[h] CPCU 552 – Module 5
[q] Auto Dealers Coverage Form (ADCF)
[a] An insurance form that provides both general liability and business auto insurance in a single coverage form to organizations in the business of selling autos, trucks, trailers, recreational vehicles, or mobile equipment.
[q] ADCF covered auto symbols
[a] Symbols 21-29 correspond to symbols 1-9 in the BACF. Symbol 30 signals the covered autos for garagekeepers coverage and symbol 31 signals covered autos for the physical damage coverages.
[q] ADCF coverage symbol 30
[a] A coverage symbol that only applies to the ADCF. This symbol provides garagekeepers coverage.
[q] ADCF coverage symbol 31
[a] A coverage symbol that only applies to the ADCF. This symbol provides coverage for autos and interests in autos described on declarations page.
[q] ADCF covered autos liability coverage
[a] The policy provides coverage for bodily injury or property damage caused by an accident, if the insured is legally liable. The persons insured for covered autos under the ADCF are the same as under the BACF.
[q] Liability exclusions that are unique to the ADCF
[a] Unique exclusions:
Work you performed.
Damage to Impaired Property or Property Not Physically Damaged.
[q] Garagekeepers coverage
[a] Under this coverage, the insurer will pay damages the insured must legally pay for losses while the insured is repairing a customer’s auto.
[q] Direct excess coverage option
[a] A modification to garagekeepers coverage so it applies on a direct coverage basis instead of a legal liability basis. Under this option, coverage applies on a primary basis if the insured is legally liable, and on an excess basis when the insured is not legally liable.
[q] Direct primary coverage option
[a] A modification to garagekeepers coverage so it applies on a direct coverage basis instead of a legal liability basis. Under this option, coverage applies on a primary basis without regard to legal liability and regardless of whether the customer can recover under their own insurance.
[q] Physical damage coverage
[a] Coverage provided for autos on a dealer’s lot. These autos are insured in the aggregate, subject to a single overall limit.
[q] Nonreporting approach
[a] An approach for calculating premiums for physical damage coverage. Under this approach, applicable rates are applied to the policy limits. Example – if a dealer only reports 85% of its actual inventory, the insurer will reduce its payment for any covered loss by 15%.
[q] Reporting approach
[a] An approach for calculating premiums for physical damage coverage. Under this approach, the dealer reports the total values of autos either monthly or quarterly, and the annual premium is based on the insured’s reports.
[q] Physical damage exclusions
[a] ADCF exclusions include BACF physical damage exclusions, plus:
Autos Leased or Rented to Others.
Loss at Unnamed Locations.
Driveaway Collision Exclusion.
Collision of Transporting Conveyance.
[q] ADCF Section II – General Liability Coverages
[a] A section of the ADCF that provides commercial general liability coverages for auto dealers’ business operations.
[q] ADCF Section II – General Liability major coverages
[a] Major coverages:
Bodily injury and property damage liability.
Personal and advertising injury liability.
Locations and operations medical payments.
[q] ADCF covered medical expenses
[a] Covered expenses:
First aid administered at the time of an accident.
Necessary medical, surgical, x-ray, and dental services.
Necessary ambulance, hospital, professional nursing, and funeral services.
[q] ADCF Section III – Acts, Errors, or Omissions Liability Coverages
[a] A section of the ADCF that covers damages the insured must legally pay because of a negligent act, error, or omission arising out of the named insured’s auto dealer operations.
[q] Motor Carrier Coverage Form
[a] A coverage form that can be used to insure a person or an organization providing transportation by auto in the furtherance of a commercial enterprise.
[q] Motor Carrier Coverage Form covered auto symbols
[a] Symbols 61-68 correspond to symbols 1-8 in the BACF. Symbols 69 and 70 are used to cover trailers in the named insured’s possession under written trailer or equipment interchange agreements. Symbol 71 is equivalent to symbol 9 under the BACF.
[a] Individuals who lease themselves and their trucks to motor carriers under a written lease agreement.
[q] Truckers-Insurance for Non-Trucking Use endorsement
[a] An endorsement to the BACF that excludes liability coverage for any covered auto listed in the endorsement while the auto is being used for business purposes.
[q] Trailer interchange agreement
[a] A contract under which two motor carriers agree to swap trailers and to indemnify each other for any damage that occurs to the other’s trailer while it is in the borrowing motor carrier’s possession.
[q] Trailer interchange coverage
[a] Coverage for a motor carrier’s liability for damage to trailers in its possession under a written trailer interchange agreement.
[q] MCS 90 endorsement
[a] The commercial auto endorsement required by the Motor Carrier Act of 1980. The insurer agrees to pay damages that the insured becomes legally obligated to pay for liability resulting from negligence in the operation, maintenance, or use of any motor vehicle subject to that law.
[q] Motor Carrier Act of 1980 minimum liability insurance limits
[a] Minimum liability insurance limits must be maintained on:
All trucks of 10,000 pounds or more gross weight used to transport certain hazardous cargoes in bulk.
Trucks for hire used for interstate transportation of any type of material.
All trucks that transport hazardous cargo in bulk that do not come within item two in this list.
[q] Rental Reimbursement Coverage endorsement
[a] An endorsement to the BACF that pays the cost to rent a temporary substitute auto when a covered auto designated in the endorsement’s schedule has been damaged by any covered cause of loss.
[q] Employees as Insureds endorsement
[a] An endorsement to the BACF that includes employees as insureds while using their own autos on the insured’s behalf. Covers autos the insured does not own, hire, or borrow in their business.
[q] Employee Hired Autos endorsement
[a] Endorsement considers an employee an insured while operating a rental car in their name with the named insured’s permission.
[q] Individual Named Insured endorsement
[a] An endorsement to the BACF or MCCF that provides Personal Auto Policy coverage to a named insured and family members.
[q] Drive Other Car-Broadened Coverage for Named Individuals endorsement
[a] An endorsement that provides liability insurance for the individual named in the endorsement and his or her spouse while using autos they do not own.
[q] Business Interruption Coverage endorsement
[a] An endorsement that covers the loss of business income when a covered vehicle is damaged. It can be written for business income and extra expense or for business income only.
[q] Public or Livery Passenger Conveyance Exclusion endorsement
[a] An endorsement that explicitly excludes coverage for any covered auto while it is being used as a public or livery conveyance for passengers.