Author: Chris Boggs
Insurance Services Office (ISO) recently introduced several changes to its Business Auto Coverage Form (CA 00 01) with a November 2020 edition date and a proposed effective date of December 1, 2020. Following is a synopsis of these changes.
Automatic Trailer Liability Coverage
Since at least 1987, ISO's Business Auto Policy (BAP) has extended automatic liability coverage to “trailers with a load capacity of 2,000 pounds or less designed primarily for travel on public roads." After 33 years, ISO is changing this condition within the BAP. Two reasons ISO gives for this change:
- Market conditions require this change; and
- ISO is not aware of any legal requirement regarding the disclosure of a trailer's load capacity; but they are aware that Title 49 C.F.R. §567.4 mandates that manufacturers permanently attach the Gross Vehicle Weight Rating (GVWR) to all trailers.
There is a third reason not in the official filing, Big I's Technical Affairs Committee (TAC) has been requesting this change for several years.
The new automatic trailer coverage grant found in the policy reads: “'Trailers' with a registered Gross Vehicle Weight Rating of 3,000 pounds or less designed primarily for travel on public roads."
Note that the automatic extension of coverage is no longer based on load capacity, it is now based on the trailer's gross vehicle weight. But there is a downside to this change, for automatic coverage to apply, the vehicle must be registered. “Homemade" unregistered trailers are not extended automatic coverage which may be a narrowing of coverage.
Long-Term Leased Vehicles
For years there has been a shadow “gap" in the coverage grant for long-term lease vehicles provided by the Business Auto Policy (CA 00 01); specifically, there may have been no coverage for vehicles acquired via a long-term lease during the policy period unless it was specifically listed.
Prior editions of the BAP extended automatic coverage in Symbols 2 – 6 to newly acquired owned autos. A leased vehicle is not necessarily an owned vehicle, so until the vehicle was listed, there was potentially no coverage. (Symbols 1 and 19 did not necessarily have the potential gap as they cover ANY auto.)
To remedy this potential gap, ISO added a new paragraph under the “Owned Autos" section that reads:
3. An "auto" that is leased or rented to you without a driver, under a written agreement for a continuous period of at least six months that requires you to provide primary insurance covering such "auto", will be considered a covered "auto" you own.
Now there is no question that a vehicle acquired via a long-term lease is the same as an owned vehicle. This same provision is found in the personal auto policy (PAP).
Towing and Labor
Historically the BAP has extended Towing and Labor coverage to private passenger type vehicles only. Towing and labor coverage is extended in this filing to include light and medium trucks in addition to private passenger autos.
- “Light Trucks" have a gross vehicle weight (GVW) of 10,000 pounds or less.
- “Medium Trucks" have a gross vehicle weight (GVW) of 10,001 – 20,000 pounds.
ISO is introducing a new maximum deductible provision that limits the out-of-pocket cost to five times the highest deductible applicable to any one covered auto. The insured can apply this provision to Theft, Mischief or Vandalism losses only or to All Perils covered by the policy.
Transportation Expense and Loss of Use Expense Coverage
Transportation Expenses has been a Coverage Extension within the Physical Damage coverage of the BAP since at least 1987. Loss of Use Expenses was added as a Coverage Extension within the BAP in 2001.
ISO regularly increases these limits in an attempt to keep up with changes in the cost of services (inflation). The limits are increased in the new BAP to:
- Transportation Expenses: $30 per day / $900 total; and
- Loss of Use Expenses: $30 per day / $900 total.
Unmanned Aircraft Exclusion
The BAP now includes a drone (unmanned aircraft) exclusion.
Other 2020 Auto Program Changes
For information on the new endorsements introduced in this most recent filing, see the VU article, ISO Business Auto Form and Endorsement Revisions.
Information about the changes to the Auto Dealers Coverage Form (ADCF), see the VU article, Changes to ISO's Auto Dealers Coverage Form.
Last updated: January 8, 2021