---
title: "Personal Auto Policy (PAP): What It Covers | Riskado"
description: "A personal auto policy insures a household's private-use cars. See what it pays others, what you choose for your own car, and when business use needs more."
url: "https://riskado.com/insurance-terms/personal-auto-policy/"
lang: "en"
published: "2026-06-21"
modified: "2026-10-01"
image: "https://riskado.com/og/default.jpg"
alternates:
  es: "https://riskado.com/es/terminos-de-seguros/poliza-personal-de-automovil.md"
---

# Personal auto policy

[Auto](https://riskado.com/auto-insurance/) · Updated Oct 1, 2026

A personal auto policy is an insurance contract for the private-use vehicles of an individual or household. It pays liability claims for injuries or damage you cause to others and, if purchased, covers medical costs, uninsured drivers, collision, theft, weather damage, towing or rentals. The declarations page shows what you bought.

Also called: pap, automobile insurance, auto insurance

Your personal auto policy answers two questions after a crash: what the [insurer](https://riskado.com/insurance-terms/insurer/) pays people you injure or whose property you damage, and what it pays for your own car and injuries. [Liability](https://riskado.com/insurance-terms/liability-insurance/) is the part state law requires. Collision, comprehensive, [medical payments](https://riskado.com/insurance-terms/medical-payments-coverage/), rental and towing depend on what you chose, and the [declarations page](https://riskado.com/insurance-terms/declarations-page/) shows what was issued. "Personal" means private use, so delivery, [rideshare](https://riskado.com/insurance-terms/rideshare-insurance/) or other business driving may need different [coverage](https://riskado.com/insurance-terms/coverage/).

## How a personal auto policy pays after a crash

Liability pays up to the limit you bought, and anything above it can become your bill. Using New York's minimums from the [New York Department of Financial Services (opens in a new tab)](https://www.dfs.ny.gov/consumers/auto_insurance/Auto_resource_center), suppose you carry $25,000 per person in [bodily injury liability](https://riskado.com/insurance-terms/bodily-injury-liability/) and $10,000 per accident in [property damage liability](https://riskado.com/insurance-terms/property-damage-liability/), and you cause $18,000 of damage to another car.

An $18,000 property damage claim on a $10,000 limit

Hover or tap a row to highlight it.

| Item | Amount |
| --- | --- |
| Damage to the other car | $18,000 |
| Property damage liability limit | $10,000 |
| Insurer pays, up to the limit | $10,000 |
| Left over ($18,000 minus $10,000) | $8,000 |

You may remain personally responsible for the $8,000, and the other driver can pursue you for it. The $10,000 figure is a legal minimum, not an average claim, and a higher limit raises the most the insurer will pay. Your own car is a separate coverage: with collision, a $2,400 covered repair and a $500 deductible leaves the insurer paying $1,900, subject to the policy's valuation terms, according to the [NAIC consumer guide to auto insurance (opens in a new tab)](https://content.naic.org/sites/default/files/publication-aut-pp-consumer-auto.pdf).

## The choices that change what your policy pays

Liability limits come first. Above New York's minimums, options include $100,000/$300,000 or $250,000/$500,000 for bodily injury and $25,000 or $50,000 for property damage, according to the [New York Department of Financial Services (opens in a new tab)](https://www.dfs.ny.gov/consumers/auto_insurance/Auto_resource_center). Higher limits cost more and raise the maximum payment, and state minimums are usually not enough to fully protect you and your assets, according to the [NAIC (opens in a new tab)](https://content.naic.org/sites/default/files/publication-aut-pp-consumer-auto.pdf).

[Collision coverage](https://riskado.com/insurance-terms/collision-coverage/) pays for crash damage to your car, and [comprehensive coverage](https://riskado.com/insurance-terms/comprehensive-coverage/) pays for theft, fire, flood, hail, vandalism and hitting an animal. State law generally does not require either, but a lender or lessor may; our [comprehensive vs collision guide](https://riskado.com/comprehensive-vs-collision-insurance/) sorts out which losses go where. Common deductibles are $250, $500 and $1,000, according to the [NAIC (opens in a new tab)](https://content.naic.org/sites/default/files/publication-aut-pp-consumer-auto.pdf), and a higher deductible generally lowers the premium while raising your share after a covered loss.

[Uninsured motorist coverage](https://riskado.com/insurance-terms/uninsured-motorist-coverage/) and [underinsured motorist coverage](https://riskado.com/insurance-terms/underinsured-motorist-coverage/) respond when the at-fault driver has no insurance or too little. New York's basic personal injury protection (PIP) is $50,000 per person, and additional PIP can raise that to $100,000 or more, according to the [New York Department of Financial Services (opens in a new tab)](https://www.dfs.ny.gov/consumers/auto_insurance/Auto_resource_center). Rental reimbursement carries a daily and total cap, such as $20 a day up to $600, an example the [NAIC (opens in a new tab)](https://content.naic.org/article/consumer-insight-does-your-vehicle-have-right-protection-best-practices-buying-auto-insurance) uses to show the structure rather than an average. Mileage, garaging location, vehicle, drivers and driving record also affect price, and our guide to the [average cost of car insurance in Connecticut](https://riskado.com/average-cost-of-car-insurance-in-connecticut/) shows how that plays out there.

## Where you see the term

"Personal auto policy" appears on quotes and applications, where the insurer classifies the risk as personal rather than commercial, and on binders, declarations pages, endorsements, renewal notices, claim or reservation-of-rights letters and lender requests for proof of insurance. A commercial auto policy is the usual alternative, built for business-owned vehicles, employees, larger trucks and vehicles carrying goods or passengers, according to the [NAIC (opens in a new tab)](https://content.naic.org/insurance-topics/auto-insurance). Insurers may use their own forms or state versions of the standard ISO Personal Auto Policy, so the wording issued to you is the contract that counts.

## What Connecticut and New York require

Connecticut's minimum is $25,000 per person and $50,000 per accident for bodily injury and $25,000 for property damage, or a $50,000 single limit, under [Conn. Gen. Stat. § 14-112 (opens in a new tab)](https://www.cga.ct.gov/current/pub/title_14.htm), as summarized by the [Connecticut Insurance Department (opens in a new tab)](https://portal.ct.gov/cid/consumer-information-center/auto-insurance). Uninsured and underinsured motorist coverage of at least $25,000/$50,000 is required by [Conn. Gen. Stat. § 38a-336 (opens in a new tab)](https://www.cga.ct.gov/current/pub/chap_700.htm#sec_38a-336), and [Conn. Gen. Stat. § 38a-343 (opens in a new tab)](https://www.cga.ct.gov/current/pub/chap_700.htm#sec_38a-343) generally requires 45 days' notice of cancellation, with shorter periods for specified premium defaults and material misrepresentation.

New York requires financial security for motor vehicles under [N.Y. Vehicle and Traffic Law § 312 (opens in a new tab)](https://www.nysenate.gov/legislation/laws/VAT/312) and first-party no-fault benefits under [N.Y. Insurance Law § 5103 (opens in a new tab)](https://www.nysenate.gov/legislation/laws/ISC/5103). Under [N.Y. Insurance Law § 3425 (opens in a new tab)](https://www.nysenate.gov/legislation/laws/ISC/3425), a policy on a vehicle used mainly for non-business purposes, with a person as named insured, generally gets 45 to 60 days' notice and a stated reason before nonrenewal or a conditional renewal.

## Questions to ask your agent or insurer

1.  Which vehicles, drivers and uses are listed, and is delivery, rideshare, commuting or other business use covered? Personal policies may exclude business activities.
2.  What are my bodily injury, property damage and uninsured/underinsured motorist limits, and what higher limits are available? State minimums can leave you responsible for losses above the limit.
3.  Do I have collision and comprehensive, what deductible applies, and how would a total loss be valued? The deductible and valuation decide the payment for your car.
4.  Does the policy include rental reimbursement, towing, medical payments or PIP, and with what limits? These are separate parts that may not be in the base policy.
5.  What changed at renewal, and why? The new declarations page controls the contract, and our [accident forgiveness guide](https://riskado.com/accident-forgiveness/) covers one renewal factor worth raising.

## Frequently asked questions

These come up once people start reading their own policy.

### What does PAP mean on an insurance policy?

PAP usually stands for Personal Auto Policy or Personal Automobile Policy. It names a personal-use auto contract, while the declarations page, form and endorsements decide what is covered.

### Does a personal auto policy cover a rental car?

It depends on the policy and the situation. Liability may extend to some temporary substitute or rental vehicles, while rental reimbursement after a covered loss applies only if you bought it.

### Will my policy pay off my car loan after a total loss?

Not beyond the car's covered value. Ordinary auto insurance does not pay the gap when the car is worth less than the loan, according to the [NAIC (opens in a new tab)](https://content.naic.org/sites/default/files/publication-aut-pp-consumer-auto.pdf), so you may still owe the lender.

### Is a friend or household member covered when driving my car?

That turns on the policy's permissive-use rules, household-driver requirements and exclusions. Leaving a regular driver off the policy can affect coverage and renewal, so tell the insurer before someone new drives the car regularly.

## Related terms