Policy Issues- When there's a trailer in BAC

Nothing of consequence added there, except to note one of the many confirmations of David's description of the BAC as "a confusing read." For example, one of the ways to clarify a possibly confusing policy provision is to look for a proper definition of the term, then insert that definition into the provision in place of the term. If we insert the definition of "trailer" into the above definition of "auto," we get the following:

"Auto" means: 1. A land motor vehicle, "Trailer" includes semitrailer or semitrailer designed for travel on public roads (emphasis mine). Knowing an "auto" can be a "semitrailer or semitrailer" simplifies things, doesn't it? David, I feel your pain.

Now that we have clarified that a "trailer" as defined by the BAC is nothing fancy, let's see what unique provisions, if any, will be provided for such vehicles.

For coverage, you begin on page 1 of the BAC, looking at the "Description of Covered Auto Designation Symbols" for anywhere the term "trailer" appears. We find several.

Symbol 1 covers "any auto," which would clearly include trailers.

Symbol 2 covers "owned autos only," which includes any owned trailers. But the description adds the following parenthetical: "(and for Liability Coverage any "trailers" you don't own while attached to power units you own)." So even non-owned trailers will have coverage when being pulled by an owned auto, but only for liability. No physical damage for the trailer itself is found here.

Symbol 3 covers "owned private passenger autos only." Because a trailer is not considered to be a private passenger auto, move along, nothing to see here.

Symbol 4 covers "owned autos other than private passenger autos only," which just like Symbol 2 clearly covers any owned trailers. It also includes the same extension for non-owned trailers while attached to an owned power unit, for liability coverage only, as described under Symbol 2.

Symbols 5 and 6 apply to any autos subject to state no-fault or UM/UIM laws, which would include trailers–or not, depending upon the applicable law's specific provisions.

Symbol 7 covers "specifically described autos," which would clearly include trailers only if they are specifically described. It also includes the same extension for non-owned trailers while attached to covered power units as found in Symbols 2 and 4.

Symbols 8 and 9, similar to 5 and 6, apply to all autos meeting the descriptions, which would include trailers for any coverage designated by these symbols.

Trailers are provided coverage just as any other auto, unless there is a specific policy provision indicating otherwise. Such a provision was found in Symbols 2, 4 and 7, where non-owned trailers were specifically granted liability coverage only, and only while attached to a power unit otherwise covered by this policy.

Because a trailer is defined as an "auto," any coverage applying to autos automatically applies to similar trailers.

In a specific situation (being towed by an otherwise covered power unit) three coverage symbols provide an extension of the policy's liability coverage to otherwise not covered non-owned trailers. If you disconnect those same trailers from the power units, you also disconnect them from liability coverage under this policy, since the extensions no longer apply.

There is one more policy coverage provision unique to trailers to consider. On page 2 of the ISO BAC, we find the following special provision, from which we are only quoting the portion applicable to trailers:

C. Certain Trailers, Mobile Equipment And Temporary Substitute Autos

If Liability Coverage is provided by this Coverage Form, the following types of vehicles are also covered "autos" for Liability Coverage:

1. "Trailers" with a load capacity of 2,000 pounds or less designed primarily for travel on public roads.

This is interesting for several reasons. First, it only applies to trailers with load capacity 2,000 pounds or less. Secondly, those trailers must be "designed primarily for travel on public roads." (For example, no storage bins, garden implements, or most farming equipment need apply.) Third, the only coverage provided is liability.

And fourth, none of this matters unless "liability coverage is provided by this coverage form." Many may argue the intent of this provision, but the wording seems clear. It cannot be referring to whether any liability coverage is provided under the form for trailers, because that would eliminate the need for this special provision. So it must mean just what it says: if liability coverage of any type is provided by this form, you get the automatic extension for certain small trailers. So, for example, if you have symbol 2 for liability, this extension provides liability coverage for non-owned small trailers, without that trailer needing to be attached to an otherwise covered power unit. Note the same is thus true for Symbols 4 and 7.

What if you used only a Symbol 9 for liability? And further, what if the insured owned the small trailers but obviously failed to declare them (this being the reason there is no Symbol 1, 2, 4 or 7)? Take another look at that extension wording, and I think you will find those small trailers are covered–again, for liability only. If the owner wanted comprehensive, collision or specified causes of loss for the small trailers, one of the other applicable symbols is necessary.

If there is truly a "confusing read" about trailers in the BAC, it lies within this special provision and those parenthetical extensions in Symbols 2, 4 and 7. But the confusion is only in our assumption of how coverage should work. ISO threw in several potential "trailer liability coverage" gifts for certain insureds under limited circumstances. The wording is clear, but we're so used to "what the carrier promiseth the form taketh away" that when confronted with generosity, we stand transfixed, unbelieving, confused. Which may align us perfectly with our insureds!

David, hope this helps. If you really enjoyed this, there are these Billy Joel tickets…