12.5 Commercial Auto Endorsements
Key Takeaways
- Drive Other Car (DOC) endorsement extends liability, med-pay, and UM to named individuals (and family) using non-owned autos, filling the gap when an owner has no personal auto policy.
- Hired Auto and Employees as Insureds endorsements broaden who and what is covered for rented and employee-driven autos.
- The Pollution Liability Broadened Coverage for Covered Autos endorsement (CA 99 48) restores limited pollution coverage otherwise excluded.
- Rental Reimbursement and Towing/Labor endorsements add first-party convenience coverages with daily and per-disablement caps.
- Lessor/Additional Insured endorsements protect leasing companies and lenders, often paired with a loss payable clause for physical damage.
Drive Other Car (DOC) Endorsement
The Drive Other Car (DOC) endorsement adds liability, medical payments, and uninsured/underinsured motorist (UM/UIM) for named individuals (and resident family members) while they use a non-owned auto. It solves a classic gap: an executive whose only car is a company auto has no personal auto policy, so when they borrow or rent a car personally, nothing covers them.
- DOC makes the named person an insured for autos they do not own.
- It is written for specific named individuals, not the corporation generally.
- It mirrors the protection a personal auto policy would otherwise provide.
Exam trap: DOC does not cover autos the individual owns — it is strictly for other (non-owned) cars.
Coverage-Broadening Endorsements
| Endorsement | What It Adds |
|---|---|
| Hired Autos Specified as Covered Autos (CA 99 16) | Adds physical damage for specific rented/leased autos |
| Employees as Insureds (CA 99 33) | Makes employees insureds when using their OWN autos for the named insured's business |
| Pollution Liability Broadened Coverage (CA 99 48) | Restores limited coverage for pollutants that are the cargo or fuel/lubricants of a covered auto |
| Rental Reimbursement (CA 99 23) | Pays a daily rental amount (e.g., $30/day up to $900) while a covered auto is being repaired after a covered loss |
| Towing and Labor | Pays towing/labor at the disablement site, per-disablement limit |
Exam trap: the standard form excludes most pollution liability; CA 99 48 gives back only limited coverage — typically for pollutants being transported as cargo and for the auto's own fluids, not broad environmental cleanup.
Lessor, Additional Insured, and Loss Payee
When a business leases or finances vehicles, the leasing company or lender requires protection.
- Lessor – Additional Insured and Loss Payee (CA 20 01): names the lessor as an additional insured for liability and as loss payee for physical damage on leased autos.
- Loss Payable Clause: directs physical-damage payments to the lienholder up to its interest, even if the insured's act would otherwise void coverage (similar to a standard mortgage clause in property).
- Additional Insured – Designated Persons or Organizations: extends liability to a contractually required party.
Worked Example: Rental Reimbursement
A covered auto is in the shop for 12 days after a covered collision. The Rental Reimbursement endorsement pays $40/day up to $1,200. The insured rents a car at $50/day.
- Daily cap applies: insurer pays $40/day x 12 = $480.
- The $480 is below the $1,200 maximum, so the full $480 is paid; the insured absorbs the extra $10/day.
Exam trap: rental reimbursement triggers only after a covered physical damage loss — not for routine maintenance or an uncovered breakdown.
Individual Named Insured and Fellow-Employee Endorsements
Two endorsements adjust who is treated as an insured:
- Individual Named Insured (CA 99 17): when a sole proprietor lists the business on the policy, this endorsement extends personal-auto-style protections (such as drive-other-car for the named individual and family members) so the owner is not left with a personal gap.
- Fellow Employee Coverage (CA 99 60): the base form excludes bodily injury to a fellow employee of the insured. This endorsement deletes that exclusion so one employee injured by another employee's covered driving can recover.
Exam trap: without CA 99 60, an employee injured by a co-worker driving a company truck is barred from the auto liability coverage and must look to workers compensation.
Endorsement Quick Reference
| Need | Endorsement |
|---|---|
| Owner has only a company car | Drive Other Car / Individual Named Insured |
| Physical damage on a rented truck | Hired Autos Specified (CA 99 16) |
| Employee personal-car coverage | Employees as Insureds (CA 99 33) |
| Restore limited pollution | Pollution Broadened (CA 99 48) |
| Co-worker injury claims | Fellow Employee (CA 99 60) |
| Protect a leasing company | Lessor Additional Insured (CA 20 01) |
Matching the gap to the correct endorsement is the single most tested skill in this section.
Hired Auto Liability and Physical Damage
Hired-auto exposure splits into two parts that candidates must keep separate:
- Hired Auto Liability flows automatically when Symbol 8 (hired) or Symbol 1 is shown for liability — no extra endorsement is needed.
- Hired Auto Physical Damage is NOT automatic; it requires the Hired Autos Specified as Covered Autos (CA 99 16) endorsement or the Hired Auto Physical Damage endorsement, which often rates on the basis of cost of hire (total rental dollars during the term).
Worked example: A firm spends $50,000 on rentals during the year and the hired physical-damage rate is $0.80 per $100 of cost of hire. Premium = ($50,000 / 100) x $0.80 = $400. Exam trap: confirming liability flows from the symbol but physical damage needs the endorsement is a classic distinction.
Additional Insured vs. Loss Payee
An additional insured gains liability protection (it can be sued and defended), while a loss payee only receives physical-damage payments up to its financial interest. A lessor frequently needs both, which is why CA 20 01 combines them. Exam trap: naming a lender merely as loss payee does not give it any liability defense.
A company president drives only a corporate-owned auto and has no personal auto policy. On vacation she rents a car personally and causes an accident. Which endorsement was designed to protect her?
A covered auto is repaired over 10 days after a collision. The Rental Reimbursement endorsement pays $35/day up to $1,050, and the insured rents at $45/day. How much does the insurer pay?