CA DS 26–AUTO DEALERS DECLARATIONS

(October 2019)

INTRODUCTION

The Insurance Services Office (ISO) CA DS 26–Auto Dealers Declarations is made up of nine 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.

Note: The insurance company providing coverage and the producer are entered in the spaces at the top of Page 1.

This review is based on the 10 13 edition which is the first Auto Dealers Declarations.

Related Article: Auto Dealers/Garage Program Archive – see section on Garage Declarations

ITEM ONE

General Information

This section identifies and provides basic information about the named insured and other general information, such as:

The name of the insurance company providing coverage
The name of the producing agent or broker
The named insured(s)
The mailing address.

Note: This address is used for all official correspondence from the insurance company and it also determines the time used in setting the policy period.

The policy period, including inception and expiration dates, commencing at 12:01 Standard Time at the mailing address above.
The previous policy number
The form or forms of business the named insured(s) engages in
The insuring agreement stating that, in exchange for payment of the premium and subject to the policy's terms, the insurance company agrees to provide the insurance included in the coverage form
The total premium due at inception
The premium audit period, if subject to audit
Endorsements attached to and making up part of the policy at inception

Note: Two endorsements are listed in this section but there are spaces for more:

IL 00 17–Common Policy Conditions
IL 00 21–Broad Form Nuclear Exclusion

Countersignature block for the authorized representative, including name, title, signature and date signed
A space for the facsimile signatures of officers of the insurance company, if not indicated elsewhere

ITEM TWO

Schedule of Coverages and Covered Autos

This is the staging point for all coverage. A mistake in this area will result in coverage disputes.

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 columns means that no coverage applies, even if entries are made in other columns for that coverage.

The first four coverages are required so only one total premium for all four is required; however; the limits must be entered separately as follows:

The first coverage is covered auto. An each accident limit must be entered.
The second coverage is general liability bodily injury and property damage for which an each accident limit must be entered
The third coverage is damage to premises rented to you for which an any one premises limit entry is required.
The fourth coverage is personal and advertising injury for which an any one person or organization entry is required.
A general liability aggregate limit is entered that applies to all general liability coverage except for products and worker performed. This does not apply to the covered auto liability.
A products and work you performed aggregate limit is entered for that hazard

A premium and limit of insurance must be entered if Locations and Operations Medical Payments, Auto Medical Payments, Uninsured Motorists and Underinsured Motorists or Acts, Errors or Omissions Liability coverages are selected. Premiums and deductibles must be entered if Comprehensive, Specified Causes of Loss, and Collision coverages are selected.

No entry other than premium is required when Personal Injury Protection (PIP) is selected; instead there is a reference to the specific PIP forms.

No entry other than premium is required when Garagekeepers coverage(s) is selected but reference is made to Item five where entry is made.

The final entry is the Covered Auto symbol. This symbol is explained in the Auto Dealers Coverage Form. The symbol states which autos/vehicles are considered covered autos.

One or more of these symbols must be entered for each auto-related coverage that has been selected.

The symbols on the declarations are:

21–Any Auto

22–Owned Autos Only

23–Owned Private Passenger Autos Only

24–Owned Autos Other Than Private Passenger Autos Only

25–Owned Autos Subject To No-Fault

26–Owned Autos Subject To A Compulsory Uninsured Motorists Law

27–Specifically Described Autos

28–Hired Autos Only

29–Non-Owned Autos Used In Your Garage Business

30-Autos Left With You for Service, Repair, Storage or Safekeeping

31–Dealers’ Autos (Physical Damage Coverages)

Note: 32–Manuscript Symbol–CA 99 54–Covered Auto Designation Symbol must be attached to describe the symbol.

ITEM THREE

Locations Where You Conduct Auto Dealer Operations

Beginning with the named insured's main business location, the location number, and address of each location where auto dealer operations are conducted is entered in the spaces provided. A separate endorsement must be used if there are more than three locations.

ITEM FOUR

Liability and Personal Injury Protection–Premiums

This section contains the rating information for the auto dealership.

The total number of Class 1 employees who regularly operate vehicles, Class 1 all other employees, Class II non-employees under age 25, and Class II non-employees age 25 and over must be entered by location. Rule 49 in the ISO Commercial Lines Manual, Division One Automobile describes how these entries are converted into rating units.

The above described information is not required for those named insured who deal in only trailers. Such named insured enter only the total number of employees.

The premium is then developed and entered by location for Covered Auto Liability Premium, Personal Injury Protection, and Acts, Errors or Omissions Liability Premium.

The definition of Class I regular operator is any employee furnished with an auto or whose main duty is to operate an auto. Active proprietors, partners, officers, and salespersons, as well as general and service managers, are also Class I regular operators.

Class I all other employees are any employees not defined as Class I regular operators.

Employees who work 20 or more hours a week are considered one rating unit and those who work less are considered ½ rating unit each.

Class II non-employees are proprietors, partners or officers considered inactive but who are furnished with autos. It also includes their relatives and also the relatives of any class I employee.

ITEM FIVE

Garagekeepers Coverage And Premiums

Each location with Garagekeepers Coverage is entered in this item. Coverages at different locations can be different but all vehicles at a particular location must have the same coverages. The three options available are Comprehensive, Specified Causes of Loss, and Collision. Selecting only one is acceptable. The coverages usually selected are Comprehensive and Collision. A limit of insurance and a deductible must be entered at the location for the coverage selected. The Comprehensive and Specified Causes of Loss coverages deductibles apply on either an all perils basis or a Theft and Mischief or Vandalism only basis. After that selection is made, a choice must be made as to what amount of deductible applies per vehicle and what is the maximum amount of deductible in a single event. Collision coverage has only a single per-auto deductible.

Coverage is provided on a legal liability basis unless one of the direct coverage options is selected. The two direct coverage options are primary and excess. The primary option is more expensive because it responds to losses before any other available source of coverage. The excess option keeps coverage on a legal liability basis for the primary coverage but does not impose legal liability restrictions on an excess basis.

ITEM SIX

Physical Damage Coverage – Types of Covered Autos and Interests in These Autos – Premium – Reporting and Nonreporting Basis

This item applies only to dealers' autos. Coverage is selected by placing an “x” in the grid by the coverage, the type of auto, and the interests to be covered.

A limit of insurance and a deductible must be entered at the location if Comprehensive or Specified Causes of Loss coverage is selected. The Comprehensive and Specified Causes of Loss coverages deductibles apply on either an all perils basis or a Theft and Mischief or Vandalism only basis. After that selection is made, a choice must be made as to what amount of deductible applies per vehicle and what is the maximum amount of deductible in a single event. Collision Coverage is not location-specific but covers all vehicles at all locations. The collision deductible is per vehicle and is not subject to a maximum. This section also has a provision for a limit at locations where the named insured stores covered autos, not in Item Three. A separate limit applies to property in transit.

The Premium Basis can be monthly or quarterly and reports must be provided according to the requirements indicated. Coverage can also be on a non-reporting basis subject to the stated limit of insurance indicated.

The Loss Payee section provides the names of the entity or entities that have a financial interest in the covered autos in addition to the named insured.

ITEM SEVEN

Schedule of Covered Autos Which Are Furnished To Someone Other Than a Class I or Class II Operator or Which Are Insured On a Specified Car Basis

This item is used when individual vehicles must be listed in order for coverage to apply. It is similar to the Auto Schedule on the BAP with spaces to enter the covered auto, its principal garaging location, classification information for rating purposes, and the coverages, limits, deductibles, and premiums. Space is available to enter three vehicles. A schedule or endorsement must be used if there are additional autos.

The name of the person or the organization being furnished with the automobile must be identified on the schedule.

Note: This section is often left blank because Item One and Item Six usually are sufficient to cover all of the dealership autos.

ITEM EIGHT

Schedule of Hired or Borrowed Covered Auto Coverage and Premiums

This item is used when either Symbol 21 or Symbol 28 appears in Item 2. These are the rating schedules for the coverage. There are a number of schedules in this Item.

Covered Autos Liability Coverage–Cost of Hire Rating Basis For Autos–(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.

Since all schedules use state-based rates, the entry must be by state and by coverage. 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 NINE

Covered Auto Liability Premium for Pick Up and Delivery of Autos–Non-Franchised Dealers Only

This section is completed only for non-franchised dealers that pick up and deliver autos beyond 50 miles.