Summary: Few businesses have had the special attention from insurers as have those dealing with automobiles. Most businesses are offered general forms to adapt to their particular liability, automobile, and property coverage needs, but automobile dealerships have long been accustomed to insurance forms especially designed for their use. The reason for this is that no other businesses have their premises and operations or property exposures so closely intertwined with automobiles. Consequently, the separation of exposures that is suitable to the insurance needs of others is not adequate for those in the automobile business.
In the area of liability insurance, auto or other, a "standard" form for garage liability insurance has been offered since 1935. The previous garage coverage form was CA 00 05 03 10. In its revamp of the commercial auto program, the Insurance Services Office introduced the auto dealers coverage form, CA 00 25 10 13. CA 00 25 is similar to CA 00 05 in that it can be completely adequate to cover the insured's needs for automobile liability, premises and operations liability, contractual liability, and products and completed operations liability insurance.
CA 00 25 is expected to replace CA 00 05 for the insured's garage-type coverage needs. This and other articles pertaining to the auto dealers coverage form will present an analysis of CA 00 25, revising the language of the coverage form where it differs from that of CA 00 05 (although the differences are not that extensive).
Topics Covered:
The auto dealers coverage form has a declarations page (dec page), CA DS 26 10 13 and a unified set of provisions with all the agreements that pertain to liability (premises and operations, contractual, products, and auto), garagekeepers, and automobile physical damage coverages. Medical payments agreements—premises, auto, or both—are added when wanted by endorsement.
The auto dealers coverage form, with declarations and any endorsements, may be combined with a common conditions form (see Common Policy Conditions) for a monoline policy. Or, auto dealers coverage can be combined with other commercial coverages in the package system offered by ISO.
A. DESCRIPTION OF COVERED AUTO DESIGNATION SYMBOLS
21 = ANY "AUTO".
22 = OWNED "AUTOS" ONLY. Only those "autos" you own (and for Covered Auto 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 Covered Auto 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 in Item Seven of the Declarations for which a premium charge is shown (and for Covered Auto Liability Coverage any "trailers" you don't own while attached to a power unit described in Item Seven).
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", partners (if you are a partnership), members (if you are a limited liability company), or members of their households.
29 = NON-OWNED "AUTOS" USED IN YOUR AUTO DEALERSHIP. Any "auto" you do not own, lease, hire, rent or borrow used in connection with your auto dealership 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 auto dealership.
30 = "AUTOS" LEFT WITH YOU FOR SERVICE, REPAIR, STORAGE OR SAFEKEEPING. Any land motor vehicle, trailer or semitrailer lawfully within your possession for service, repair, storage or safekeeping, with or without the vehicle owner's knowledge or consent. This also includes autos left in your care by your "employees" and members of their households who pay for the services performed.
31 = AUTO DEALERS "AUTOS" (PHYSICAL DAMAGE COVERAGES). Any "autos" and the interests in these "autos" described in Item Six of the Declarations.
Analysis
These are the various symbols that the insured selects in order to designate which autos are "covered autos" for the 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 a "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. (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 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 under this symbol 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 seven of the declarations. The schedule should be amended whenever there is a change in the vehicles that the insured wishes to be covered under symbol 27.
"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.
"29″ — nonownership liability insurance. See Nonownership Liability Insurance. Insureds with symbol "21″ for liability insurance have automatic nonownership liability coverage. Others need to use symbol "29″ to include the auto dealership 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 dealership services).
"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 six 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.
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