CA DS 03–BUSINESS AUTO DECLARATIONS

(October 2019)

INTRODUCTION

The Insurance Services Office (ISO) CA DS 03–Business Auto Declarations is made up of six different sections or items. Each insurance company develops its own declarations based on this one because the coverage provided in the coverage form is based on entries made on the declarations.

This review is based on the 10 13 edition. Changes from the prior edition are in bold print.

ITEM ONE

General Information

This section identifies and provides basic information about the named insured and other general information. It includes:

• The insurance company name
• The producer’s name
• The named insured
• The address where policy-related information is to be mailed.
• The policy period, including inception and expiration dates, commencing at 12:01 AM Standard Time at the above address

Example: Mickel Braking‘s mailing address is in California, but it has a fleet of vehicles located throughout the United States. Its policy period is 1/1/2018 – 1/1/2019. When a salesman has an accident at 1:00 AM on 1/1/2019 while making his way home from a New Year’s Party in New York City, coverage is in effect because it is only 10:00 PM on 12/31/2018 in California.

• The previous policy number, if any
• The named insured(s) form(s) of business

Note: The form of business is used to determine who is an insured. When there are multiple named insureds, there may be multiple forms of business.

• The insuring agreement stating that the insurance company agrees to provide the insurance included in the coverage form in exchange for payment of the premium and subject to the coverage form's terms
• The total premium due at inception
• The applicable premium audit period, if any
• Endorsements included at inception
• Countersignature block for the authorized representative, including name, title, signature, and date signed
• Spaces for the facsimile signatures of officers of the insurance company, if they do not appear elsewhere

ITEM TWO (10 13 change)

Schedule of Coverages and Covered Autos

This is the staging point for all coverage. A mistake in this area could result in a coverage denial.

A premium entered in the far-right column of a coverage row shows that coverage applies. The word Included may be used instead of an actual premium amount. No entry in that column means that no coverage applies, even if entries are made in other columns for that coverage.

Once that selection is made, an entry is required in the limits column. A limit of insurance must be entered if Covered Autos Liability, Auto Medical Payments, Uninsured Motorists, and Underinsured Motorists coverages were selected. Deductibles must be entered if Comprehensive, Specified Causes of Loss, and Collision coverages were selected. An amount for each disablement of a private passenger auto is required when Physical Damage Towing and Labor coverage is selected. No entry is required when Personal Injury Protection (PIP) is selected; instead, there is a reference to the specific PIP forms.

The final entry is the Covered Auto symbol. This symbol is explained in the Business Auto Coverage Form. The symbol is used to describe the autos/vehicles that are considered covered autos.

One or more of these symbols must be entered for coverage that has been selected:

1–Any Auto

2–Owned Autos Only

3–Owned Private Passenger Autos Only

4–Owned Autos Other Than Private Passenger Autos Only

5–Owned Autos Subject To No-Fault

6–Owned Autos Subject To a Compulsory Uninsured Motorists Law

7–Specifically Described Autos

8–Hired Autos Only

9–Non-owned Autos Only

19–Mobile Equipment Subject To Compulsory or Financial Responsibility or Other Motor Vehicle Insurance Law Only

Note: 10–Manuscript Symbol–CA 99 54–Covered Auto Designation Symbol must be attached to describe the symbol.

Related Article: CA 00 01–Business Auto Coverage Form Analysis explains each of these symbols

Godfrey and Sons, LLC purchases a business auto policy and completes Item Two as follows:

Coverage	Covered Auto	Limit	Premium
Covered Autos Liability	1	$1,000,000	Included
Auto Medical Payments	1	$ 10,000	Included
Uninsured Motorists	1	$1,000,000	Included
Underinsured Motorists	1	$1,000,000	Included
Physical Damage Comprehensive Coverage	7	$500	Included
Physical Damage Specified Causes of Loss Coverage	7	$500	Included
Physical Damage Collision Coverage	7	$1,000	Included

These entries mean that Godfrey has covered auto liability, auto medical payments, uninsured motorists and underinsured motorist coverage for any vehicle – owned, hired, borrowed, leased, nonowned, commercial, and private passenger. The physical damage coverages are restricted to only those autos that are scheduled in Item three below.

ITEM THREE

Schedule of Covered Autos You Own

This item is completed only if symbol 7 is entered in the covered auto column in Item 2. Coverage applies only to the vehicles entered and only when a particular coverage has a premium charge.

This item consists of four (see note below) separate types of information.

• Covered Auto Number
• Principal Garaging Town and State of the Vehicle

Note: This is NOT the mailing address. If vehicles are taken home by employees, it would be that employee’s town and state. If vehicles are kept at a central location, it is the town and state of that central location. The garaging location is used in determining premium so mistakes will result in premium discrepancies. Intentional misrepresentation of the garaging location could result in voidance of coverage.

• Covered Auto Description identifies the characteristics of the vehicle including its Vehicle Identification Number (VIN), make, model and year.
• Classification provides original cost new, radius, use, size, age, code and secondary rating.
• Loss payee is needed because any loss settlement must include the loss payee
• Coverages–Premiums, Limits and Deductibles are displayed for each covered item. Deductibles and limits can be entered. Any entries made apply instead of the entries in Item Two but only for the designated vehicle.

Note: There is no longer a request for purchase information beyond the applicable auto’s Original Cost New. Change in 10 13 edition.

Example: Godfrey schedules three vehicles in Item three. He describes each vehicle by providing the garaging location, a description of the vehicle and its classification information. However, no entries are made in the Coverages- Premiums and Deductibles because Godfrey does not want any changes from what was scheduled in Item two.

ITEM FOUR (10 13 change)

Schedule of Hired or Borrowed Covered Auto Coverage and Premiums

This section is used only when either Symbol 1 or Symbol 8 is entered for any coverage in Item two. Item four does not provide coverage but instead provides rating and premium information. The declarations introduced with the 10 13 edition rephrases the titles, adding phrase “Cost of Hire Rating Basis,” and using modifiers of “Covered Auto,” and “Your” in order to make the language more specific to a given named insured.

There are a number of schedule options that must be selected based on the use of the hired autos and the coverage being provided.

• Covered Autos Liability Coverage–Cost of Hire Rating Basis For Autos Used In Your Motor Carrier Operations–(Other Than Mobile Or Farm Equipment)
• Covered Autos Liability Coverage–Cost of Hire Rating Basis For Autos NOT Used In Your Motor Carrier Operations–(Other Than Mobile Or Farm Equipment)
• Physical Damage Coverage–Cost of Hire Rating Basis For All Autos (Other Than Mobile or Farm Equipment)
• Cost Of Hire Rating Basis For Mobile Or Farm Equipment–Other Than Physical Damage Coverages
• Cost Of Hire Rating Basis For Mobile Or Farm Equipment–Physical Damage Coverages

Rental Period Rating Basis For Mobile Or Farm Equipment– The cost of hire is a component used in all schedules except the Rental Period Rating Basis for Mobile or Farm Equipment schedule.

Mobile or Farm Equipment–Rental Period Rating Basis. "Cost of hire" has two different definitions:

• The cost of hire for motor carrier operations liability coverage is defined as the costs for the automobile hire plus the operator's and any helpers' remuneration. The operator and helper pay is included even when they are the lessee's employees. All other costs that are part of operating the vehicle must also be included, regardless of who pays or absorbs the cost.
• The cost of hire for all other vehicles and coverages is the amount the named insured incurs to hire vehicles that it, a partner, employees, or members of the employee's family do not own. No additional charges are included.

Because all schedules except liability coverage for hired autos used in motor carrier operations use state-based rates, entry must be by state and by coverage. Liability coverage for hired auto used in motor carrier operations uses one rate for all states.

Hired farm or mobile equipment can be rated based on either cost of hire or rental period. The rental period schedule requires the name of the town and state where a job is located when equipment is rated.

ITEM FIVE

Schedule for Non-ownership Liability

This section must be completed if either Symbol 1 or Symbol 9 applies to liability coverage. The number of employees and partners must be entered. If the named insured is a social service agency, the number of volunteers must also be entered. The broad business classes this section applies to are social service agencies, garage service operations, and operations that involve neither social nor garage services.

ITEM SIX

Schedule for Gross Receipts or Mileage Basis–Liability Coverage–Public Auto or Leasing Rental Concerns

Public Auto and Leasing Rental operations may schedule their vehicles, or they may rate their fleets based on gross receipts or mileage. The gross receipts or mileage bases allow the named insured to more easily incorporate costs into its rate structure for its customers. Rule 42 for Public Autos and Rule 75 for Leasing and Rental Concerns in the Commercial Automobile Manual explain eligibility and premium calculation.

Once the named insured decides to use gross receipts or mileage, the appropriate information is entered in this section first by checking whether gross receipts or mileage is to be used and then by entering the applicable estimated gross receipts or mileage in the spaces provided. The last spaces provided are for the premiums. The insurance company may establish a minimum premium and enter it in the space provided. All premiums are estimated.

Note: There are three separate per-location schedules, but each requires a business headquarters location. The definition of gross receipts and mileage for public auto risks and rental or leasing concerns is different.

Gross receipts

• Public auto gross receipts are the amounts the named insured earns by transporting persons or property. It does not include amounts it pays to railroads, steamship lines, airlines and other motor carriers that operate under their own permits. Advertising revenue, taxes collected separately and sent to a governmental division and C.O.D. collections for the cost of mail or merchandise, including collection fees, is subtracted.
• Rental or leasing concerns gross receipts are the amounts the named insured earns by leasing or renting autos to others.

Mileage

• Public autos mileage includes the total mileage driven by revenue producing autos during the policy period. It includes both chargeable mileage and non-revenue producing mileage.
• Rental or leasing concern mileage is the total mileage on autos that the named insured rents or leases to others. It includes both chargeable mileage and non-revenue producing mileage.