days after acquisition. Eliminates the exception to the care, custody and control exclusion so that the insured's legal liability for damage to a borrowed or rented auto is not covered. Eliminates the exclusions related to autos used in the insured's occupation and autos being used to carry persons or property for a fee. |
525. Foreign Made and Discontinued Makes of Autos - Limiting Coverage for Damage to Your AutoAdds an exclusion to the physical damage section, excluding expenses or losses arising from the inability to obtain stock repair parts or repair service. |
578. Named Nonowner CoverageUsed when the named insured does not own an auto. Covers the named insured for liability arising out of the maintenance or use of nonowned autos and includes an auto newly acquired by the named insured during the policy period for up to 30 days after acquisition. Eliminates the exception to the care, custody and control exclusion so that the insured's legal liability for damage to a borrowed or rented auto is not covered. Eliminates the exclusions related to autos used in the insured's occupation and autos being used to carry persons or property for a fee. |
526. Coverage for Damage to Your Auto - Optional and Limited Specified Causes of LossProvides various specific physical damage options for specified causes of loss as an alternative to comprehensive coverage. See also endorsement 522A. |
579. Named Operator Government EmployeesUsed in lieu of endorsement 578 when the named insured does not own an auto and only wants coverage while operating autos owned by governmental subdivisions. |
528. Loss Payable Clause - ModifiedProvides for payment of covered physical damage loss to the listed lienholder and the insured, as their interests may appear. Provides for continuous coverage, without regard to the expiration date until the company mails notice of cancellation at least 10 days prior to the cancellation. If the insured cancels the policy, the company must give at least 10 days' notice to the lienholder before the lienholder's coverage ends. |
583. Miscellaneous Type Vehicle EndorsementUsed to include owned miscellaneous type vehicles (defined as golfmobiles, pickup trucks used solely to transport camper bodies, motorhomes, motorcycles, motorscooters, motorbikes, all terrain vehicles and similar motor vehicles) on a PAP. Redefines certain terms in order to provide for these types of vehicles which would otherwise be excluded. The automatic coverage feature of the policy for newly acquired autos is amended to include private passenger autos, pickups and vans not used in business, and any miscellaneous vehicles of the same type already on the policy. Thus, a PAP with this endorsement covering a golfmobile would not pick up coverage on a newly acquired motorcycle, but it would automatically pick up coverage on a newly acquired private passenger auto. |
529. Special Loss Payable and Cancellation EndorsementProvides for payment of covered physical damage loss to the listed lienholder and the insured, as their interests may appear. In the event of cancellation or changes that reduce or restrict coverage, the company must mail 10 days' advance written notice to the lienholder informing it of the change. The lienholder is obligated to pay the policy premium. |
585. Motorhome Rental CoverageEliminates the PAP exclusions related to rental of the auto to others. |
530. Loss Payable ClauseProvides for payment of covered physical damage loss to the listed lienholder and the insured, as their interests may appear. The lienholder is promised the same advance notice of cancellation as is given to the insured. |
586. Antique, Collectible or Special Interest AutoPermits a lower rate for autos described in the endorsement which are used primarily for exhibitions, club activities, parades or other functions of public interest, and occasionally for other purposes. Since the endorsement does not require the insured's signature, and does not actually add an exclusion to the policy, it is doubtful that coverage could be denied if the vehicle were used other than as stated. |
531. Deductible Liability InsuranceProvides for a deductible on the liability portion of the policy, in consideration of a reduced premium. The company may pay the deductible amount and request reimbursement from the insured. |
593. Amendatory Endorsement |
540. Policy ChangeGeneral change endorsement for additions, deletions or substitutions of autos, or coverage changes. |
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Overview and Eligibility - Personal Auto Policy |
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The Texas Personal Auto Policy (PAP) was approved for use in Texas effective June 1, 1981. It replaced the Family Automobile Policy which had been in use for many years.
The PAP is written in an easy-to-read style, is a relatively short policy form, and is arranged in a logical fashion. It is characterized by the use of commonly understood words, such as "you" for the named insured and "us" for the company providing the insurance. These characteristics are common to many of our Texas policy forms today, but in 1981 they were novelties.
| The Texas PAP is used to cover the
following exposures:
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The Business Auto Policy, with the appropriate Individual Named Insured endorsement attached, provides the same coverage to the named individual as does a Personal Auto Policy, when an individually owned private passenger or utility vehicle is scheduled on the Business Auto Policy.
The Personal Auto Policy consists of a declarations page, Agreement and Definitions sections, and six lettered parts. Certain endorsements are mandatory and others may be added as needed or required for special circumstances.
See: Texas Personal Auto Policy Coverage Comparison; also "Insuring Texas Autos" and "Personal Auto Policy" (in PDF format)
Texas Personal Auto Policy - Declarations |
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The numbers below correspond to the numbers shown on the Declarations Page.
1. This section provides general information about the insured, the insurance company and the policy, including names, addresses and policy period.
2. It is clear that there is no coverage unless there is a limit of liability indicated and a premium charged. Vehicles scheduled on the policy may have a different selection of coverages as determined by showing a premium charge for each vehicle in the premium column.
3. Limits are scheduled in this column. The liability coverage can be either on a split limits basis or combined single limits basis. Physical damage valuation can be either actual cash value or stated amount. Deductibles are also indicated in this column.
4. Towing and labor coverage is shown on the declarations even though many companies do not include in the basic policy form. In that case, endorsement 524 must be attached for actual coverage provisions. Some companies do include the coverage in Part D or print the endorsement as a basic part of their policy form.
5. All vehicles owned by the insured for which coverage is desired at policy inception should be listed in this section, together with the classification and rating information requested.
Texas Personal Auto Policy |
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Actual Policy Language
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Explanation
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Information Page of PAP |
Information Page of PAP |
AgreementIn return for payment of the premium and subject to all the terms of this policy we agree with you as follows: |
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DefinitionsA. 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. |
Definitions A. "You" - the Named Insured
Note that the spouse must be a resident of the same household as the person whose name appears in the Declarations, in order to be considered a "you" and have the same protection. It is advisable to name both the husband and wife in the declarations since by doing so you avoid potential coverage problems should a separation or divorce occur during the policy period. The policy would continue to provide the broadest possible coverage to both persons even if they are maintaining separate households. |
| 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. Other words and phrases are defined. They are boldfaced when used. |
C. Private Passenger Autos This wording is necessary to provide "automatic" coverage on newly acquired leased vehicles. It has the effect of substituting the word "leased" wherever the word "owned" appears in the policy. |
| D."Family member" means a person who is a resident of your household and related to you by blood, marriage or adoption. This definition includes a ward or foster child who is resident of your household, and also includes your spouse even when not a resident of your household during a period of separation in contemplation of divorce. |
D. Family Members Note the requirement for residency in the household. This has been interpreted to include a dependent child living elsewhere to attend school. Under previous wording, a nonresident spouse during a period of separation was covered only as a permissive user. Now, inclusion of a nonresident spouse "in contemplation of divorce" provides some extension of coverage. The spouse would not have automatic coverage for newly acquired or substitute vehicles. (See technical report "Insuring Nonowned Autos") |
| E."Occupying" means in, upon, getting in, on, out or off. |
E. Occupying This is an important broadening of the dictionary definition and is used only in Part B (Medical Payments and Personal Injury Protection) and Part C (Uninsured/Underinsured Motorist). A 2001 Austin Court of Appeals decision ruled that a person lying underneath an auto performing maintenance is not "occupying" the auto. |
| F. "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. |
F. Trailers The definition is broad enough to clearly include a "gooseneck" or "fifth wheel" trailer. Note that whatever coverage is provided for a trailer is in effect even if it is not connected to or being pulled by a vehicle, as contrasted to coverage for a farm wagon or implement which only applies while being towed by a private passenger auto, pickup or van. |
| G. "Your
covered auto" means:
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G. Your Covered Auto(s) Vehicles that fall within the four categories in this definition receive the broadest coverage available under the terms of the policy. |
| 1. Any vehicle shown in the Declarations; |
1. Any Vehicle in Declarations
The eligibility of a vehicle for coverage under a PAP has been previously described. However, there is no qualifying language in this first category. If the company attaches coverage by description and premium charge, any type of vehicle will have coverage even if it does not meet the manual eligibility requirement. The most likely possibility of this occurrence is a "utility" vehicle which is used in business when such use has not been disclosed. G V W = gross vehicle weight |
| 2. [ed. note:
see I and II below]
I. Any of the following types of vehicles on the date you became the owner:
a. a private passenger auto; or b. a pickup or van with a G.V.W. of 25,000 lbs. or less not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2)used for farming or ranching. |
2. Newly Acquired Autos
This section outlines the automatic coverage feature for newly acquired vehicles. Note the restrictions in types of vehicles which are eligible for automatic coverage, as it tracks the eligibility requirement previously discussed. This restriction would apply even for a replacement vehicle. There would be no automatic coverage for a "utility" vehicle primarily used in the business of delivery. (see technical article "Sport Utility Vehicles") |
| II.
This provision (G.2) applies only if you:
a. acquire the vehicle during the policy period; and b. notify us within 30 days after you become the owner. |
If the acquired vehicle is an additional auto (not a replacement) it will have the broadest coverage which applies to any vehicle currently on the policy. The vehicle must be reported within 30 days in order for any coverage to continue after 30 days. |
| If the vehicle you acquire replaces one shown in the Declarations, it will have the same coverage as the vehicle it replaced. You must notify us of a replacement vehicle within 30 days only if you wish to add or continue Coverage for Damage to Your Auto. If the vehicle you acquire is in addition to any shown in the Declarations, it will have the broadest coverage we now provide for any vehicle shown in the Declarations. | If
the acquired vehicle is a replacement, it will have the same coverage as the
vehicle it replaced, even if that might give it less coverage than other
vehicles on the policy. All coverages except
Coverage for Damage to
Your Auto extend until policy expiration with no requirement for
notification. Coverage for Damage to Your Auto, if such coverage existed on
the replaced vehicle, continues after 30 days only if the replacement auto
is reported to the insurance company within 30 days of the acquisition. The option to continue physical damage on a replacement vehicle or any coverage on a newly acquired vehicle rests solely with the insured. The company must add coverage to the policy when the insured requests the addition within 30 days. (See technical report "Replacing, Adding, Newly Acquired Autos") |
| 3. Any trailer you own. |
3. Trailers Includes any trailer owned at inception or acquired during the policy period. They do not have to be described in the policy. Refer to Exclusion #6 in Part D - Coverage for Damage to Your Auto, for special information regarding damage coverage for trailers. |
| 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 |
4. Temporary Substitute Autos
The effect of this wording is to remove a "temporary substitute" auto from the broad class of "nonowned" autos, which have limited coverage, and to place them in the same category as owned and described vehicles, except as respects the "Other Insurance" section. Three important examples of broader coverage for temporary substitutes are: · For liability coverage, any person using the "temporary substitute" and the owner of the temporary substitute would be "covered persons." For Medical Payments and Personal Injury Protection, any person occupying a "temporary substitute" is a "covered person." · It can include an auto owned by a "family member" or one which is furnished to or available for regular use of the named insured or spouse or a "family member." · For liability coverage, a pickup or van rented as a temporary substitute for a vehicle used in business would be covered and not subject to liability exclusions A.6. or A.7. In 2003, the Texas Supreme Court ruled in Progressive vs. Sink that the definition of a temporary substitute auto is limited by the permissive use exclusion — the user of a non-owned auto must have a reasonable belief that he or she is entitled to do so. (See technical article "Covering Rental Vehicles" and Coverage D "temporary substitute" language). |
| H."Business day" means a day other than a Saturday, Sunday or holiday recognized by the state of Texas. |
Texas Personal Auto Policy - Part A: Liability Coverage |
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Actual Policy Language
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Explanation
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Part A - Liability Coverage
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Part A - Liability Coverage |
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Insuring Agreement
A. We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. Property damage includes loss of use of the damaged property. Damages include prejudgment interest awarded against the covered person. We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted. |
A. Insuring AgreementNote that the terms "bodily injury," "property damage" and "auto accident" are not defined, but left to legal interpretation. In its 2004 decision in the case Texas Farm Bureau v. Sturrock, the Texas Supreme Court ruled that an “auto accident” or a “motor vehicle accident” occurs when (1) one or more vehicles are involved with another vehicle, an object, or a person, (2) the vehicle is being used, including exit or entry, as a motor vehicle, and (3) a causal connection exists between the vehicle’s use and the injury-producing event. This case involved a PIP claim resulting when the vehicle’s driver entangled his foot in the door facing and fell out of the vehicle. The court’s decision allowed the driver to collect PIP benefits previously denied by the company. Other types of liability claims affected by the Supreme Court’s interpretation, based on previous decisions, include:
The insurance company makes two promises here: (i) to pay legal damages to which the policy applies, and (ii) to settle or defend any claim for such damages. The option to settle rests solely with the insurer. It is clear that defense costs are paid in addition to the limit of liability which is totally reserved for the payment of damages. The company has no obligation to continue defending any insured after the limit of liability has been paid out. (See "Liability Components") |
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B. "Covered person"
as used in this Part means:
B. Covered Persons1. You or any family member for the ownership, maintenance, or use of any auto or trailer. |
1. Named Insured and Family Members
The named insured and family members are provided the broadest possible coverage for "covered autos" and nonowned autos. If there is no exclusion that applies, these persons will be covered for anything that would meet the legal interpretation of the undefined word "auto." This could include a vehicle of any size or description, as long as it has at least 4 wheels (see Exclusion B.1.). Texas courts have generally held that "use" is broader than "operation" and includes putting or bringing a thing into action or service and employing a thing for or applying a thing to a given purpose. For example, sending a maid or other household employee to the store could be considered "use" by the named insured. For a sole proprietor of a business that covers a business vehicle on a PAP, this amounts to non-owned auto liability just like one would have under a BAP. |
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| 2. Any person using your covered auto. |
2. Permissive UsersIncludes "temporary substitutes." Note the "permission" aspect found in Exclusion A.8. |
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| 3.
For your
covered auto, any person or organization but only with respect to
legal responsibility for acts or omissions of a person for whom coverage is
afforded under this Part. 4. For any auto or trailer, other than your covered auto, any person or organization but only with respect to legal responsibility for acts or omissions of you or any family member for whom coverage is afforded under this Part. This provision (B.4.) applies only if the person or organization does not own or hire the auto or trailer. |
3. OthersBoth #3 and #4 provide coverage for the "vicarious liability" of others arising out of the use of those autos to which liability coverage applies. The distinction between the two items is that #4 excludes coverage for the owner of a nonowned vehicle used by the named insured or a family member. Thus, if the named insured borrows a fellow employee's car to use on their employer's business, the employer would have coverage but the employee owning the car would not. This provision also excludes direct protection for the owner of a rent car, unless the rent car is being used as a "temporary substitute." |
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Supplementary PaymentsIn addition to our limit of liability, we will pay on behalf of a covered person: |
Supplementary Payments These supplementary payments are not charged against the limit of liability. |
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| 1. Up to $250 for the cost of bail bonds required because of an accident including related traffic law violations. The accident must result in bodily injury or property damage covered under this policy. |
1. Bail Bonds
A bail bond for a ticket with no accident involvement is not subject to this provision. A single-car accident with no covered BI or PD would not trigger this provision. |
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| 2. Premiums on appeal bonds and bonds to release attachments in any suit we defend. | |||||||
| 3. Interest accruing after a judgment is entered in any suit we defend. Our duty to pay interest ends when we offer to pay that part of the judgment which does not exceed our limit of liability for this coverage. |
3. Interest
Postjudgment interest is covered here as a supplementary payment. Prejudgment interest is included as a part of "legal damages" and therefore included within the limit of liability. |
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| 4. Up
to $50 a day for loss of earnings, but not other income, because of
attendance at hearings or trials at our request. 5. Other reasonable expenses incurred at our request. |
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ExclusionsA. We do not provide Liability Coverage for any person: |
Exclusions A. The application of an exclusion to one "covered person" will not exclude protection for another "covered person" who might be legally liable for the accident. |
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| 1. Who intentionally causes bodily injury or property damage; |
1. Intentional Injury or Damage
There is no exception for intentional acts arising out of attempts to protect persons or property. |
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| 2. For damage to property owned or being transported by that person; |
2. Owned or Transported Property
No coverage for running into one's own garage on this policy - it's covered on the homeowners policy, subject to the deductible. However, see exclusion #3 below for coverage if one runs into the garage of a rental home. |
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| 3. [Ed. Note - see I and II below] | 3. Care, Custody, or Control (with exceptions) | ||||||
| I. For damage
to property: a. rented to; b. used by; or c. in the care of; that person. |
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| II. This
exclusion (A. 3.1) does not apply to damage to: a. a residence or private garage; or |
The
exceptions to the exclusion provide some very important protection.
First, part "a" provides coverage for an insured who damages his rented house or garage, as a result of his own negligence. |
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| b. any of the
following type vehicles not owned by or furnished or available for the
regular use of you or any
family
member: (1) private passenger autos; (2) trailers; or (3) pickups or vans. |
Part
"b" of the exception protects "covered persons" for their legal liability
for damage to a rented or borrowed vehicle or trailer, other than trucks
larger than a "utility" vehicle. An insured can be legally liable for damage
to a rent car either through negligence or by virtue of his "contractual"
responsibility to return an undamaged vehicle to the rental company. (See
Technical Report:
Furnished or Available) Damage to a borrowed vehicle is covered only if the damage is caused as a result of the insured's negligence. (See the "Coverage for Rental Cars Under the PAP" for further information on the rent car exposure.) |
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| However, the exclusion 3.I. does apply to a loss due to or as a consequence of a seizure of an auto listed in 3 II. b by federal or state law enforcement officers as evidence in a case against you under the Texas Controlled Substances Act or the federal Controlled Substances Act if you are convicted in such case. | |||||||
| 4. For bodily injury to an employee of that person during the course of employment. This exclusion (A.4.) does not apply to bodily injury to a domestic employee unless workers' compensation benefits are required or available for that domestic employee. |
4. Employee Injury This exclusion would apply to the actual employer of a person, including the named insured or an organization such as a partnership or corporation which would otherwise qualify as a "covered person" under Items #3 and #4 of the definition of "covered person." Especially important is the absence of an exclusion for injury to a "fellow employee." This exposure is covered by the PAP so long as some other exclusion does not apply. Injury to a domestic employee is covered by exception. |
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| 5.
For that person's liability arising out of the ownership or operation of a
vehicle while it is: a. being used to carry persons for a fee; this does not apply to a share-the-expense car pool. b. being used to carry property for a fee; this does not apply to you or any family member unless the primary usage of the vehicle is to carry property for a fee; or c. rented or leased to another; this does not apply if you or any family member lends your covered auto to another for reimbursement of operating expenses only. |
5. Use for a Fee The intention of this exclusion is to exclude the hazards associated with the operation of an automobile for hire to the general public. The wording attempts to overcome company interpretations of previous wording that excluded coverage for delivering property when there was an exchange of money for such a service, such as delivery of pizzas or newspapers. Such activity is excluded only if that is the primary usage. |
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| 6.
While employed or otherwise engaged in the business or occupation of: a. selling; b. repairing; c. servicing; d. storing, or e. parking; vehicles designed for use mainly on public highways. This includes road testing and delivery. This exclusion (A.6.) does not apply to the ownership, maintenance or use of your covered auto by:
1. you, 2. any family member; or 3. any partner, agent or employee of you or any family member. |
6. Garage Business Use The PAP will not apply to individuals for whom coverage should be found in a garage liability policy. Excluded are all vehicles except "covered autos" operated by the insured, family members or employees of either. Application of this exclusion would deny coverage (i) to the named insured if he works at a garage and drives a customer's auto, and (ii) to a garage employee driving a "covered auto." |
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| 7.
Maintaining or using any vehicle while that person is employed or otherwise
engaged in any business or occupation not described in Exclusion A.6. This
exclusion (A.7.) does not apply to the maintenance or use of a: a. private passenger auto; b. pickup or van that is your covered auto; or c. trailer used with a vehicle described in 7.a. or 7.b. above
|
7. Other Business Use The primary purpose of this exclusion is to exclude coverage for the use of a nonowned pickup, van or any larger vehicle in a business or occupation. (Note: Coverage is available with Endorsement 511 - see discussion in endorsement section.) An owned trailer is not covered when used with a nonowned truck for business purposes. (see technical article "Sport Utility Vehicles") |
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| 8. Using a vehicle without a reasonable belief that that person is entitled to do so. This exclusion (8) does not apply to you or any family member while using your covered auto. |
8. Non-Permissive Users This exclusion would apply (i) to the named insured or a family member operating a nonowned auto, or (ii) someone else operating a "covered auto." |
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| 9. I.
For bodily injury or property damage for which that person: a. is an insured under a nuclear energy liability policy; or b. would be an insured under a nuclear energy liability policy but for its termination upon exhaustion of its limit of liability. II. A nuclear energy liability policy is a policy issued by any of the following or their successors: a. American Nuclear Insurers; b. Mutual Atomic energy Liability Underwriters; or c. Nuclear Insurance Association of Canada. |
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| B. We
do not provide Liability Coverage for the ownership, maintenance or use of: 1. Any motorized vehicle having fewer than four wheels; |
B. 1. Two- or Three-Wheeled Autos Motorcycles and 3-wheelers could not be covered on this policy as additionally acquired, replacement, nonowned or temporary substitute vehicles. (Note: Endorsement 583 modifies this and other provisions to allow coverage for specific "miscellaneous type vehicles"see discussion in the endorsement section.) |
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| 2.
Any vehicle, other than
your covered
auto, which is: a. owned by you; or b. furnished or available for your regular use. |
2. Owned or Furnished Autos Named Insured Section "a" reinforces the fact that a vehicle which is owned at inception, and which is not described in the declarations, does not have any coverage. Section "b" excludes coverage when the named insured operates a furnished auto, such as a company car. The terms used in this exclusion are not defined and are therefore subject to interpretation. "Furnished" suggests possession of the auto, while "available for regular use" could mean access to the auto without specific permission. (Note: Coverage is available with Endorsement 511 - see discussion in endorsement section.) |
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| 3. I. Any
vehicle, other than
your covered
auto, which is: a. owned by any family member; or b. furnished or available for the regular use of any family member. II. However, this exclusion (B.3.) does not apply to your maintenance or use of any vehicle which is: a. owned by a family member; or b. furnished or available for the regular use of a family member. |
3. Owned or Furnished Autos Family Members This exclusion applies to the named insured and family members. These persons are not covered for a vehicle owned by the family member, or a vehicle furnished for their regular use, except for "covered autos." The exception to the exclusion gives coverage back to the named insured while operating a vehicle owned by a family member. However, exclusion B.2.b. above may still apply if the family member's vehicle is furnished or available for the regular use of the named insured. |
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| C. We do not provide liability coverage for you or any family member for bodily injury to you or any family member, except to the extent of the minimum limits of liability coverage required by Texas Civil Statutes, Article 6701h, entitled "Texas Motor Vehicle Safety-Responsibility Act." |
C. Family Member Exclusion Limited This exclusion was intended to prevent recovery for intra-family suits. However, the Texas Supreme Court in 1993 invalidated this exclusion to the extent of the Financial Responsibility Law requirements. Based on this decision and the policy language added following that decision, a family member can collect damages under this policy, up to the minimum limits, when the injury is caused by another family member. |
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Limit of LiabilityA. If separate limits of liability for bodily injury and property damage liability are shown in the Declarations for this coverage the limit of liability for "each person" for bodily injury liability is our maximum limit of liability for all damages for bodily injury sustained by any one person in any one auto accident. Subject to this limit for "each person," the limit of liability shown in the Declarations for "each accident" for bodily injury liability is our maximum limit of liability for all damages for bodily injury resulting from any one auto accident. The limit of liability shown in the Declarations for "each accident" for property damage liability is our maximum limit of liability for all damages to all property resulting from any one auto accident. If the limit of liability shown in the Declarations for this coverage is for combined bodily injury and property damage liability, it is our maximum limit of liability for all damages resulting from any one auto accident. This is the most we will pay regardless of the number of: 1. Covered persons; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the auto accident. We will apply the limit of liability to provide any separate limits required by law for bodily injury and property damage liability. However, this provision will not change our total limit of liability. |
Limit of Liability A. A company has the option of printing a policy that includes language for split limits, combined single limits, or both. The language for both limits is displayed here. This wording and the insuring agreement provision of coverage for any insured for any claim provide what is commonly called the "severability of interests" or separation of insureds feature of the PAP. No provision of the PAP prevents claims or suits by one insured against another, except for Exclusion C, which prevents recovery in intra-family suits for amounts in excess of minimum financial responsibility requirements. |
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| B. Any payment under the Uninsured/Underinsured Motorists Coverage or the Personal Injury Protection Coverage of this policy to or for a covered person will reduce any amount that person is entitled to recover under this coverage. | B. This coordination of benefits provision prevents a duplication of payments among various parts of the PAP. Similar wording in the Medical Payments Coverage part takes care of its omission here. | ||||||
Out of State CoverageIf an auto accident to which this policy applies occurs in any state or province other than the one in which your covered auto is principally garaged, we will interpret your policy for that accident as follows: A. If the state or province has: 1. A financial responsibility or similar law specifying limits of liability for bodily injury or property damage higher than the limit shown in the Declarations, your policy will provide the higher specified limit. 2. A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage. B. No one will be entitled to duplicate payments for the same elements of loss. |
Out of State Coverage The PAP limits and coverage will modify themselves to comply with financial responsibility or other laws in any state or province in which a covered accident may occur, unless the vehicle is principally garaged in that state at the time of the accident. When an insured moves to another state to establish permanent residency, this provision will not apply, providing incentive to cancel the Texas PAP and purchase a new policy in the new state.
(See also: "Mexico Coverage" technical report) |
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| Financial
Responsibility Required When this policy is certified as proof of financial responsibility, this policy shall comply with the law to the extent required. |
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| Other Insurance If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any liability insurance we provide to a covered person for the maintenance or use of a vehicle you do not own shall be excess over any other applicable liability insurance. |
Other Insurance This provision for excess coverage over any applicable liability coverage on a nonowned vehicle can produce a strange phenomenon when a covered person damages the nonowned vehicle and causes BI and/or PD to others. Assuming no specific exclusions apply, the named insured's PAP will pay for damage to the nonowned vehicle but the liability policy carried by the vehicle owner will take care of the third-party claims, with the named insured's PAP available for excess coverage for those with "insured" status on the PAP, but not the vehicle owner |
Texas Personal Auto Policy - Part D: Coverage For Damage To Your Auto |
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Actual Policy Language
|
Explanation
|
|
Part D - Coverage For Damage To
Your Auto
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Part D - Coverage For Damage To Your Auto |
|
Insuring Agreement
A. We will pay for direct and accidental loss to your covered auto, including its equipment less any applicable deductible shown in the Declarations. However, we will pay for loss caused by collision only if the Declarations indicate that Collision coverage is provided. |
A. Insuring AgreementPart D provides "all risk" coverage on "covered autos." There are two coverage categories: Collision and Other Than Collision. Selection of one or both of these is determined on a per-vehicle basis, by showing a premium entry on the declarations page. Each of these two coverage categories has its own separate deductible, as shown on the declarations. The inclusion of "equipment" in the insuring agreement is generally taken to encompass any item designed for use with an automobile and attached to it or normally contained in it. This broad interpretation necessitates several restrictions in the exclusions section, to prevent coverage on certain items. (See Technical Reports: "Your Covered Auto" and Coverage D - Damage to Your Auto and Intentional Damage By An Insured) |
| B. "Collision"
means the upset, or collision with another object of your covered
auto. However, loss caused by the following are not considered
"collision":
1. Missiles or falling objects; 2. Fire; |
