Category 20, Specialized Types endorsements,

Category 23 – Commercial Auto endorsements.

Category 25 Garage (Auto Dealers).

These are varying endorsements that address certain exposures and coverages not otherwise categorized.

Here we are discussing endorsements in Category 26 – Single Interest Endorsements.

Here is a list of all approved forms for commercial auto.

Topics covered:

Single interest automobile physical damage insurance policy CA 26 01

Single interest automobile physical damage insurance policy CA 26 02

Amendment of single interest policy provisions – public or livery passenger conveyance and on-demand delivery services exclusion CA 26 04

Single interest deductibles CA 26 05

Single Interest Automobile Physical Damage Insurance Policy CA 26 01

Endorsement CA 26 01 11 20 can be attached to an insured's auto policy to protect the interests of the named insured's lender, usually a finance company, should the named insured not be able to meet the terms of the financial agreement. In some cases, the borrower may be required to purchase this insurance in order to secure a loan. A single interest policy protects the lender, not the borrower, also known as VSI (vendor's single interest) insurance.  While in some states the lender may be able to pass the cost of the single interest policy premiums on to the borrower, the borrower receives no financial protection in the event the auto used as collateral for the loan is destroyed or damaged. This endorsement CA 26 01 is used to cover a single interest for an individual policy.

Single interest coverages must be written to expire at the same time as the associated finance or loan contract, so if the contract is extended then the policy term must be extended for the same period. The maximum term is 84 months, except for mobile homes in some states.

For purpose of coverage, an auto is new only if the retail purchaser under the single interest policy is the original owner and the auto has not been driven outside of normal dealer inspection and test drives; otherwise the auto is considered a used auto.

This endorsement includes coverage provisions for four peril groups: comprehensive, collision, fire and theft, and conversion, embezzlement, or secretion. Coverage applies if the security interest of the named insured becomes impared and any one of the following conditions exists:

(a) the retail purchaser has defaulted in payments due under the finance contract and the named insured has repossessed the automobile; or

(b) the retail purchaser has chosen to surrender the automobile and its title to the named insured; or

(c) with respect to loss caused by theft, larceny, conversion, embezzlement or secretion, the retail purchaser has defaulted in payments due under the finance contract and the named insured has made every reasonable effort to repossess the automobile.

The endorsement has its own set of exclusions, which includes among others autos used as a livery or conveyance vehicle, unless specifically shown in the declarations. This exception provides coverage during the time an auto is being used by a retail purchaser who is logged into a transportation network platform as a driver, regardless if there are customers in the auto. So for example, a limousine service auto, as long as such use is scheduled. If however, the driver is not logged in for such service at the time of the accident, then the coverage will be excluded.

The exclusion does not apply to a retail purchaser performing business activities that are directly related to the named insured. For example, if a bakery named insured is using the auto to deliver a wedding cake at the time of the accident.

The limit of insurance is the least of the actual cash value of the auto at time of loss, or the repair amount, or the outstanding balance of the named insured's security interest at time of loss.

Single Interest Automobile Physical Damage Insurance Policy CA 26 02

Endorsement CA 26 02 11 20 mirrors the coverages of endorsement CA 26 01, but this endorsement is used when there are multiple single interests with one finance master policy covering all interests. The same exclusions and terms apply as with CA 26 01.

Amendment of Single Interest Policy Provisions – Public or Livery Passenger Conveyance and On-Demand Delivery Services Exclusion CA 26 04

With respect to financed transportation network autos and on-demand delivery service autos, endorsement CA 26 04 11 20 can be used to exclude autos used to provide prearranged transportation services exclusively through an online-enabled application or digital network that connects passengers with drivers, such as Uber or Lyft services. The endorsement also excludes courier or other delivery services used in the same manner when drivers are using their own vehicles to provide the prearranged services. An example of this type of auto service would be Amazon delivery drivers using their own vehicles for deliveries. This exclusion would  not apply if the prearranged services are not provided through an online-enabled application or digital network; for example, a courier who regularly picks up mail from a business and takes it to the post office.

Single Interest Deductibles CA 26 05

Endorsement CA 26 05 04 80 is self-explanatory in that it allows for scheduling deductibles for comprehensive, collision, fire and theft of $100 or $250, as indicated by an x in the appropriate box on the endorsement. Here, there can be a different deductible that applies to comprehensive than the deductible that applies to say, collision.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.