12.4 NC Rate Bureau Personal Auto Optional Endorsements (NC 03 02, NC 03 03, NC 03 06, NC 03 15)
Key Takeaways
- North Carolina personal auto business is written on North Carolina Rate Bureau forms, and the adjuster blueprint names four optional endorsements by form number.
- Endorsement NC 03 03 provides Towing and Labor Costs Coverage, reimbursing towing and on-site labor at the place of disablement.
- Endorsement NC 03 02 provides Extended Transportation Expenses Coverage, broadening rental reimbursement beyond the limited theft-only transportation expense in the base form.
- Endorsement NC 03 06 provides Extended Non-Owned Coverage for a named individual who regularly uses vehicles not owned by them.
- Endorsement NC 03 15 relates to Coverage for Damage to Your Auto, the physical damage part of the North Carolina Personal Auto Policy.
12.4 NC Rate Bureau Personal Auto Optional Endorsements (NC 03 02, NC 03 03, NC 03 06, NC 03 15)
The North Carolina adjuster content outline devotes fifteen scored questions to the Personal Auto Policy, and it is explicit that the subject is the North Carolina Rate Bureau form — not the countrywide ISO PAP. Within that domain, the outline lists a sub-topic called Other coverages available and names four endorsements by form number:
| Form | Endorsement |
|---|---|
| NC 03 03 | Towing and Labor Costs Coverage |
| NC 03 02 | Extended Transportation Expenses Coverage |
| NC 03 06 | Extended Non-Owned Coverage |
| NC 03 15 | Coverage for Damage to Your Auto |
The North Carolina Rate Bureau (NCRB) is the statutory rating organization that files personal auto rates, rules, and forms for North Carolina. Its endorsements carry an NC prefix rather than the PP prefix of countrywide ISO personal auto endorsements. A candidate who has studied a national auto course will recognize the coverage concepts but not the form numbers, and the form numbers are what the blueprint lists.
1. Why the Base Form Makes These Endorsements Necessary
The base Personal Auto Policy is narrower than most insureds assume in two specific places.
Transportation Expenses in the Base Form
Under Part D — Coverage for Damage to Your Auto, the base form provides only a limited transportation expenses benefit, and its principal trigger is total theft of a covered auto, subject to a waiting period and a modest daily and aggregate cap. A vehicle that is undriveable after a collision does not produce a rental benefit under the base grant.
That gap is the entire reason NC 03 02 exists.
Towing in the Base Form
The base form provides no roadside towing or labor coverage at all. Physical damage coverage pays to repair the vehicle; it does not pay to get a disabled vehicle off the shoulder of I-40. That gap is why NC 03 03 exists.
2. NC 03 03 — Towing and Labor Costs Coverage
What it does: reimburses the insured for towing and labor costs incurred because of the disablement of a covered auto, with the labor performed at the place of disablement.
| Element | Rule |
|---|---|
| Trigger | Disablement — the vehicle cannot be driven. A collision is not required |
| Covered | Towing to a repair facility; on-scene labor such as jump-starting, tire changing, lockout service, or delivering fuel |
| Not covered | The cost of the parts or fluids themselves, and any labor performed after the vehicle reaches the shop |
| Limit | A per-disablement amount selected by the insured and shown in the declarations |
| Deductible | None |
The recurring trap: labor coverage stops at the place of disablement. A tow to the shop plus a roadside jump-start is covered. The mechanic's diagnostic and repair labor at the shop is not — that is a physical damage or maintenance question, not a towing and labor question. Likewise, the gallon of fuel delivered is the insured's cost; the delivery is covered.
3. NC 03 02 — Extended Transportation Expenses Coverage
What it does: broadens the base form's narrow theft-only transportation benefit so that rental or substitute transportation expense is available when a covered auto is withdrawn from use because of a covered loss, not merely when it is stolen.
| Element | Rule |
|---|---|
| Trigger | Loss to a covered auto under Part D that makes it unavailable for use |
| Requires | The underlying physical damage coverage for the peril causing the loss. Extended transportation expense follows collision if collision is carried, and follows other than collision if other than collision is carried |
| Benefit | A daily amount up to a maximum aggregate, both selected by the insured and shown in the declarations under the North Carolina Personal Auto Manual rules |
| Duration | Runs during the reasonable period required to repair or replace the vehicle |
Coverage-follows rule. This is the most tested point on the endorsement. An insured who carries other than collision only and suffers a collision loss has no physical damage coverage for that loss, so extended transportation expense does not respond either. The endorsement broadens when transportation expense is payable; it does not create physical damage coverage that was never purchased.
Worked example. A Durham insured carries collision with a $500 deductible and NC 03 02 with a selected daily limit and aggregate maximum. The insured's vehicle is struck and is in the body shop for eleven days. Collision pays the repair less the deductible; NC 03 02 reimburses the rental at the selected daily amount for the eleven days, capped by the aggregate maximum. Had the same insured carried no collision coverage, the rental would not be payable, because the underlying loss would be uncovered.
4. NC 03 06 — Extended Non-Owned Coverage
What it does: extends liability, and where applicable medical payments and uninsured motorists, to a named individual for the regular use of vehicles not owned by that individual.
The base Personal Auto Policy excludes liability arising from a vehicle furnished or available for the regular use of the named insured or a family member. That exclusion exists so an insured cannot insure one car and drive a second regularly-available car for free.
| Situation | Base form result | With NC 03 06 |
|---|---|---|
| A driver who does not own a car but regularly uses a company vehicle | Excluded — regular use | Liability extended to the named individual |
| A driver with regular access to a family member's separately insured vehicle | Excluded — regular use | Extended for the person named on the endorsement |
| An insured borrowing a friend's car once | Already covered as a non-owned auto | Unchanged |
Key operating rule: the endorsement is person-specific. It names the individual to whom the extension applies, not a class of drivers. Coverage is excess over any insurance available on the vehicle being driven.
Adjuster consequence: on a loss involving a driver operating a regularly-available non-owned vehicle, the first document to read is the declarations. Without NC 03 06 naming that driver, the regular-use exclusion applies and the personal auto policy does not respond.
5. NC 03 15 — Coverage for Damage to Your Auto
The blueprint lists NC 03 15 under Other coverages available and identifies it with Coverage for Damage to Your Auto — the physical damage part of the North Carolina Personal Auto Policy addressed in Section 12.3.
What the adjuster must take from this listing is procedural rather than substantive: North Carolina physical damage terms are set by NCRB forms and endorsements, and the applicable edition must be read from the declarations. Physical damage on a North Carolina personal auto file is not adjusted from memory of a countrywide form.
The Practical Checklist
Before taking a coverage position on any North Carolina personal auto claim:
- Identify the NCRB form and edition shown on the declarations.
- List every attached NC-prefix endorsement and read each one.
- Confirm which physical damage coverages were actually purchased — collision, other than collision, or both.
- Confirm whether NC 03 02 or NC 03 03 is attached before discussing rental or towing with the insured.
- Where a non-owned vehicle is involved, check for NC 03 06 naming the driver.
Exam Focus
- NC 03 03 = towing and labor; labor only at the place of disablement; parts and fluids are not covered.
- NC 03 02 = extended transportation expenses; it follows the underlying physical damage coverage.
- The base form's transportation expense benefit is essentially theft-driven; NC 03 02 broadens it to any covered Part D loss.
- NC 03 06 = extended non-owned coverage; it defeats the regular use exclusion for a named individual and is excess.
- NC 03 15 relates to Coverage for Damage to Your Auto; always adjust North Carolina physical damage from the NCRB form on the declarations.
A North Carolina insured carries other than collision coverage only, with endorsement NC 03 02 attached. The insured's vehicle is disabled in an at-fault collision and is in the shop for nine days. Is the rental expense payable under NC 03 02?
An insured with endorsement NC 03 03 has a covered auto towed from the roadside to a repair shop after the engine seizes. The tow costs $180, a roadside attempt to restart the vehicle cost $95, and the shop then charges $640 in diagnostic and repair labor. What does the endorsement reimburse?
A North Carolina insured who owns no vehicle drives an employer-furnished truck daily and is at fault in a collision while running a personal errand in it. The insured's personal auto policy has no NC 03 06 endorsement. How does the personal auto policy respond?
Why does the North Carolina adjuster content outline identify personal auto endorsements by NC-prefixed form numbers rather than the countrywide PP-prefixed ISO numbers?