Insurance · Auto Insurance

What does Part A (Liability Coverage) of a Personal Auto Policy (PAP) cover?

Correct answer

Bodily injury and property damage the insured is legally liable for from operating an auto, plus defense costs — typically with separate per-person and per-accident limits

  1. A Theft of the vehicle
  2. B Damage to the insured's own car
  3. C Bodily injury and property damage the insured is legally liable for from operating an auto, plus defense costs — typically with separate per-person and per-accident limits
  4. D Medical bills only for the insured

Why this is the answer

Part A — Liability Coverage — of the Personal Auto Policy pays for bodily injury and property damage the insured is legally liable for resulting from operating an auto. Two parts: Bodily Injury Liability (covers injury to others) and Property Damage Liability (covers damage to others' property). Limits are typically expressed as three numbers like '100/300/100' meaning $100,000 per person for bodily injury, $300,000 per accident for bodily injury, $100,000 per accident for property damage. The insurer also pays defense costs (attorney fees and court costs are outside the policy limit). State financial responsibility laws set minimum required limits, which are usually inadequate for serious accidents — most experts recommend $100/300/100 or higher. The PAP also covers other drivers using the insured's vehicle with permission, with some restrictions.
Source: NAIC Model Outline, PAP Part A

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About this topic: Auto Insurance

Auto insurance questions cover the personal auto policy: liability, medical payments, uninsured and underinsured motorist, collision and comprehensive coverages, who is an insured, exclusions and the state's financial-responsibility requirements. This is one of 16 Casualty Insurance questions on auto insurance, each with a full explanation on a single study page.

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