Auto insurance methodology

Personal Auto Policy (PAP) structure

U.S. personal auto coverage is overwhelmingly written on the ISO Personal Auto Policy (PAP) form, with state-mandated overlays. The standard parts:

• Part A — Liability (bodily injury + property damage to others)
• Part B — Medical payments (your medical costs, no-fault on schedule)
• Part C — Uninsured / Underinsured Motorists (UM/UIM)
• Part D — Coverage for damage to your vehicle (Comprehensive + Collision)
• Part E — Duties after an accident or loss
• Part F — General provisions

State minimums vs operator-grade defaults

Every state mandates minimum liability limits, expressed as BI-per-person / BI-per-accident / PD (e.g., 25/50/25 = $25K BI per person / $50K per accident / $25K property damage). State minimums are almost universally inadequate — average serious-accident bodily-injury claims meaningfully exceed $50K, and state minimums leave the at-fault driver personally liable for the gap.

Operator-grade default we use as the starting recommendation: 100/300/100 minimum for any household with measurable assets, scaled up to 250/500/250 where umbrella underwriters require it. Most umbrella carriers require either 250/500/250 or 100/300/100 underlying — verify before quoting.

Uninsured / underinsured motorist (UM/UIM)

UM/UIM is the coverage that pays YOUR medical and BI claims when the at-fault party is uninsured or carries inadequate limits. Roughly 1 in 8 drivers nationally is uninsured (Insurance Research Council estimate; varies meaningfully by state). State law on UM/UIM varies enormously — some states make it mandatory, some make it opt-out, some allow stacking across vehicles. We size UM/UIM to match underlying liability limits in most cases.

Comprehensive vs collision

Collision covers damage to your vehicle from impact with another vehicle or object. Comprehensive covers everything else (theft, vandalism, weather, animal strike, falling objects, glass). Both are optional once the vehicle is paid off (lenders mandate both during the loan). Standard advice: drop collision once the vehicle's ACV is below ~10× the annual collision premium; keep comprehensive longer because it's cheaper and covers low-deductible scenarios (windshield replacement) that recur.

Sources (preview — full sourcing lands with the calculator)

• ISO Personal Auto Policy form (PAP)
• State DOI bulletins (per-state minimum limits and UM/UIM rules)
• NAIC Auto Insurance Database Report (annual)
• Insurance Research Council — uninsured-motorist estimates
• III auto insurance research briefs