PP 03 13—EXCESS ELECTRONIC EQUIPMENT COVERAGE

(September, 2018)

The Personal Auto Policy contains exclusion 4. under Part D – Coverage for Damage to Your Auto. It excludes all loss for most electronic equipment in an auto. There is one exception. If the equipment is permanently installed in the auto, the equipment is covered. There is one catch. If the equipment is installed in the auto but not in a location specifically designed by the auto manufacturer for the equipment, the equipment is covered for no more than $1,000. The PP 03 13 allows the customer to purchase coverage in excess of that limitation.

The Schedule

The form includes a schedule that allows for information on up to three vehicles including:

· Vehicle description

· Amount of coverage for audio, visual and data electronic equipment

· $200 limit for related media

· The accompanying premiums

Insuring Agreement

This endorsement protects against the accidental loss to equipment that handles audio, visual, or data signals. The coverage is not for an original manufacturer’s equipment whose only purpose is to reproduce sound. The endorsement is designed to protect more versatile equipment or equipment that is located in a place other than the spot intended by the carmaker. Examples include (but are not limited to) CB radios, telephones, two-way mobile phones, scanners, TVs, personal computers, game systems, satellite dishes, global position systems, and DVD systems. These examples are not exhaustive, since a pair of bass speakers mounted in the bed of a dual-axle Ford would also be eligible for coverage. The arrival of new electronic products (such as navigational equipment and permanently mounted cameras) for use with or in cars affects the applicability and breadth of coverage under the PP 03 13 endorsement.

In order to qualify for coverage, the equipment has to be a permanent component of a covered vehicle. The endorsement’s coverage also provides up to $200 coverage for any related accessories or media. To qualify for coverage, the accessories or media must be used with the electronic equipment that is specifically described in the endorsement’s schedule. Such property also has to be owned by the insured or a “family member.”

Example: George Flamepath exits his house in Tucson, AZ to discover that the old cactus that stood next to his driveway is now lying down on his SUV’s roof. The in-dash gaming system was destroyed along with most of the vehicle’s interior cabin. While George’s auto policy is endorsed by the PP 03 13, it’s for naught since the system belongs to his nephew, Percy. Percy lives in another household, so the system is not covered.

No deductible applies to media, tapes, records and discs protected by this endorsement. However, the property has to be in or upon a covered vehicle at the time of loss.

What Is Not Covered

The PP 03 13 endorsement has its own Limit of Liability provision that, for the purposes of this coverage, supersedes the PAP provision under Part D - Coverage For Damage To Your Auto. The total available coverage for a loss to the described property is the limit shown in the endorsement’s schedule ($200 for media), the lost property’s actual cash value, or the cost of repairing or replacing the covered property; whichever is the insurer’s most economical option.

All settlements include an adjustment for depreciation. If repairing/replacing the property results in enhancing the value of the property, the insured is financially responsible for the difference.

Example: Insured A’s custom installed rear view camera is demolished during a collision at an intersection. The camera’s depreciated value is $1,073. However, the cheapest available alternative for the insurance company is replacing it with a 6-month model worth $1,295 (since the replacement cost would be $1,640 and repairs would cost $1,382). Insured A would have to pay the difference ($1,295 – $1,073 = $222 additional cost to insured).

This form no longer contains a reference that, to be effective, it must be attached to a base PAP with a change of endorsement form. (09 18 Change.)