Even though it’s your check that gets mailed to the insurance company, your PAP potentially covers many other people, ranging from your nearest and dearest to lots of folks you’ve never met. Depending on your living situation, the following individuals are covered under your policy.
Named Insured
Your PAP is a written contract between you and your insurance company. The policy’s Declarations Page contains factual information concerning you (as the owner of the policy), the vehicles covered by the policy, and other identifying features. One section of the Declarations Page identifies you as the named insured (meaning the individual who is primarily insured under the policy). As the named insured, you and your vehicles receive the most extensive coverage under your policy. This means you are fully covered by your PAP for liability and uninsured motorist coverage for the vehicles you own or use but don’t own. You are also fully covered by medical payments coverage when you are struck by a vehicle as a pedestrian or when you’re occupying any vehicle. The vehicles you own, acquire, borrow, and rent are also covered by your PAP’s physical damage coverage (another name for Part D, Coverage for Damage to Your Auto).
Tip: The Declarations Page of your policy can also identify your spouse as a named insured. If you wish to identify a relative or another resident of your home as a named insured you must add an endorsement to your policy.
Spouses
Your spouse is entitled to receive the same extensive coverage as you (the named insured) under your policy if he or she lives with you, even if he or she is not identified as a named insured on the Declarations Page of your policy.
This means your resident spouse is fully covered by your PAP for liability and uninsured motorist coverage for the vehicles he or she owns, or uses but doesn’t own. Your spouse is also fully covered by medical payments coverage when struck by a vehicle as a pedestrian or when occupying any vehicle. The vehicles your spouse owns, acquires, borrows, or rents are also covered by your Pap’s physical damage coverage.
Family Members
Family members (as defined in your policy) are insured by your PAP as long as they own, use, or maintain the vehicle involved in the accident. In fact, family members receive almost the same extensive coverage that you do. They are fully covered by your policy for liability and uninsured motorist coverage for the vehicles they own or use but don’t own. They are also fully covered by medical payments coverage when they are struck by a vehicle as a pedestrian or when they’re occupying any vehicle. The difference in coverage shows up in Part D, Physical Damage Coverage. Family members are covered by physical damage coverage under your PAP for the vehicles you own, acquire, borrow, and rent, and for the vehicles they borrow and rent. They are not covered by physical damage coverage for the vehicles they own or acquire.
Other People
If your covered auto is involved in an accident, other people are insured under the liability, uninsured motorist, and medical payments coverages of your policy if:
- They were using the covered auto (liability coverage).
- They were occupying the covered auto (uninsured motorists and medical payments coverages).
- They are legally responsible for the actions of any other person insured under the policy (Liability Coverage), such as employer/employee and parent/minor child relationships. This applies to both people and organizations.
- They are entitled to recover due to any bodily injury suffered by you, your resident spouse, family member, or anyone using the covered auto (uninsured motorists coverage). This usually applies to spousal and parent/child relationships.
If a vehicle other than a covered auto is involved, other people and organizations are insured under your policy as long as:
- They are not the vehicle’s owner and they are legally responsible for the actions of any other person insured under the policy (liability coverage)
- They are entitled to recover due to any bodily injury suffered by you, your resident spouse, or relative (uninsured motorists coverage)
Tip: Your PAP does not provide coverage for anyone who uses a vehicle without the reasonable belief they are authorized to do so. This means car thieves and hijackers are not covered by your policy. The following table should give you a sense of the variety of people who may be covered by your PAP in any given situation:
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You
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Your Resident Spouse
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Your Resident Relatives
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Other People and Organizations
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||
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Liability
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Covered Vehicle
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Yes
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Yes
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Yes
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Yes, if using the covered vehicle or legally responsible for an insured
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Other Vehicle
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Yes
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Yes
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Yes
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Yes, if they don’t own the vehicle and are legally responsible for an insured
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|
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Medical Payments
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Covered Vehicle
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Yes*
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Yes*
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Yes*
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Yes, if they were injured while occupying the covered vehicle
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Other Vehicle
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Yes*
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Yes*
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Yes*
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No
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Uninsured Motorist
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Covered Vehicle
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Yes
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Yes
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Yes
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Yes, if they occupy the covered auto or can recover for an insured
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Other Vehicle
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Yes
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Yes
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Yes
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Yes, if they can recover for an insured
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Physical Damage
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Covered Vehicle
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Yes
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Yes
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Yes
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Yes
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Other Vehicle
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Yes, for rented or borrowed vehicles
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Yes, for rented or borrowed vehicles
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Yes, for rented or borrowed vehicles
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No
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*When the individual is injured by a vehicle while a pedestrian or while occupying the vehicle in question
Caution: The answer to the question “Who is covered” isn’t the entire story when you’re trying to figure out whether your PAP applies to a particular situation. It’s possible that your policy will not apply to a person, vehicle, or injury that otherwise appears to be covered. That’s because every part of your policy contains exclusions from coverage.
Next week we’ll delve into what you are covered for. In the meantime, if you have questions, contact the Experts at Henssler Financial: experts@henssler.com or 770-429-9166.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
