Policy Guides

Search InfoCentral

Actual Policy Language



The following conditions apply in addition to the Common Policy Conditions: 



Other conditions are displayed in displayed in Common Policy Conditions.

A. Loss Conditions

A. Loss Conditions

1. Appraisal For Physical Damage Loss

If you and we disagree on the amount of "loss", either may demand an appraisal of the "loss". In this event, each party will select a competent appraiser. The two appraisers will select a competent and impartial umpire.

The appraisers will state separately the actual cash value and amount of "loss". If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

a. Pay its chosen appraiser; and

b. Bear the other expenses of the appraisal and umpire equally.

If we submit to an appraisal, we will still retain our right to deny the claim. 

1. Appraisal For Physical Damage Loss

This is similar to the appraisal process found in property policies. It is used only when the insurer and insured cannot agree on the value of the claim, and not to determine whether or not coverage applies. 

2. Duties In The Event Of Accident, Claim, Offense, Suit, Loss Or Acts, Errors Or Omissions

We have no duty to provide coverage under this policy unless there has been full compliance with the following duties:

a. In the event of "accident", claim, "suit", offense, "loss" or "act, error or omission", you must give us or our authorized representative prompt notice of the "accident", offense, "loss" or "act, error or omission". Include:

(1) How, when and where the "accident", offense, "loss" or "act, error or omission" occurred;

(2) What the "act, error or omission" was;

(3) The "insured's" name and address;

(4) To the extent possible, the names and addresses of:

(a) Any injured persons and witnesses; or

(b) Anyone who may suffer damages as a result of an "act, error or omission".

b. Additionally, you and any other involved "insured" must:

(1) Assume no obligation, make no payment or incur no expense without our consent, except at the "insured's" own cost.

(2) Immediately send us copies of any request, demand, order, notice, summons or legal paper received concerning the claim or "suit".

(3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit".

(4) Authorize us to obtain medical records or other pertinent information.

(5) Submit to examination at our expense, by physicians of our choice, as often as we reasonably require.

(6) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the "insured" because of an "act, error or omission" to which this insurance may also apply.

c. If there is "loss" to a covered "auto" or its equipment, you must also do the following:

(1) Promptly notify the police if the covered "auto" or any of its equipment is stolen.

(2) Take all reasonable steps to protect the covered "auto" from further damage. Also keep a record of your expenses for consideration in the settlement of the claim.

(3) Permit us to inspect the covered "auto" and records proving the "loss" before its repair or disposition.

(4) Agree to examinations under oath at our request and give us a signed statement of your answers. 

2. Insured's Duties

Up to this point the only contractual promise made by the insured was to pay the premium while the insurer was making many promises to pay in the event of certain occurrences. In this section, the insured is being given a list of do's and don'ts that are necessary after an accident or loss.

Endorsement CA 01 97 (Texas Changes) adds statutory provisions regarding prompt payment of claims.

3. Legal Action Against Us

No one may bring a legal action against us under this Coverage Form until:

a. There has been full compliance with all the terms of this Coverage Form; and

b. Under any liability coverage, we agree in writing that the "insured" has an obligation to pay or until the amount of that obligation has finally been determined by judgment after trial. No one has the right under this policy to bring us into an action to determine the "insured's" liability.
3. Legal Action Against Us

4. Loss Payment – Physical Damage Coverages

At our option, we may:

a. Pay for, repair or replace damaged or stolen property;

b. Return the stolen property, at our expense. We will pay for any damage that results to the "auto" from the theft; or

c. Take all or any part of the damaged or stolen property at an agreed or appraised value.

If we pay for the "loss", our payment will include the applicable sales tax for the damaged or stolen property.

4. Loss Payment – Physical Damage Coverages

Paragraph c. in this section gives the insurer the right to "total" an auto and keep the salvage.

5. Transfer Of Rights Of Recovery Against Others To Us

If any person or organization to or for whom we make payment under this Coverage Form has rights to recover damages from another, those rights are transferred to us. That person or organization must do everything necessary to secure our rights and must do nothing after "accident" or "loss" to impair them.

This condition does not apply to damages under Paragraph C. Locations And Operations Medical Payments Coverage of Section II – General Liability Coverages.

5. Subrogation

The insurer has a right to subrogate any loss paid under the policy - except a medical payments loss - against a third party who was responsible for causing the loss.

The insured is permitted to waive this right against a third party if done before the loss.

Use endorsement CA 04 44 (Waiver of Transfer of Rights of Recovery Against Others to Us (Waiver of Subrogation)) for a specific waiver for a designated person or organization.

B. General Conditions

B. General Conditions

1. Bankruptcy

Bankruptcy or insolvency of the "insured" or the "insured's" estate will not relieve us of any obligations under this Coverage Form.

1. Bankruptcy of Insured

2. Concealment, Misrepresentation Or Fraud

This Coverage Form is void in any case of fraud by you at any time as it relates to this Coverage Form. It is also void if you or any other "insured", at any time, intentionally conceals or misrepresents a material fact concerning:

a. This Coverage Form;

b. The covered "auto";

c. Your interest in the covered "auto"; or

d. A claim under this Coverage Form.

2. Concealment, Misrepresentation Or Fraud

3. Liberalization

If we revise this Coverage Form to provide more coverage without additional premium charge, your policy will automatically provide the additional coverage as of the day the revision is effective in your state. 

3. Liberalization

This clause applies to changes in the coverage form approved by the Texas Department of Insurance with no additional premium charge. 

4. No Benefit To Bailee – Physical Damage Coverages

We will not recognize any assignment or grant any coverage for the benefit of any person or organization holding, storing or transporting property for a fee regardless of any other provision of this Coverage Form. 

4. No Benefit to Bailee

See Commercial Property technical report No Benefit to Bailee.

5. Other Insurance

a. For any covered "auto" you own, this Coverage Form provides primary insurance. For any covered "auto" you don't own, the insurance provided by this Coverage Form is excess over any other collectible insurance. However, while a covered "auto" which is a "trailer" is connected to another vehicle, the Covered Autos Liability Coverage this Coverage Form provides for the "trailer" is:

(1) Excess while it is connected to a motor vehicle you do not own; or

(2) Primary while it is connected to a covered "auto" you own.

b. For Hired Auto Physical Damage Coverage, any covered "auto" you lease, hire, rent or borrow is deemed to be a covered "auto" you own. However, any "auto" that is leased, hired, rented or borrowed with a driver is not a covered "auto".

c. Regardless of the provisions of Paragraph a. above, this Coverage Form's Covered Autos Liability Coverage is primary for any liability assumed under an "insured contract".

d. For General Liability and "Acts, Errors Or Omissions" Liability Coverages, this insurance is primary except when e. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in f. below.

e. This Coverage Form is excess over any other insurance, whether primary, excess, contingent or on any other basis:

(1) That is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner;

(2) That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner;

(3) If the "loss" arises out of the maintenance or use of aircraft or watercraft to the extent not subject to Exclusion g. of Paragraph A. Bodily Injury And Property Damage Liability of Section II – General Liability Coverages;

(4) That is specifically written to apply as primary insurance for liability arising out of your "acts, errors or omissions".

f. When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.

5. Other Insurance

There are many occasions where coverage under more than one policy might apply to the same accident. In such a case, the rule is simple: for owned autos, this policy provides primary coverage; for autos not owned by the named insured, this policy provides excess coverage. There is one exception: if an owned trailer is being pulled by a nonowned auto, this policy is excess. And in any case, this policy is primary if the insured has assumed liability in an insured contract.

Under paragraph b., physical damage coverage on hired autos is primary when Symbol 28 is used on physical damage.

Since other auto liability policies (the BAP and PAP) exclude coverage for anyone in the garage business, the Garage policy will usually provide primary coverage for the operation of customers' autos. 

6. Premium Audit

a. The estimated premium for this Coverage Form is based on the exposures you told us you would have when this policy began. We will compute the final premium due when we determine your actual exposures. The estimated total premium will be credited against the final premium due and the first Named Insured will be billed for the balance, if any. The due date for the final premium or retrospective premium is the date shown as the due date on the bill. If the estimated total premium exceeds the final premium due, the first Named Insured will get a refund.

b. If this policy is issued for more than one year, the premium for this Coverage Form will be computed annually based on our rates or premiums in effect at the beginning of each year of the policy. 

6. Audit

There are several items in the policy which could be subject to audit. 

7. Policy Period, Coverage Territory

Under this Coverage Form, we cover:

a. "Bodily injury", "property damage" and "losses" occurring;

b. "Personal and advertising injury" offenses and "acts, errors or omissions" committed; and

c. "Covered pollution cost or expense" arising out of "accidents" occurring 

during the policy period shown in the Declarations and within the coverage territory.

The coverage territory is:

(1) The United States of America;

(2) The territories and possessions of the United States of America;

(3) Puerto Rico;

(4) Canada; and

(5) Anywhere in the world if:

(a) A covered "auto" of the private passenger type is leased, hired, rented or borrowed without a driver for a period of 30 days or less;

(b) The "bodily injury", "property damage" or "personal and advertising injury" is caused by an "insured" who permanently lives within the United States of America, its territories or possessions, Puerto Rico or Canada while the "insured" is temporarily outside of one of those places;

(c) The "personal and advertising injury" offense takes place through the Internet or similar electronic means of communication; or

(d) The "bodily injury" or "property damage" is caused by one of your "products" which is sold for use in the United States of America, its territories or possessions, Puerto Rico or Canada;

provided that the "insured's" responsibility to pay damages is determined in a "suit" on the merits, in the United States of America, the territories and possessions of the United States of America, Puerto Rico or Canada, or in a settlement we agree to.

However, the coverage territory described in Paragraph (5) above does not apply to "work you performed".

We also cover "bodily injury", "property damage", "covered pollution cost or expense" and "losses" while a covered "auto" is being transported between the United States of America, the territories and possessions of the United States of America, Puerto Rico or Canada.

7. Territory

The policy does not apply to auto accidents or losses occurring in Mexico.

For rented auto exposures, coverage extends to anywhere in the world, as limited here.

For general liability exposures, coverage is similar to that provided in a CGL policy. Occurrences taking place in international waters or airspace are covered as long as the means of transportation is between those places listed. Products liability applies worldwide, as long as the product was made or sold in the basic coverage territory. Liability also applies worldwide when arising out of the activities of a person who lives in the coverage territory, but who is temporarily outside the territory on business, such as a convention attendee or salesperson. Coverage also applies to personal and advertising injury claims involving Internet activities when viewed anywhere in the world.

Endorsement CA 25 60 (Worldwide General Liability Coverages) expands the limited worldwide coverage to cover other claims brought outside the standard coverage territory.

Endorsement CA 25 61 (Expanded Coverage Territory for General Liability Coverages - Additional Scheduled Countries) expands the limited worldwide coverage to cover claims brought within a country designated in the endorsement.

8. Two Or More Coverage Forms Or Policies Issued By Us

If this Coverage Form and any other Coverage Form or policy issued to you by us or any company affiliated with us applies to the same "accident", the aggregate maximum Limit of Insurance under all the Coverage Forms or policies shall not exceed the highest applicable Limit of Insurance under any one Coverage Form or policy. This condition does not apply to any Coverage Form or policy issued by us or an affiliated company specifically to apply as excess insurance over this Coverage Form.

8. Two Or More Coverage Forms Or Policies Issued By Us