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Physical-Damage

Does the PAP Cover Engine Damage Due to Water in the Fuel?

A PAP customer’s engine was damaged by water in the fuel. The adjuster has tentatively denied the claim, citing the wear and tear and mechanical breakdown exclusions. Do you agree? If not, what argument do you make to get this claim covered…if it should be covered?

PAP Coverage for Damage Due to “Freezing”

The temperature got so cold that the vinyl flooring in an insured travel trailer cracked. Is this damage excluded by the “freezing” exclusion in the ISO Personal Auto Policy or does “freezing” only refer to the liquids in the vehicle?

When Owned Autos Collide…How Many Deductibles?

An insured backs into his wife’s car, damaging both vehicles insured under the same policy. The deductible provision says no deductible applies if an insured vehicle collides with another vehicle insured by the same carrier. The adjuster says this means an insured under a different, not the same, policy. Is that what the policy actually says? Interestingly, it depends on which edition of this insurer’s policy you have and where you live.

Why Buy Auto Physical Damage Coverage?

Your insured declines to purchase physical damage coverage because his vehicle “isn’t worth much” and “I’m a good driver.” His vehicle is totaled by another vehicle whose insurer denies liability. What now?

ACV vs. RC Recovery in Liability Claims

An at-fault motorist struck a dwelling and garage, including the vehicles in the garage. Does the PAP liability coverage pay on a replacement cost (RC) or actual cash value (ACV) basis? In this article, we'll examine this and other claims that consider what valuation method is appropriate in legal liability claims.

Adjusters Say the Darnedest Things

I've often said that it's inexcusable when a claim is denied for no other reason than 'It's not covered.' The insured is owed a reason for a claim denial, by contract or law. However, sometimes when I hear the reason, I think perhaps that it's better I didn't know because, to paraphrase Art Linkletter, 'Adjusters sometimes say the darnedest things!'

Betterment in the ISO Personal Auto Policy

In the 1994 revision to the Personal Auto Policy, ISO made one of the biggest changes in auto coverage history by formally introducing the concept of 'betterment' to the PAP. While some carriers had reduced claim settlements for betterment under their proprietary policies, the ISO form had not explicitly permitted this...until then.

Comparing Apples to Oranges

You've seen the commercials: 'Call now and save 15% or more on your car insurance!' Unfortunately, when someone is selling substandard coverage or service, their only marketing ploy is price. So, their advertising campaign leads consumers to believe that the only difference between insurance companies is price. Here's proof that you can't compare apples to oranges.

Counterfeit Checks and Theft

A Corvette was stolen by a scam artist that gave the insured a counterfeit check for $41,500. The bank didn't find out that the check was counterfeit until a week later. The PAP was still in force, but the adjuster denied the claim. She said that, since the insured signed the title to the Corvette over to the criminal, he no longer owns it and has no insurable interest. Is the insured just out $41,500?

Covering Electronic Equipment Under the PAP (and BAP)

With the increasing use of electronic consumer equipment in vehicles—from TVs and DVD players to GPS systems and satellite radios—it is likewise increasingly important that agency CSRs and producers fully understand what types of equipment are covered and not covered, and under what circumstances. In this article and a related article, we'll take a look at various types of equipment, coverages and gaps, depending on the PAP edition.

Diminution of Value in the ISO Personal Auto Policy

When a vehicle is damaged in an accident, the resulting resale value (even after expert repairs) may be less than that prior to the accident. Do auto policies cover such diminished value claims? This article will explore both first-party physical damage claims and third-party liability claims under the ISO Personal Auto Policy.

Do the PAP and BAP Cover Emergency Response Fees?

In an effort to offset expenses, some jurisdictions have begun to make charges, in some cases, for responses to auto accidents, car fires, and accident debris clean-up. Do the PAP and BAP cover such emergency response fees?

Driving a Dealer Loaner Auto...No PAP Coverage?!

Your insured's auto is at the Cadillac dealer's shop for servicing and he is given a loaner car which he totals to the tune of $37,000 in an at-fault accident. His PAP insurer says his physical damage coverage is excess on nonowned autos though they might be willing to contribute on a pro rata basis since this is a temporary substitute. The dealer's policy pays the damages, then subrogates against your insured by filing a lawsuit. The PAP insurer denies the liability claim under a reservation of rights, citing the exclusion for care, custody, or control. Who's right?

Insuring Autos on a Stated Amount Basis

Question: I am in a debate with an underwriter concerning an antique auto. We have the stated amount endorsement (PP 03 08) on the policy and the insured has an appraisal supporting this stated amount. The endorsement states that the company will pay the lesser of stated amount, ACV, or cost to repair. Our debate is this: Is the appraised amount the same as ACV? If not, what is the point of the endorsement?

Is a GPS Covered by an Auto Policy?

Recently, our 'Ask an Expert' service received an email asking whether the PAP or BAP policies cover a GPS (and other hi-tech equipment). Below is an analysis of both the PAP and BAP relative to coverage (or lack thereof).

Is a Person an Animal?

The PAP defines 'collision' to involve impact of an insured auto with another auto or object. Comprehensive, or 'other than collision' (OTC) coverage applies to contact with a bird or animal. So, if you hit a pedestrian, is it a comprehensive or a collision loss?

Is Comprehensive Coverage "All Risk" or Named Perils?

PAP physical damage consists of two coverages: Collision and Other Than Collision (OTC), the latter commonly referred to as 'comprehensive' coverage. Included in the definition of OTC is a list of perils. The question is, are these perils all inclusive (i.e., is this named perils coverage) or is OTC provided on an 'all risks' basis so that coverage includes, but is not limited to, these perils?

Is It Comp or Is It Collision?

Not infrequently, an auto suffers a physical damage loss. There's no question that the loss is covered...the only issue is whether the loss is covered as a collision or an other-than-collision (comprehensive) loss. In this article, we'll examine several 'Ask an Expert' claims, and we'll show a simple (if incomplete) solution to this problem.

PAP Annotated Part D - Coverage for Damage to Your Auto: Appraisal

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at Part D: Appraisal.

PAP Annotated Part D - Coverage for Damage to Your Auto: Collision and Other Than Collision Defined

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at the Part D Insuring Agreement - Collision and Other Than Collision Defined.

PAP Annotated Part D - Coverage for Damage to Your Auto: Insuring Agreement - Coverage

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at the Part D Insuring Agreement - Coverage.

PAP Annotated Part D - Coverage for Damage to Your Auto: Insuring Agreement - Insureds

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at the Part D Insuring Agreement - Insureds.

PAP Annotated Part D - Coverage for Damage to Your Auto: Limit of Liability

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at Part D: Limit of Liability.

PAP Annotated Part D - Coverage for Damage to Your Auto: No Benefit to Bailee

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at Part D: No Benefit to Bailee.

PAP Annotated Part D - Coverage for Damage to Your Auto: Non-Owned Autos Defined

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at the Part D Insuring Agreement - Non-Owned Autos Defined.

PAP Annotated Part D - Coverage for Damage to Your Auto: Other Sources of Recovery

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at Part D: Other Sources of Recovery (Other Insurance).

PAP Annotated Part D - Coverage for Damage to Your Auto: Payment of Loss

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at Part D: Payment of Loss.

PAP Annotated Part D - Coverage for Damage to Your Auto: Transportation Expenses

Coverage for Damage to Your Auto, commonly referred to as physical damage coverage, began near the turn of the century as a form of inland marine insurance that was later packaged with other lines of insurance. In this section, we'll look at the Part D Transportation Expenses.

PAP Coverage for Detached Auto Equipment

The insured owns a jeep with a removable top. During a period of warm, dry weather, he took the top off and stored it in a shop building. The building burned down, destroying the top. The adjuster and the claims superviser said there is no coverage on the top because the intent of the policy is to only cover equipment while it is on the jeep. Do you agree?

PAP Coverage for Removing a Tree from an Auto

A huge tree falls onto a car covered under the insured's 2005 ISO PAP. The PAP includes Other Than Collision coverage. The cost to remove the tree is $1,800. Is the cost to remove the tree from the vehicle considered part of the loss and covered by the policy?

PAP Coverage for Valet Parking

Normally, the PAP covers permissive users. However, there is an exclusion for anyone 'employed or otherwise engaged in the 'business' of...Parking...vehicles designed for use mainly on public highways.' So, does the PAP provide coverage for valet parking at a restaurant or hotel? Let's complicate things...how about valet parking of a rental car?

Protect Your POLICY from Further Damage?

The named insured's daughter ran over an object, damaging the transmission pan. By continuing home, the transmission was further damaged and the insurer refused to pay the additional damage, citing her failure to 'protect your property from further damage,' as required by the policy. We believe this is too restrictive an interpretation.

Stated vs. Agreed Amount

An insured has an antique or specialty auto that you insure on a 'stated' amount. That means that, if the vehicle is destroyed by a covered peril, your insured will collect the stated value, right? The same insured has personal property that you've scheduled on the HO-61 endorsement. If that property is destroyed by a covered peril, your insured will collect the scheduled amount, right? Speaking of limits, if you agree with these statements, then you'd better check your E&O limits!

The Mechanical Breakdown Exclusion - Revisited

In November 1999, we published an article entitled 'Mechanical Breakdown Exclusion.' Since that time, we have continued to get 'Ask an Expert' questions involving claims where coverage was denied by citing this exclusion in personal and commercial lines auto and property policies. In this article, we'll take another look at the issue.

The PAP and Shopping Cart Claims

Your insured reports a dent or scratch on his/her auto apparently from a merchandise cart at a shopping center parking lot. Would this be covered as a simple collision or could it be paid under comprehensive coverage as caused by an act of vandalism or a windstorm-blown cart? The difference could be hundreds of dollars in deductibles or future premium charges.

The Total(ed) Boar

Some claims make good fodder for our ACE Insura, Claims Detective series. However, we couldn't wait for ACE to tackle this one. In this claim, a wild boar ran in front of an insured's auto, resulting in an accident that injured a passenger. The insurer denied the claim. Can you imagine why? If not, keep reading and find out why insurance is NOT boaring!

Tire Blowouts...Excluded?!

Your insured had a tire blowout. The tire came apart and the tread came up into the fender housing, damaging it, the hood, and part of the firewall. The adjuster denied the claim on the basis that blowouts aren't covered. Do you agree? If so, why? If not, what is the basis for coverage and is it a comprehensive or collision claim?

Wear and Tear and the Personal Auto Policy

Rain water entered an insured's camper trailer during a rain storm. Apparently the seals on the roof of the trailer had deteriorated and water leaked into the interior, causing damage to the ceiling, walls, and cabinets. The insurer has denied the claim based on the 'wear and tear' exclusion in the policy. Do you agree?

What Happens When an Auto is Recovered...30 Years Later?

In 1973, the insured had a 1967 Chevy Corvette stolen. It was reported to the police and the insurer paid $2,500 for the claim. The car was recovered last October, completely stripped. The police called the insured and released the car to him. The insured sold the car to a friend who restores Vettes. The insurer now wants the insured to reimburse them for $14,000, the current value of the car. The insured wants to reimburse the carrier the $2,500 paid over 30 years ago. Who's correct?

When Company Cars ARE Covered

We all know that the ISO PAP does not, in general, cover the use of a company car, though some coverage can be added by endorsement. However, what if a family member hits another family member's company car while operating the family car? Does the exclusion apply?

When Owned Autos Collide...Two Deductibles?

An insured backed one of her vehicles into another one. Both are insured under the same PAP for the same $1,000 deductible amount. The insurer's claims department set up two separate claims and is charging two deductibles. The policy appears to clearly state only one deductible applies, but the adjuster says their 'procedures' require two deductibles.

Who is an Insured for Physical Damage?

A couple divorce, the wife moves out, and, although her auto is declared on the policy, she is not a named insured. Does she have physical damage coverage? (Note: One court says NO.) Or, your resident child's car is titled in her name, but declared on your policy. Does she have physical damage coverage? (Note: One adjuster says NO.)

Who is Insured for Physical Damage?

The ISO Personal Auto Policy defines 'insured' in each coverage part of the policy except for physical damage. If an 'insured' (with regard to liability, medical payments or uninsured motorists coverage) violates a policy condition, does it affect the named insured? This article will examine one such situation.

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