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Sample Declarations Form

Note: Insurance companies may arrange the Declarations page in any order to suit their data processing capabilities, and to allow specific types of information and coding.

Item One
This section provides general information about the insured and the policy period. All entities which have common ownership should be listed as named insureds on the Declarations or in a separate endorsement that completes the list of Named Insureds. In listing multiple named insureds, remember that the first named insured has several responsibilities, including authorization for changes to the policy and payment of the premium.

Item Two -- Schedule of Coverages and Covered Autos
This section provides a schedule of coverages being provided by the policy and a method to determine the types of autos covered under each different coverage type. The section also shows the limit and premium for each coverage selected by the insured.

Coverages
The coverages listed in this column apply only to the automobiles designated in the second column (Covered Autos), and for which a premium is shown in the last column (Premium). Even though coverage may be triggered here for PIP, Medical Payments or UM/UIM, the appropriate coverage endorsement must be attached to complete the policy. Personal Injury Protection on covered autos is provided by attaching endorsement CA 22 64 (Texas Personal Injury Protection Endorsement). Medical Payments coverage on covered autos is provided by attaching endorsement CA 99 03 (Auto Medical Payments Coverage). Uninsured/Underinsured Motorist Coverage on covered autos is provided by attaching endorsement CA 21 09 (Texas Uninsured/Underinsured Motorist Insurance).

Covered Autos
Specific types or classes of autos to be insured for specific coverages are designated in this column by using numerical symbols defined in the policy (see Covered Autos Defined).

Limit
Limits are scheduled in this column. Liability limits are displayed for "each accident" relating to Covered Autos Liability and separately to General Liability. Separate limits are shown for "any one premises" for Damage to Premises Rented to You and for "any one person or organization" for Personal and Advertising Injury Liability. Aggregate limits are shown separately for General Liability and Products and Work You Performed. The deductible amount for comprehensive and collision can be shown in this column or in the schedule of Item Six. The comprehensive deductible does not apply to loss caused by fire or lightning. Under the Specified Causes of Loss Coverage, a standard deductible of $100 for each auto applies only to loss caused by mischief or vandalism. See Item Six for physical damage coverage details for autos owned by the dealership.

Premium
A premium entry in this column, along with a covered auto symbol in the second column, is what triggers coverage on the Auto Dealers Policy.

Item Three -- Locations Where You Conduct Auto Dealer Operations
This listing of locations facilitates the rating of the auto dealers policy but does not limit general liability coverage to locations listed on the policy. Since the garagekeepers coverage requires a specific limit at each location, however, there is no automatic feature for that coverage. For physical damage coverage, a separate limit must be shown for each location, and a separate limit is shown for newly acquired or temporary locations (see Item Ten). Endorsement CA 25 07 (Locations and Operations Not Covered) excludes locations or operations described on the endorsement.

Item Four -- Liability and Personal Injury Protection - Premiums
This item contains rating information for liability coverages. The auto liability and general liability exposures are rated together, using "Number of Persons" in "Classes of Operators" as the rating basis. Each location is rated separately. Refer to the auto dealers section of the ISO manual for complete details. Personal Injury Protection on covered autos is provided by attaching endorsement CA 22 64 (Texas Personal Injury Protection Endorsement). Medical Payments coverage on covered autos is provided by attaching endorsement CA 99 03 (Auto Medical Payments Coverage). Uninsured/Underinsured Motorist Coverage on covered autos is provided by attaching endorsement CA 21 09 (Texas Uninsured/Underinsured Motorist Insurance). The premiums for these coverages should be shown on the respective endorsements. (For commentary on Personal Injury Protection, Medical Payments and UM/UIM coverages, see Policy Coverages / Business Auto section of InfoCentral.) The premium for Acts, Errors or Omissions Liability is also shown here.

Item Five -- Garagekeepers Coverages And Premiums
The three coverage options are shown here (Comprehensive, Specified Causes of Loss, and Collision) but coverage is actually triggered by an entry ITEM TWO of the declarations. Each location is rated separately.

Limit of Insurance And Deductible
A separate limit of insurance is required for each location (described in Item Three above).  There are two options for applying the deductible on comprehensive and specified causes of loss:  it can only apply to theft or vandalism claims, or it can apply to all losses.  There is a per-auto deductible subject to a maximum deductible in any one event.

Direct Coverage Options
The basic policy provides coverage only if the insured is legally liable (negligent) for the loss of or damage to a customers' auto. By checking one of the boxes in this section, the coverage is extended to apply without regard to negligence, with two choices given for coverage application - excess or primary.

With the excess option, coverage could be used to cover the customer's physical damage deductible, subject to the insured's deductible. It might also be used to pay for a substitute vehicle while the customer's auto is being repaired, since the definition of "loss" includes loss of use for the purpose of garagekeepers coverage. If the customer has no direct insurance to cover any part of the loss, garagekeepers coverage with the excess option becomes primary.

With the primary option, any "loss" to the customer's auto, as long as damage is caused by a covered peril, is covered without regard either to the insured's negligence or the customer's own insurance.

In no event should the election of the excess option, for which the insured is charged additional premium, provide less coverage than that provided by the legal liability coverage in the basic policy. If the insured is negligent, the garagekeepers coverage with the excess option will pay the full amount of the claim (subject to the deductible) without consideration for the customer's own insurance.

Item Six -- Physical Damage Coverage Coverages

The three types of coverage -- comprehensive, specified cause of loss, and collision are options for the insured to select.

Types of Autos
The insured has two options and can select one or both: 

  • New Autos

  • Used Autos, Demonstrators and Service Vehicles.

Interests Covered
The insured has four options: 

  • Your interest in covered autos you own.   Provides “blanket” coverage on all new and/or used autos (based on selected Types of Autos).

  • Your interest only in financed covered autos.  Covers autos that are financed only, but only for the amount in excess of the creditor’s interest (no coverage for the creditor’s interest).

  • Your interest and the interest of any creditor named as a loss payee.  Covers the full value of financed covered autos, including the interest of the insured as well as the creditor.

  • All interests in any auto not owned by you or any creditor while in your possession on consignment for sale.  Normally the insured’s responsibility for autos owned by others would be covered by garagekeepers coverage, but that coverage (with Covered Auto Symbol 30) only covers autos left with the insured for service, repair, storage or safekeeping.

Limit of Insurance And Deductible
Comprehensive or Specified Causes of Loss:  A separate limit of insurance is required for each location (described in Item Three above).  There are two options for applying the deductible on comprehensive and specified causes of loss:  it can only apply to theft or vandalism claims, or it can apply to all losses. There is a per-auto deductible subject to a maximum deductible in any one event.

Limit of Insurance And Deductible
Collision: Collision coverage is written on a blanket basis for all locations.  The deductible applies per auto.

Other Locations
Separate limits are required to cover physical damage on autos at newly acquired locations or autos while in transit.  Coverage at new locations (not listed in Item Three) applies only if the loss occurs 45 days or less after the insured begins using the location.  Collision on autos in transit applies only if the auto is 50 miles or less from the point of purchase of distribution to its destination, unless this is extended by endorsement.

Premium Basis
Physical damage coverage can be written on a non-reporting basis for a flat annual premium, or it can be written on a monthly or quarterly reporting basis with a deposit premium and interim payments based on values in the reports and final adjustment to return the unused deposit if any.

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 section is used when autos are specified on the policy for certain coverages, rather than included on a "blanket" basis, such as for medical payments or physical damage. It is also used for rating purposes (coverage is automatic) when an auto is furnished for the regular use of someone other than a Class I or Class II operator (see definitions in Item Four), such as driver training programs, welcome wagons, churches, girlfriends, etc.

Item Eight - Schedule of Hired or Borrowed Covered Auto Coverage and Premiums
The liability section is used to display the premium for liability coverage on hired and borrowed autos, such as short term lease or rental arrangements. Such coverage is automatic when Symbol 21 is used. Symbol 28 is used for specific coverage on hired and borrowed autos as that term is defined (see Covered Autos Defined). The premium for this coverage is rated based on "cost of hire," usually determined at audit; at inception, a minimum premium is charged. 

Liability
Liability protection applies to the named insured and permissive users while operating autos hired or borrowed for business use. However, the Who Is An Insured section specifically excludes the owner of the vehicle. An agreement by the insured to hold the renter harmless, on the other hand, will be covered in the liability section under the definition of Insured Contract. The exposure of physical damage to the rental auto is not covered due to the Care, Custody and Control exclusion.  However, this exposure can be covered -- see the next section. 

An auto rented in an employee’s name is not considered an auto hired by the named insured, but coverage would be provided as respects the named insured if nonowned autos are covered using Symbol 21 or Symbol 29.  The employee is not considered an insured while operating a nonowned auto -- see Who Is An Insured.  To cover an employee as an insured while operating an auto rented or hired by an employee in his or her own name for the purposes of performing duties related to the insured's business, use endorsement CA 20 54 (Employee Hired Autos).

For a complete discussion on how the policy responds to a rental situation, see the Business Auto technical report Rental Cars.

Physical Damage
The physical damage section is used to display the conditions and premium for physical damage coverage on hired or borrowed autos. Paragraph 5.b. of the Other Insurance section makes this coverage primary, unless the vehicle is hired with a driver.  Endorsement CA 20 33 (Autos Leased, Hired, Rented or Borrowed with Drivers - Physical Damage Coverage) can be attached to make coverage primary when the vehicle is hired with a driver. 

Coverage selections in the first column are comprehensive or specified perils, and collision. In the third column, a deductible is inserted for each coverage. Other than the actual cash value of the hired auto, there is no maximum limit of liability for this coverage. 

In the Premium column, a minimum premium is charged at inception for incidental exposures.

Triggering coverage in this section is the only way to provide physical damage coverage on short term rental vehicles.

Item Nine -- Liability Premium For Pick Up And Delivery Of Autos -- Non-Franchised Dealers Only
This section is for rating purposes only since there is no exclusion in the liability section for pick up and delivery over 50 miles. For collision coverage, however, an endorsement must be attached.