1. ISO’s Personal Auto Policy Changes and Basic PAP Information
Christopher J. Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS
Executive Director – Big “I” Virtual University

2. Today’s Agenda Nine Changes to the PAP
21 Changes to Multistate Endorsements
Miscellaneous Information

3. 9 Changes to the PAP

4. Newly Acquired Auto
The current situation: Current policy language gives automatic coverage to a “newly acquired auto” that replaces another one without the need to notify the insurer (except for physical damage).
The issue: If the carrier is not notified, no way to change symbol (if necessary) and charge correct premium.
The change: When an insured acquires any vehicle, they are required to notify the carrier within 14 days.
The effect: New notification requirements

5. Supplementary Payments
The current policy: Supplementary Payments currently pay up to $200 per day for loss of earnings
The issue: This limit does not match other ISO programs
The change: ISO is increasing the daily limit to $250
The effect: Obvious

6. Public or Livery Conveyance Exclusion
The current situation: Currently the public or livery conveyance exclusionary wording within the PAP is absolute. The PP Public or Livery Conveyance Exclusion Endorsement (designed to reinforce the policy exclusion) is also absolute.
The issue: There is a concern that this wording may be misapplied when volunteers transport others for charitable purposes.
The change: New wording is being incorporated into the exclusion to provide an exception for the ownership or operation of a vehicle or a “your covered auto” when being used for volunteer or charitable purposes.
The effect: 1) The exclusionary wording with its exception is being incorporated into the form – the PP is being withdrawn; 2) The PP , PP and PP are being revised. Overall, a broadening of coverage.

7. PAP Exclusionary Endorsements
The current situation: PP Personal Vehicle Sharing Program Exclusion Endorsement; and PP Custom Equipment Exclusion Endorsement are currently available for use.
The issue: These are required endorsements that require attachment to every PAP.
The change: The wording of both exclusionary endorsement is being included in the PAP base form wording.
The effect: Both forms are being withdrawn. There is no coverage impact.

8. Racing Exclusion
The current situation: The current PAP racing exclusion excludes under Coverage A, B and D “…coverage for the ownership, maintenance or use of any vehicle located inside a facility designed for racing, for the purpose of competing in, or practicing or preparing for any prearranged or organized racing or speed contest.”
The issue: Driver “skill training” activities are not addressed.
The change: Wording is changed to also exclude participation in a skill training or driver skill event.
The effect: This is a reduction in coverage.

9. Flying Car Exclusion
The current situation: There are no viable flying cars and there is no flying car exclusion in the PAP or by endorsement.
The issue: ISO believes technology and economics will soon or eventually allow for flying cars.
The change: Injury or damage arising from, related to, or occurring to flying cars will be excluded under all four coverage parts.
The effect: There is currently no effect, but eventually this may be a limitation on or reduction of coverage.

10. Other Insurance Provision
The current situation: Under Part A, the current policy wording reads: “However, any insurance we provide for a vehicle you do not own, including any vehicle while used as a temporary substitute for "your covered auto", shall be excess over any other collectible insurance.”
The issue: Personal umbrella polices generally state they are excess over any other insurance. This lead to confusion in the courts since both policies stated they were excess.
The change: Adding wording to the Other Insurance provision in Part A to recognize the possibility of an umbrella and state that it is not excess over a policy that is intended and is specifically an excess policy: “except insurance written specifically to cover as excess over the limits of liability that apply in this policy.”
The effect: No real effect, just clarification of intent.

11. Transportation Expense Coverage
The current situation: Current unendorsed transportation expense limit in Coverage D is $20 per day / $600 maximum
The issue: The limit does not appear to have kept up with market conditions
The change: ISO is increasing the base transportation expense limit to $30 per day / $900 maximum
The effect: No effect on coverage, just an increase in limit

12. Duties Provision
The current situation: Currently, the Duties After an Accident or Loss provision in the B.3.b. of Part E requires that the insured must submit as often as reasonably requested to examination under oath.
The issue: There is currently no specific requirement that the insured provide a recorded statement if requested. The insured could refuse without violating the duties owned and endangering coverage.
The change: ISO is adding wording requiring the insured to submit as often as reasonably required to recorded statements.
The effect: An additional duty is being placed upon the insured.

13. 21 Multistate Endorsements

14. Trailer/Camper Body Coverage Endorsement
Currently existing endorsement: PP 03 07
New mold exclusionary wording is being added
According to ISO, apparently RVs, camper bodies and trailers are or can be especially susceptible to mold damage
New exclusionary wording in the endorsement reads:
“We will not pay for: Loss due to "fungi", wet or dry rot, or bacteria meaning the presence, growth, proliferation, spread or any activity of "fungi" wet, or dry rot, or bacteria.”
Adding the definition of “fungi” to the endorsement
Two other changes to the endorsement:

15. Coverage for Damage to Your Auto Endorsement
Applies to PP Coverage for Damage to Your Auto (Maximum Limit of Liability)
ISO is inserting the statement, “Coverage is not provided on an agreed value basis.”
Endorsement is for special value autos such as classic and antique autos
The endorsement allows vehicles to be written on a stated value basis
The loss settlement provision states that losses will be settled for the lesser (least) of stated value or ACV
The new wording simply reinforces that coverage is NOT on an agreed value basis, so there is no effect on the coverage

16. Change Endorsement Withdrawn
PP Change Endorsement
Currently used to document the date a policy change is to become effective
ISO has been told carriers no longer make use of the endorsement
The endorsement is being withdrawn from use

17. Underinsured Motorist Coverage Endorsement
PP Underinsured Motorist Coverage
Three changes are being made to this endorsement to dovetail with changes made to the PAP:
The volunteer or charitable use exception wording being added;
The personal vehicle sharing exclusionary wording is incorporated into the wording; and
The flying vehicle exclusionary wording is added.

18. Limited Mexico Coverage Endorsement
PP Limited Mexico Coverage
Revising the endorsement’s warning statement due to recent research conducted and information received
The new warning shall read:
AUTO ACCIDENTS IN MEXICO MAY BE SUBJECT TO THE LAWS OF MEXICO, NOT THE LAWS OF THE UNITED STATES. UNDER MEXICAN LAW, AUTO ACCIDENTS ARE CONSIDERED A CRIMINAL OFFENSE AS WELL AS A CIVIL MATTER.
THE COVERAGE WE PROVIDE YOU BY THIS ENDORSEMENT MAY NOT MEET MEXICAN AUTO INSURANCE REQUIREMENTS.

19. Miscellaneous Type Vehicle Endorsement
PP Miscellaneous Type Vehicle Endorsement
ISO is introducing a mold exclusion under coverage Part D and adding a definition of “fungi”
Also revising the exception to Exclusion 7 to reinforce that coverage is excluded for a motor home a named insured does not own when used as a temporary substitute for a covered motor home

20. Miscellaneous Type Vehicle Amendment
PP Miscellaneous Type Vehicle Amendment (Motor Homes)
This endorsement allows the insured to purchase liability, med pay, comp and/or collision when a motor home that is a “your covered auto” is rented to others for an additional premium
ISO made a rules change regarding the rating of these motor homes stating that they would be rated as PPAs used for business purposes
Because of the rules revisions, the endorsement removed references to premium since it will now be a rating issue
Added checkboxes which can be used to indicate if such coverage will be provided for a particular motor home and which coverages are provided

21. Joint Ownership Endorsement
Changes the PP Joint Ownership Coverage
Current wording allows resident individuals (other than husband and wife), related or not, and non-resident relatives to have joint ownership
The revised form:
Provides for a listing of the joint owners
If a non-resident relative, entry space for name and address
Removes coverage information
Replaced “husband and wife” with “spouses”
No effect on coverage, allows the carrier increased flexibility

22. Auto Loan/Lease Coverage Endorsement
PP Auto Loan/Lease Coverage
Revised form:
Addresses how interest from deferred payments are to be handled
Addresses primacy of coverage when another source of gap coverage applies to the loss
The result is a reduction in coverage

23. Transition Endorsement
PP 00 09
This endorsement can be attached to the edition of the PAP to make it equate to the edition

24. Full Safety Glass Coverage Endorsement
New optional endorsement
PP Full Safety Glass Coverage
Coverage applies when:
Other Than Collision coverage is in effect
The auto is listed in the endorsement

25. Key Replacement and Related Services Coverage Endorsement
New optional endorsement
PP Key Replacement and Related Services Coverage
Provides coverage for only the scheduled vehicles
Pays without application of a deductible for:
Reasonable expenses to get into the car if the fob is lost or stolen
The cost to replace and program keys or key fobs lost or stolen

26. Pet Injury Coverage Endorsement
New endorsement
PP Pet Injury Coverage
Insured chooses a limit and no deductible applies
Coverage extends from Part D and applies only when:
Collision and OTC applies to at least one vehicle
The pet (limited to dog or cat) owned by a “you” or “family member” is in the car at the time of the accident
Covered costs include vet expenses or cost to cremate or dispose of the pet incurred within one year of the date of loss
The limit is a per loss limit

27. Child Restraint System Coverage Endorsement
New optional endorsement (To keep up with the market)
PP Child Restraint System Coverage
NHTSA recommendations that systems be replaced after a crash
Coverage extends from Part D and applies only when:
Collision and OTC applies to at least one vehicle
The child restraint system is owned by the you or a “family member”
When the child restraint system is inside a “your covered auto” or a “non- owned auto” at the time of the loss
Maximum limit is shown in the schedule or declarations and provides replacement with like kind and quality

28. Replacement Cost Coverage Endorsement
New optional endorsement (To keep up with the market)
PP Replacement Cost Coverage Endorsement
To qualify for replacement cost:
The covered auto must be added within 24 months of purchase
Have less than 24,000 miles
No automatic coverage for a newly acquired auto
No coverage for a leased vehicle
There must be a total loss
Coverage is subject to a deductible

29. Additional Resident of Your Household Endorsement
New optional endorsement
PP Additional Resident of Your Household
Developed to accommodate current living arrangement trends
This is an “additional insured” type endorsement
Allows the naming of an additional resident
Amends the definition of “family member” to include the named resident
Specifies that the carrier is depending on the insured to be truthful
Requires the insured to notify the carrier if residency changes

30. Suspension of Insurance Endorsement
Alters/revises the PP Suspension of Insurance
Other Than Collision is added to the schedule of coverages that can be suspended

31. Snowmobile Endorsement
PP Snowmobile Endorsement
Revising the form with no coverage impact.
Replacing the word “lesser” with “least”

32. Personal Property Coverage
New optional endorsement (Millennial-based)
PP Personal Property Coverage
Extends homeowner-like personal property coverage to personal property anywhere in the world
Open peril coverage
ACV basis with replacement cost option
No non-auto liability coverage

33. Named Non-Owner Coverage Endorsement
Revising the PP named Non-Owner Coverage
Physical damage coverage will now be an option

34. Trust Endorsement A revision to PP 13 03 Trust Endorsement
Multiple revisions regarding the naming of the trust, the grantor and the trustee
More flexibility to accommodate various trust structures

35. Miscellaneous Information

36. Change Effective Date
ISO has filed these to be effective September 1, 2018
In a majority of states, the changes are applicable to all policies written on or after September 1, 2018.
In Alaska, Connecticut, Florida, Louisiana and Maryland, this rule applies: These changes are applicable to all policies effective on or after September 1, 2018.
In certain states, ISO does not establish effective dates. These include: California, Colorado, Texas and Virginia.

37. Jurisdictions These revisions are applicable in all states, except:
Hawaii
North Carolina

38. Uber, Lyft and Other Ridesharing Exposures

39. “Public or Livery Conveyance”
The industry seemed to collectively agree that the public or livery conveyance exclusion in the personal auto policy (PAP) applied to ridesharing.
But the unanswered (or unclear) question was, at what point was the car being used as a public or livery conveyance? Was it:
When the driver turned on the app and made himself "available" to those needing a ride?
When the driver accepted a request for the ride? or
When the driver actually picked up the passenger?

40. ISO Response
Insurance Services Office (ISO) created three endorsements to address when the PAP ceases to provide coverage (form numbers differ by state, so only endorsement names are used). Depending on the endorsement attached, PAP coverage may cease:
When the driver turns on the app;
When the driver has logged in to the app but has NOT accepted a request;
When the driver accepts a request but has NOT picked up the rider; or
When the driver picks up the rider. 

41. Depending on the Situation
If the Carrier Wants to End Coverage When…
They attach the…
When the driver turns on the app…
Public or Livery Conveyance Exclusion
When the driver has logged in to the app but has NOT accepted a request…
Limited Transportation Network Driver Coverage (No Passenger)
When the driver accepts a request but has NOT picked up the rider
Transportation Network Driver Coverage (No Passenger)

42. Insured Status in the PAP

43. Liability Coverage Liability Coverage (Coverage Part A)
Liability Coverage
(Coverage Part A)
Named Insureds / Extended Insureds
“You”1
“Family Member”2
For the ownership, maintenance or use of ANY auto or trailer causing BI or PD.
Automatic Insureds
Any person using “your covered auto”4 with permission
Any person or organization legally responsible for the actions of an insured for the use of a covered auto, trailer or other vehicle not owned by the insured or the organization, or provided for the insured’s regular use.
Additional
Insureds
Joint Ownership Coverage (PP 03 34): Extends status as a “You” to other than husband/wife co-owners or non-resident relatives when the named insured and the scheduled individual jointly own a vehicle eligible for a PAP.
Additional Insured – Lessor (PP 03 19): Extends vicarious liability and physical damage protection to the lessor of a vehicle leased by a “You.”
Additional Resident of Your Household (PP 33 37): Allows for the extension of “family member” to include non-related individuals such as nannies, live-ins and room mates (college exposure) who do not own an insured vehicle, but have access to it. (Effective 9/1/18)

44. Medical Payments Medical Payments (Coverage Part B)
Medical Payments
(Coverage Part B)
Named Insureds / Extended Insureds
“You”1
“Family Member”2
Injured while “occupying” a motor vehicle designed for use on public roads or when struck as a pedestrian by such a vehicle.
Automatic Insureds
Any other person “occupying”5 “your covered auto”4
Additional
Insureds
Joint Ownership Coverage (PP 03 34)
Additional Resident of Your Household (PP 33 37)

45. Uninsured (UM) Motorist3
UM/UIM
Uninsured (UM) Motorist3
(Coverage Part C)
Named Insureds / Extended Insureds
“You”1
“Family Member”2
BI or PD caused by an accident resulting from the ownership, maintenance or use of an auto by an at-fault uninsured driver.
Automatic Insureds
Any other person “occupying” “your covered auto”
Consequential damages suffered by a third party due to injury to any insured person for this coverage part
Additional
Insureds
Joint Ownership Coverage (PP 03 34)
Additional Resident of Your Household (PP 33 37)

46. Physical Damage Physical Damage (Coverage Part D)
Physical Damage
(Coverage Part D)
Named Insureds / Extended Insureds
Attaches to a vehicle that qualifies as a “Your Covered Auto”4 rather than an individual or entity.
Automatic Insureds
Additional
Insureds
Joint Ownership Coverage (PP 03 34)
Additional Insured – Lessor (PP 03 19)

47. Definitions
“You”: Named insured and spouse if resident of the same household (and for up to 90 days after common residency ends)
“Family Member”: An individual related to the “You” by blood, marriage or adoption, including a ward or foster child, who is a “resident” of the “You’s” household. A resident includes someone away attending school. An individual in active military service with any of the US armed forces shall not be included as resident in the same household unless such individual customarily operates the auto.
Uninsured (UM) / Underinsured (UIM) Motorist:
No liability coverage or bond applies at the time of the accident
Liability coverage or bond does apply but is less than the state minimum limits
A hit-and-run vehicle whose driver cannot be identified
Coverage applies but the insurance carrier denies coverage (not liability) or becomes insolvent
“Your covered auto”:
Any vehicle listed in the declarations
A newly acquired auto (must be a PPV or a pickup or van with a GVW of 10,000 lbs. or less not used primarily for delivery or transportation of goods)
Any trailer “you” own
A temporary substitute auto
“Occupying”: In; upon; getting in, on, out or off

48. Executive Director, Big “I” Virtual University Chris.boggs@iiaba.net
CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS
Executive Director, Big “I” Virtual University