12.5 Commercial Auto Endorsements
Key Takeaways
- Drive Other Car (CA 99 10) covers a named individual without a personal auto policy when driving non-owned autos.
- Hired Auto Physical Damage (CA 99 54) adds Comp/Collision to hired autos, since Symbol 8 provides liability only.
- The experience modification factor multiplies manual premium: below 1.00 is a credit, above 1.00 is a debit, 1.00 is average.
- Flat-charge endorsements are typically added after the experience mod is applied to the rated premium.
- Common endorsements include Lessor Additional Insured (CA 20 01), Auto Med Pay (CA 99 03), and Individual Named Insured (CA 99 17).
Common Commercial Auto Endorsements
Endorsements tailor the Business Auto and Motor Carrier forms. Know the form numbers and what each does — exam stems often quote them.
| Endorsement | Form No. | Effect |
|---|---|---|
| Drive Other Car (DOC) | CA 99 10 | Extends coverage to a named individual (and family) who has no personal auto policy, for non-owned autos |
| Hired Auto Physical Damage | CA 99 54 | Adds Comp/Collision to hired autos (Symbol 8 gives liability only) |
| Individual Named Insured | CA 99 17 | Treats an individual named insured like a personal auto, adding family members |
| Mobile Equipment | CA 20 15 | Schedules certain mobile equipment as covered autos |
| Lessor — Additional Insured & Loss Payee | CA 20 01 | Adds the auto lessor as AI and loss payee |
| Auto Medical Payments | CA 99 03 | Adds Med Pay regardless of fault for occupants |
| Uninsured/Underinsured Motorists | CA 21 xx (state forms) | Adds UM/UIM, often state-mandated |
| Pollution Liability — Broadened | CA 99 48 | Broadens limited pollution coverage |
Drive Other Car (CA 99 10) — A Frequent Question
A business owner whose only auto is a company car titled to the corporation has no personal auto policy. When that owner drives a borrowed or rented personal-use car, there is a coverage gap. The Drive Other Car endorsement closes it by extending the business policy's liability, Med Pay, UM, and physical damage to the named individual (and resident family members) while using a non-owned auto.
Experience Rating in Commercial Auto
Larger commercial auto accounts are experience rated: the insured's own loss history adjusts the manual premium. The experience modification factor (mod) multiplies the manual premium.
- Mod = 1.00 → average; no credit or debit.
- Mod < 1.00 → better than average → premium credit.
- Mod > 1.00 → worse than average → premium debit.
Worked example — experience mod. A trucking fleet has a manual premium of $120,000 and an experience mod of 0.85 (good loss history). Modified premium = $120,000 × 0.85 = $102,000, an $18,000 credit. If the same fleet deteriorated to a mod of 1.20, the premium becomes $120,000 × 1.20 = $144,000, a $24,000 debit. This is why fleet safety programs directly reduce cost.
Layering example. Suppose the fleet then adds Hired Auto Physical Damage (CA 99 54) for $4,000 and a Lessor AI endorsement (CA 20 01) at no charge. Final premium on the 0.85 mod = $102,000 + $4,000 = $106,000. The mod applies to the rated exposure base; flat-charge endorsements are typically added after the mod is applied.
Traps
- DOC is for individuals without a personal auto policy — do not recommend it where a PAP already exists.
- Symbol 8 (hired) needs CA 99 54 to get physical damage; liability alone is automatic.
- A mod below 1.00 is favorable (credit). Candidates frequently invert this.
A trucking account has a manual premium of $200,000 and an experience modification factor of 0.90. After applying the mod, the insured adds a Hired Auto Physical Damage endorsement for a flat $5,000. What is the final premium?
A corporation's owner has no personal auto policy because the only vehicle is the company car titled to the corporation. To cover the owner while driving a borrowed personal-use car, the agent should add:
Drive Other Car (CA 99 10): Filling the Individual's Gap
Because the Business Auto form covers the named insured (often a corporation) and only persons using covered autos, an individual executive who does not personally own a car, but drives company and other vehicles, has gaps when driving a non-owned auto for personal use. The Drive Other Car endorsement extends liability, medical payments, and uninsured-motorist coverage to named individuals (and their spouses and family members) as though they had a personal auto policy, when they drive autos the company does not own. It is the standard solution for company-car executives with no personal auto policy, and a frequent exam answer.
Other Common Commercial Auto Endorsements
Additional commonly tested endorsements include Hired Auto and Non-Owned Auto liability (adding those exposures via symbols 8 and 9 where not already provided), Mobile Equipment Subject to Motor Vehicle Laws (covering equipment that must be registered), Lessor Additional Insured and Loss Payee (protecting a leasing company's interest), Pollution Liability Broadened Coverage for autos, and various Auto Medical Payments and Uninsured/Underinsured Motorist endorsements that add or adjust those coverages where state law requires offers.
Experience Rating and Premium Determination
Commercial auto premium reflects the number, type, use, and radius of operation of the vehicles, the limits selected, and the insured's loss history. Larger fleets may be experience-rated, adjusting premium up or down based on actual versus expected losses, while very large risks may use composite or self-rated approaches. The radius classification (local, intermediate, or long-haul) and the use classification (service, retail, commercial) significantly affect rates, so a delivery fleet operating long-haul routes pays far more than a service business with local-radius vehicles.
Endorsement and Coverage Traps
The exam tests several traps. An employee using a personal car on company business creates non-owned exposure that must be picked up with symbol 9; without it, only the employee's personal auto policy responds and the business is exposed if that policy is inadequate. A company executive with no personal auto policy needs Drive Other Car, not merely symbol 1, to be covered while driving a borrowed or rented car personally. A leased vehicle requires both the proper symbol for the lessee and a lessor additional-insured endorsement to satisfy the lease. Recognizing which endorsement closes a stated gap is the recurring skill.