��

AUTO PHYSICAL DAMAGE COVERAGE

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Adopted as of February 27, 1997

Overview of Coverages for PURMS Risk Pools

The Coverages Sections of the SIA set forth the Insuring Agreements, Exclusions, and other terms and conditions which comprise the Coverages provided by the Fund for the Members of its Risk Pools and, as applicable, their Employees under the SIA.�

The current Liability Coverage provided by the Fund for Members of the Liability Pool includes:� Commercial General Liability (SIA � III, �CGL�); Public Officials & Entity Liability (SIA � IV, �PO&E�); Automobile Liability (SIA � V); and Pollution Liability (� VI). The CGL Coverage was originally adopted on December 20, 1976, has been amended from time to time, and was unanimously re-adopted by the Members on December 7, 2001. The PO&E, Automobile and Pollution Liability Coverages were first adopted effective March 30, 1995. The PO&E Coverage was unanimously re-adopted by the Members on December 7, 2001.

The current Property Coverage provided by the Fund for Members of the Property Pool includes:� General Property Coverage (SIA � X) and Auto Physical Damage Coverage (SIA � XI). Both of these Property Coverages were originally adopted effective February 27, 1997.

Members of the Property Pool may participate in either or both Property Coverages (SIA � X and/or � XI).� Members of the Liability Pool must participate in all Liability Coverages provided by the Fund (SIA � III - VI).

The current Health & Welfare Coverage provided by the Fund for the Members of the H&W Pool is set forth in � XIV. The H&W Coverage was originally adopted on March 16, 2000, effective April 1, 2000, and was amended and restated and unanimously re-adopted by the Members as of December 7, 2001.

These Coverages, as amended from time to time pursuant to � I, � 5.2, are specifically incorporated into the Interlocal Agreement and shall be deemed a part of that Agreement as if fully set forth therein.

AUTOMOBILE PHYSICAL DAMAGE COVERAGE

1. Definitions for Auto Physical Damage Coverage.� The Definitions set forth in the "Definitions" Section of the SIA (see, � II) apply to the interpretation of the Coverage provided by this Auto Physical Damage Coverage Section, except as may be modified specifically or by necessary implication by the Definitions set forth below which are specific to the Auto Physical Damage Coverage contained in this � XI.�

1.1 Accident -- shall mean an unusual, unintended, unexpected and unforeseen happening, including continuous or repeated exposure to the same conditions, that causes Direct Physical Loss or Damage to a Covered Auto arising from the use thereof by a Member (as defined specifically in � XI, � 1.13) and which occurred at a time when the Member requesting the Auto Physical Damage Coverage was a Member of the Property Pool.�

1.2 Actual Cash Value -- shall mean the Replacement Cost less depreciation (see � XI, � 10, Valuation of Auto Loss).

1.3 Auto -- shall mean a land motor vehicle, trailer or semi-trailer designed for travel on public roads, but does not include Mobile Equipment, except for the types of "self-propelled" Mobile Equipment identified in � XI, � 1.14.

1.4 Auto Claim -- shall mean a Property Claim for an Auto Loss.

1.5 Auto Loss - shall mean a Property Loss to a Covered Auto arising from an Accident.

1.6 Auto Loss Amount - shall mean the Property Loss Amount for an Auto Loss.

1.7 Auto Physical Damage Coverage Limit - shall mean the Property Coverage Limit for the General Property Coverage Section (� X) which shall be applied in the manner set forth therein to all Covered Auto Physical Damage Claims and/or to all Covered Property Claims involving Property Loss (including Auto Loss) arising from a single Property Loss.

1.8 Covered Auto -- shall mean:

1.8.1 Owned Autos -- Those Autos owned by a Member including owned private passenger Autos and Owned Autos other than private passenger Autos, and including trailers not owned by the Member but attached to power units the Member does own; provided such property (except for trailers not owned by a Member) constitutes Insured Property (i.e., such property is identified to the Member in the Schedule of Values maintained by the Administrator or is subject to one of the exceptions thereto set forth in � X, �� 3.2.1 and 12.1.1, as Newly Acquired Property, or � 3.2.2, as property inadvertently omitted from the Schedule of Values).�

1.8.2 Hired Autos -- Those Autos that are leased, hired, rented or borrowed by a Member, or by an Employee for the Member's account or by the Employee personally, in connection with PUD Business; provided such property constitutes Insured Property; and subject to the Other Insurance provisions of � XI, � 16.

1.8.3 Non-Owned Autos -- Autos that are not owned, leased, hired, rented or borrowed by a Member, but that are used in connection with the Member's Public Utility Operations; provided such property constitutes Insured Property under � X, � 3.2, as property listed in the Schedule of Values, or �� 3.2.1 and 12.1.1, as Leased Property, or �.3.2.2, as property inadvertently omitted from the Schedule of Values; and, subject to the Other Insurance provisions of � XI, � 16.� "Non-Owned Autos" includes Autos owned by the Member's Employees or members of such Employee's households, but only while used in connection with the Member's PUD Business.

1.8.4 Other Covered Autos -- shall mean:

1.8.4(a)� Trailers --� which have a load capacity of 2,000 lbs. or less designed primarily for travel on public roads, provided such property constitutes Insured Property;

1.8.4(b)� Mobile Equipment� --� while being carried or towed by a Covered Auto, provided such property constitutes Insured Property;

1.8.4(c)� Substitute Autos� -- which means any Auto a Member does not own, while used with the permission of its owner as a temporary substitute for a Covered Auto a Member does own that is out of service because of breakdown, repair, servicing, loss or destruction, provided such property constitutes Insured Property.

1.9 Covered Auto Physical Damage Claim -- shall mean a Property Claim filed with the Administrator by a Member, on behalf of the Member or one or more of its Employees, arising out of an Accident causing Direct Physical Loss or Damage to a Covered Auto, which occurred at a time when the Member requesting Auto Physical Damage Coverage for the Property Claim was a Member of the Property Pool, and for which Auto Physical Damage Coverage is provided by the Fund pursuant to the terms of the Auto Physical Damage Coverage Section (see � XI).

1.10 Direct Physical Loss or Damage -- shall mean destruction of or damage to a Covered Auto as a result of an Accident (see definition of Property Loss, � X, � 1.42, and terms of General Property Coverage set forth in � X, � 4).

1.11 Employee's Auto -- shall mean an Auto owned by an Employee, or a Member of his or her family, which shall be treated as a Non-Owned Auto for purposes of coverage under the Auto Physical Damage Coverage Section.

1.12 Leased Autos -- shall mean Hired Autos and/or Substitute Autos, which shall be subject to Property Coverage as "Leased Property" pursuant to � X, �� 3.2.1 and 12.1.1 and shall be subject to Property Assessments based on their Insured Values as determined for Leased Property in � X, � 3.3.

1.13 Member -- for purposes of � 2 of the Auto Physical Damage Coverage Section, shall mean any person or organization qualifying as a "Member" as follows:

1.13.1 The Member or its Employees, for any Covered Auto (except for an Employee with respect to a Non-Owned Auto);

1.13.2 Any Employee, and members of the Employee's household, while using any Covered Auto, other than a Non-Owned Auto, with the Member's express or tacit permission and in connection with PUD Business,� except the owner or anyone else from whom the Member hired or borrowed a Covered Auto (provided, this exception does not apply if such "owner or anyone else" is an Employee or if the Covered Auto is a "trailer" connected to a "Covered Auto" that qualifies as an Owned Auto);

1.13.3 Any Employee, and members of the Employee's household, if the Covered Auto is owned by that Employee or a member of his or her household or by another Employee of the Member; provided the Employee is using any Non-Owned Auto with the Member's express or tacit permission and such use is in connection with PUD Business; and

1.13.4 Any Third Party, while using a Covered Auto with the express permission of a Member or Employee, but only if such use is in connection with the Member's Public Utility Operations.

1.14 Mobile Equipment -- shall mean any of the following types of land vehicles, including any attached machinery or equipment:

1.14.1 Bulldozers, farm machinery, forklifts, and other vehicles designed for use principally off the public road;

1.14.2 Autos maintained for use solely on or next to Insured Premises owned or rented by a Member;

1.14.3 Autos that travel on crawler tread;

1.14.4 Autos, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:�

1.14.4(a)� Power cranes, shovels, loaders, diggers, or drills; or