Q

One of the auto dealers I represent carries specified perils coverage for auto physical damage on garage coverage form CA 00 05. He sustained a loss under this coverage section, and I want to be sure that the deductible is applied properly. In reading the form, I believe that a deductible applies only to losses when caused by theft, mischief, or vandalism. However, this just doesn't seem right. How should the deductible be applied?

Louisiana Subscriber

A

Your assessment of how the deductible applies is correct. Section IV physical damage coverage on form CA 00 05 differentiates between dealers and non-dealers in the application of the deductible. If the insured is a dealer, the deductible for either comprehensive or specified perils applies only to loss caused by theft, mischief, or vandalism. On the other hand, if the insured is a non-dealer, the deductible on comprehensive coverage does not apply to loss caused by fire or lightning, but does apply to all other perils. The non-dealers coverage does not state any other conditions for the application of a specified perils deductible.

Your client would receive substantially more coverage if comprehensive coverage were chosen, even though the deductible provision might give the impression that there isn't that much difference between comprehensive and specified perils coverage.