PP 03 07–TRAILER/CAMPER BODY COVERAGE

(September 2024)

There are segments of the private passenger auto market which have coverage needs that are unmet by the basic (unendorsed) Personal Automobile Policy (PAP). One unprotected segment includes persons who add features to their vehicles in order to make them their own. Because of coverage limitations in the basic auto policy, such insureds must buy additional coverage for the features that help make their vehicles more like home. The PP 03 07 endorsement is one source of protection.

The Schedule

The PP 03 07 form includes a schedule that has spaces for the following:

· Descriptions of the covered auto(s)

· Limits for all of the covered property

· Deductibles applying to the additional coverage

· The coverage premiums

Analysis

The PAP is amended to provide insurance for covered property by eliminating exclusion 7. under Part D - Coverage for Damage to Your Auto. Property eligible for protection under this form includes a trailer body or camper, awnings, cabanas and other equipment that is used to create additional living facilities. Other examples of covered property include canopies, small tents and similar structures.

Note: Eligible covered property that is not the trailer or camper body qualifies for coverage only as long as it is either attached to or is in a covered auto. Further, the property has to be joined to, or contained within, a vehicle that is described in the endorsement’s schedule.

The limit of liability that appears for Collision and Other Than Collision does not guarantee that the full limit is available for loss. The form’s notice makes the coverage situation clearer by stating that it does not provide protection on an agreed value basis.

The insured, agent or underwriter should make certain to document the value of all items protected under the form. The total protection selected must reflect the value of the covered property. If this precaution is ignored, the property owner could be substantially underinsured in the event of a total loss.

Example: Rita Nazcar owns a ’15 Luxurion (SUV). The vehicle is covered for liability and physical damage by a PAP that is modified by a PP 03 07 Endorsement. The schedule on the form includes the following information:
Schedule
Description of Vehicle	Collision Limit	Other Than Collision Limit	Premium (Coll/OTC)
2019 Luxurion VIN ABCDXXIINNA	$7,500 Less $250 Deductible	$7,500 Less $250 Deductible	$110/$125
Rita has the following property attached to or kept in her SUV:
Covered Property	Cost New
Custom made “Road Sheik” cabana trailer	$9,000
Built-in “Hyway Sleeper” bed	$1,750
Hyway Sleeper Mattress	$325
Luxury Pillows	$240
“Track Queen” Portable Grill	$400
“Trak Lounger”	$225
Total	$11,940
A couple of weeks ago, while leaving a campsite, Rita made a turn too quickly. The cabana swung out and was smashed to pieces when it slammed against a parked, bus-sized RV. While Rita had kept the receipts for most of her property, she did not have any documentation for the trailer. It had been customized especially for her. Her insurer could only find cost information on “stock” trailers and, after adjusting for a year’s depreciation, resulted in a settlement of less than $3,500. When Rita complained that she had more than $7,000 coverage on her endorsement, the adjuster responded that she was obligated to prove the value of each piece of covered property and that her settlement was the maximum they would offer.

Limit of Liability

This form contains its own section that supplants the one found in the PAP. The maximum amount of coverage that applies to “covered property” is the smallest amount among the following options:

· The limit shown in the endorsement’s schedule

· The Actual Cash Value (ACV) of the property that is lost, damaged or destroyed

· The amount needed to repair or replace the property with similar property

Of course, any loss settlement option is also subject to the deductible. Note that the form has a separate deductible that applies to collision and other than collision. The PP 03 07 deductibles do not have to match any other policy deductibles.

Should a loss be settled by repairing or replacing the covered property and it results in enhancing the insured’s position, the amount of the betterment is not covered.

Example: A pickup truck was hit by another car and the pickup had a tent that was destroyed in the crash. The tent had an original value of $800, an ACV of $500 and it would cost $1,000 to replace the tent. The adjuster was able to find a similar tent for $750. However, the insured was responsible for the betterment value of $250 ($750 minus $500, the tent's ACV).

The Form Does Not Cover

The endorsement does not cover any losses involving clothing, luggage or commercial property. Specifically, no coverage exists for business equipment, sales samples, office equipment or display materials which may be used in exhibitions, conventions, etc.

No protection is granted to furnishings or equipment that are barred from coverage under the base PAP’s physical damage section exclusions 4,5,9 or 10. Further, loss caused by fungi, rot, or bacteria is also ineligible.

Rating

A flat rate applies to the coverage provided under this form. Both the amount of coverage and the premium charge for “Coverage For Damage To Your Auto” appear in the endorsement’s schedule. The actual charges vary by company.