Commercial Automobile and Personal Auto Insurance
Automobile coverage splits into personal auto and commercial auto, and the exam tests the parts of each policy, who and what is covered, and how limits interact with financial responsibility and no-fault laws.
Personal auto policy parts
- Part A Liability (bodily injury and property damage to others); Part B Medical Payments; Part C Uninsured/Underinsured Motorists; Part D Damage to Your Auto, split into collision and other-than-collision.
- Covered autos include the declared auto, a newly acquired auto subject to notice rules, a temporary substitute, and a non-owned auto in limited situations.
- The business-use exclusion removes coverage for delivery, livery, or business use, with limited exceptions such as carpooling.
Commercial auto
- Covered-auto symbols define the universe: symbol 1 (any auto), 7 (specifically described autos), 8 (hired autos), 9 (non-owned autos).
- Symbols 8 and 9 fill gaps when employees drive rentals or their own cars on company business.
- Garagekeepers covers customers' vehicles in the insured's care; motor carrier forms add cargo and trailer interchange.
Limits and laws
- Split limits read as per person / per occurrence / property damage, e.g., 100/300/50.
- A combined single limit provides one amount for all damages from one accident.
- No-fault states pay personal injury protection regardless of fault and restrict tort claims by threshold; UM/UIM responds when the at-fault driver has no or insufficient insurance.
Worked example
Three people are injured in a crash caused by an insured carrying 100/300/50 limits. Claimant 1 has $140,000 in damages and receives the $100,000 per-person cap. Claimants 2 and 3 have $90,000 each and are paid in full. Bodily injury payments total $280,000, inside the $300,000 per-occurrence limit. Property damage of $60,000 is paid only up to the $50,000 property damage limit.
Traps that cost marks
- Assuming the per-person limit is available to every claimant without a per-occurrence ceiling.
- Believing a personal auto policy covers delivery or rideshare driving.
- Forgetting that hired and non-owned coverage requires the correct symbol.
- Ignoring no-fault thresholds before evaluating a tort claim.