Declarations

Garage Declarations

Item One

Named Insured _____________________________________________________________

Form of Business:

[] Corporation

[] Partnership

[] Limited Liability Company

[] Individual

[] Other _______________________________________________________________

Item Two

Schedule of Coverages and Covered Autos

This policy provides only those coverages where a charge is shown in the premium column below. Each of these coverages will apply only to those “autos” shown as covered “autos.” “Autos” are shown as covered “autos” for a particular coverage by the entry of one or more of the symbols from the Covered Auto Section of the Garage Coverage Form next to the name of the coverage. Entry of a symbol next to Liability provides coverage for “garage operations”.

Analysis

The declarations page, only a portion of which is shown above, discloses elementary information identifying the named insured, the form of business operation, and policy dates.

For garage insureds, the dec page ([IDL:CA DS 09] ) is also the place where various numerical symbols are entered to identify the covered autos categories relating to specific elements of policy protection.

This part of the declarations and page one of the coverage part need to be studied in combination. Page one (in the ISO model) is where the covered auto designation symbols that are to be used are described. Symbol 21, for example, might be entered in the COVERED AUTOS column opposite LIABILITY to indicate that the liability coverage of this policy applies to “any auto.”

The dec page displays the limits and applicable premiums, and identifies the forms and endorsements on which the policy coverage is based at inception. Note that the premium is an estimated premium which can be changed depending on the audit of the exposures that the insurer carries out at the end of the policy period.

The estimated premium is based on the exposures that the named insured told the insurer existed when the policy began, most probably not the same as the exposures that develop during the term of the policy. Units of liability exposure for dealers are measured in terms of numbers of employees, what each does in categories relating to garage operations and auto exposure, and the exposure of autos furnished to people who do not have an active role in the business. Physical damage premiums reflect a dealer's fluctuating inventory.

The final premium is computed at the end of the policy period, based on an audit of actual exposures. Final adjustment is to be with the first party named as insured (excess premium will be returned or additional premium will be billed to the first named insured). The audit may be a formal affair conducted by outsiders or a voluntary report or reports solicited from the insured; the insurance company decides which path to follow. Furthermore, in accordance with the common policy conditions, the insurance company has the right to examine the insured's records for this purpose at any time within three years after the expiration of the policy.

Symbols for Covered Autos

A. DESCRIPTION OF COVERED AUTO DESIGNATION SYMBOLS

21 = ANY “AUTO”.

22 = OWNED “AUTOS” ONLY. Only those “autos” you own (and for Liability Coverage any “trailers” you don't own while attached to power units you own). This includes those “autos” you acquire ownership of after the policy begins.

23 = OWNED PRIVATE PASSENGER “AUTOS” ONLY. Only the private passenger “autos” you own. This includes those private passenger “autos” you acquire ownership of after the policy begins.

24 = OWNED “AUTOS” OTHER THAN PRIVATE PASSENGER “AUTOS” ONLY. Only those “autos” you own that are not of the private passenger type (and for Liability Coverage any trailers you don't own while attached to power units you own). This includes those “autos” not of the private passenger type you acquire ownership of after the policy begins.

25 = OWNED “AUTOS” SUBJECT TO NO-FAULT. Only those “autos” you own that are required to have No-Fault benefits in the state where they are licensed or principally garaged. This includes those “autos” you acquire ownership of after the policy begins provided they are required to have No-Fault benefits in the state where they are licensed or principally garaged.

26 = OWNED “AUTOS” SUBJECT TO A COMPULSORY UNINSURED MOTORISTS LAW. Only those “autos” you own that because of the law in the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorists Coverage. This includes those “autos” you acquire ownership of after the policy begins provided they are subject to the same state uninsured motorists requirement.

27 = SPECIFICALLY DESCRIBED “AUTOS”. Only those “autos” described inItem Nine of the Declarations forwhich a premium charge is shown (and for Liability Coverage any “trailers” you don't own while attached to a power unit described in Item Nine).

28 = HIRED “AUTOS” ONLY. Only those “autos” you lease, hire, rent or borrow. This does not include any “auto” you lease, hire, rent or borrow from any of your “employees” or partners or members of their households.

29 = NON-OWNED “AUTOS” USED IN YOUR GARAGE BUSINESS. Any “auto” you do not own, lease, hire, rent or borrow used in connection with your garage business described in the Declarations. This includes “autos” owned by your “employees” or partners (if you are a partnership), members (if you are a limited liability company), or members of their households while used in your garage business.

30 = “AUTOS” LEFT WITH YOU FOR SERVICE, REPAIR, STORAGE OR SAFEKEEPING. Any customer's land motor vehicle or trailer or semitrailer while left with you for service, repair, storage or safekeeping. Customers include your “employees” and members of their households who pay for the services performed.

31 = DEALERS “AUTOS” (PHYSICAL DAMAGE COVERAGES). Any “autos” and the interests in these “autos” described in Item Seven of the Declarations.

Analysis

These are the symbols among which the insured selects in order to designate which autos are “covered autos” for purpose of the various coverages. They are complex and require deliberation in selecting. It is important to know that an “auto,” according to the policy's definition, is any “land motor vehicle, trailer or semitrailer.” Thus, symbol 21 signifying “any auto” and used to signal liability coverage means that any vehicle operated under motor power and on land — moped to 16-wheeler — is covered for liability, all things else being equal.

“21″ — “any auto.” Automobile dealers, needing a broad scope of liability insurance for all the varieties of auto exposure common to their business, can use this symbol. With symbol “21″ applicable to liability coverage, the named insured dealer has insurance for owned autos of any type, customers' and employees' autos, hired autos, and autos in the insured's care or on consignment, etc.

“22″ — owned autos only. (Except nonowned trailers are automatically covered for liability insurance whenever attached to an owned auto.) All references to “owned auto” include any acquired after policy inception.

“23″ — owned private passenger autos only.

“24″ — only those owned autos that are not private passenger autos. Nonowned trailers are covered for liability insurance whenever attached to an owned “power unit.”

“25″ — no-fault automobile insurance, or “personal injury protection.” The coverage agreement is added to the policy by endorsement when required. (See No-Fault Automobile Insurance .) The symbol's description is such that, if the insured operates in two states, only one of which requires no-fault protection, then the covered autos are “only those autos you own that are required to have no-fault benefits in the state where they are licensed or principally garaged.”

“26″ — compulsory uninsured motorists coverage. Similarly to the way “25″ relates to no-fault protection, the uninsured motorists coverage symbol is used when the law in the state where the autos owned by the named insured are licensed or principally garaged requires uninsured motorists coverage.

“27″ — specific autos. Specific covered autos are described in item nine of the declarations, and this section of the declarations also schedules covered autos that are furnished to someone other than a class I or Class II operator. As an example of this symbol's use, a dealer insured might furnish a car to a school driver training program. That exposure is rated separately from the exposure of automobiles in the usual garage operations. The car is described in the declarations and rated for the applicable coverages. The schedule should be amended whenever there is a change in the vehicles of the schedule.

“28″ — hired auto liability insurance. See Insuring Hired and Borrowed Autos . Insureds with symbol “21″ for automobile liability coverage have hired auto protection included automatically. Otherwise, this symbol must be used to trigger liability protection for the use of leased or borrowed autos — on an “if any” basis if none are leased or borrowed at the time the policy is written but the potential future exposure exists. Autos owned by partners, employees and household members of either are not included in this category. See symbol “29″ next.

“29″ — nonownership liability insurance. See Nonownership Liability Insurance . As just above, insureds with symbol “21″ for liability insurance have automatic nonownership liability coverage. Others need to use symbol “29″ to include the garage business use of autos that are owned by employees, by partners, members of a limited liability company, or by members of their households.

“30″ — garagekeepers insurance. This covers the insured's responsibility for damage to customers vehicles left with the named insured for service, repair, storage, or safekeeping (customers include employees and members of their households who pay for the garage services); see Garage Liability Section III .

“31″ — physical damage insurance on consigned autos and dealers' autos. This symbol is for any autos and the interests in those autos (whether the named insured's interests, loss payees' interests, or others) described in item seven of the declarations.

Selecting the appropriate symbols for insureds should be a thoroughly examined process. For example, for dealer insureds, symbol “21″ is used for liability; “25″ and “26″ for personal injury protection and uninsured motorists coverages where appropriate; and symbol “30″ covers a garagekeepers exposure. Accuracy in the selection and in transcribing onto the policy is vital for all parties.

B. OWNED AUTOS YOU ACQUIRE AFTER THE POLICY BEGINS

1. If symbols 21, 22, 23, 24, 25, or 26 are entered next to a coverage in ITEM TWO of the Declarations, then you have coverage for “autos” that you acquire of the type described for the remainder of the policy period.

2. But, if symbol 27 is entered next to a coverage in ITEM TWO of the Declarations, an “auto” you acquire will be a covered “auto” for that coverage only if:

a. We already cover all “autos” that you own for that coverage or it replaces an “auto” you previously owned that had that coverage; and

b. You tell us within thirty days after you acquire it that you want us to cover it for that coverage.

C. CERTAIN TRAILERS AND TEMPORARY SUBSTITUTE AUTOS

If Liability coverage is provided by this Coverage Form, the following types of vehicles are also covered “autos” for Liability Coverage:

1. “Trailers” with a load capacity of 2,000 pounds or less designed primarily for travel on public roads.

2. Any “auto” you do not own while used with the permission of its owner as a temporary substitute for a covered “auto” you own that is out of service because of it's:

a. Breakdown;

b. Repair;

c. Servicing;

d. “Loss”; or

e. Destruction.

Analysis

These provisions deal with “automatic” coverage of newly acquired and temporary substitute autos appropriate to all autos of the type represented by the symbol. If a dealer has liability insurance keyed to symbol “21,” then any auto, owned or borrowed or used in the insured's behalf, is covered. If an insured has liability coverage on owned private passenger autos only, symbol “23,” and the newly acquired, borrowed, etc., vehicle is a truck, there is no automatic liability coverage on that truck.

If symbol “27,” specifically described autos, is entered next to a coverage on the dec page, then coverage of newly acquired units is subject to certain conditions. First, the insurer must already cover all autos that the named insured owns for that particular coverage, or the newly acquired auto must replace an auto that had the particular coverage. Second, the named insured must tell the insurer within thirty days after the acquisition that coverage is desired.

As for temporary substitute autos, the liability coverage provided by the garage form covers any nonowned auto while being used (with the permission of its owner) as a temporary substitute for an owned covered auto out of service because of its breakdown, repair, servicing, loss, or destruction.

Regarding trailers, if liability coverage is provided by the garage form, then liability coverage also exists for trailers with a load capacity of 2,000 pounds or less, owned or not, designed primarily for travel on public roads. This promise is unconditional, independent of the insured status of the towing vehicle.