The concepts embraced by this definition contained in the ISO personal auto policy are relatively complex. Most of these concepts appear in one form or another in the policies of insurers that do not use the ISO form. Again, check your own policy to confirm whether these provisions are included.
The complexity of the definition reflects the increasing complexity of modern life and reflects insurers' attempts to make clear for their customers what loss exposures are and are not covered. Some of the complexities in this definition also correspond to statutory requirements under states' vehicle and insurance codes.
The first subcategory under this definition is any vehicles shown in the policy's declarations. However, when more than one policy may apply to a particular loss, confusion can occur. Since it is common in the case of auto accidents that more than one policy may apply to the same loss, there are rules for determining which policy applies. Often these rules are statutory, and thus can vary from state to state. An almost universal rule, however, is the rule that states that the policy in which an insured vehicle is specifically rated or described always applies to the loss first.
The next category of covered autos includes private passenger autos, pickup trucks, or vans that have gross vehicle weights of less than 10,000 pounds. This provision has many qualifications. First, the insured must acquire the vehicle during the policy period. Second, the insured must report the acquisition of the vehicle to the insurer within thirty days after the insured acquires it. Third, pickup trucks or vans do not qualify if any other policies afford coverage for those vehicles.
These latter qualifications mean that small installation or repair contractors and farmers who purchase pickups or vans that are comparable to those that people purchase for ordinary personal use can cover their business- or work-related use of such vehicles under their personal auto policy. This is available for those people whose business use is not so extensive as to require a commercial auto policy.
This provision of your auto policy makes clear that you get automatic coverage for newly acquired vehicles. However, such automatic coverage only applies for thirty days and only if you actually report the acquisition to your insurer within the thirty-day period. If you take the responsibility for reporting your acquisition of a new vehicle to your agent, you will minimize the risk of a gap in coverage that could result if the dealership's finance department fails to timely notify your insurer.
There are a couple of other qualifications to this newly acquired auto coverage provision. If the newly acquired vehicle is a replacement for a covered vehicle described in the policy's declarations and you report the new vehicle within thirty days of its acquisition, the coverages that applied to the former vehicle will apply to the newly acquired vehicle. Further, if the new vehicle is a new vehicle in the absolute sense, that is, the vehicle is not replacing an existing vehicle, this new vehicle is automatically covered and it will be covered to the broadest extent of any existing covered vehicle under the policy.
Your covered vehicle also includes any car, truck, or trailer that you rent or use as a temporary substitute vehicle if you are out of your normal vehicle because of: breakdown, repair, servicing, loss or, destruction.
In practical terms, this means that if you borrow or rent a vehicle while your car is unavailable to you because of any of these circumstances, you are covered for use of that substitute vehicle. In other words, if your car breaks down or even is in the shop or dealership for normal maintenance work, you are covered for use of: a friend's or neighbor's vehicle, a rented vehicle or, a loaner vehicle while yours is in the shop.
The definitions of the concepts of your covered auto in proprietary policy forms used by insurers that do not use the ISO personal auto policy form can be more restrictive or more liberal than these definitions. Some insurers place lower gross vehicle weight limits on this coverage, effectively limiting coverage to private passenger cars and effectively excluding most SUVs, vans, and many full-size pick-up trucks. Other companies do not include any sort of gross vehicle weight limitation in the definition of your insured car.
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1. Liability policies include the provision of bankruptcy of the insured
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