9.5 Garage and Truckers Coverage Forms

The Garage / Auto Dealers Form

The Garage Coverage Form insures businesses whose core operation is autos — and combines coverages a standard BAP and a separate general liability policy would otherwise split. ISO modernized the dealer market with the Auto Dealers Coverage Form (CA 00 25) for franchised and used-car dealers; smaller non-dealer auto risks (repair shops, service stations) are handled on the business auto/garage approach. The defining feature is that a single form provides both auto liability and premises/operations (general) liability.

What the Form Bundles

Garagekeepers — Bailee Coverage for Customer Cars

When a shop takes custody of a customer's vehicle, it becomes a bailee. Garagekeepers coverage pays for damage to those customer autos from covered causes — fire, theft, vandalism, collision, and other perils — while in the insured's care. It comes in three flavors:

Exam point: Under legal liability, if a customer's car is stolen with no negligence by the shop, there is no payment. Under direct primary, the shop's policy pays first even without fault — the reason busy dealerships prefer it.

Truckers and Motor Carrier Forms

Long-haul and for-hire trucking risks use trucking-specific forms. The Truckers Coverage Form was the original; ISO's Motor Carrier Coverage Form (CA 00 12) is now the common choice because it suits both private and for-hire carriers and incorporates trailer-interchange handling.

Trailer Interchange

Carriers swap trailers under written interchange agreements. Trailer interchange coverage insures the insured's legal liability for physical damage to a non-owned trailer in its possession under such an agreement (comprehensive, specified causes, or collision can apply). It does NOT cover owned trailers — those are covered as autos.

Federal Financial Responsibility — the MCS-90

Interstate for-hire carriers must prove financial responsibility under 49 CFR Part 387. The MCS-90 endorsement is attached to the auto liability policy and acts as a surety-like guarantee: the insurer will pay a judgment to a member of the injured public even if the specific loss would otherwise be excluded or uncovered — though the insurer can then seek reimbursement from the insured.

The BMC-91 / BMC-91X is the FMCSA filing that evidences this coverage (a surety bond, BMC-85, is the alternative). The MCS-90 protects the public, NOT the insured's own cargo or property — those still require cargo/physical-damage coverage.

Exam Cheat Sheet

1. Garage/Auto Dealers form = auto liability + premises/operations in one form.
2. Garagekeepers = bailee coverage; three options — legal liability, direct primary, direct excess.
3. Trailer interchange = non-owned trailers under written agreement only.
4. MCS-90 = guarantees payment to the injured public; $750K / $1M / $5M tiers.
5. Cargo is never covered by liability or the MCS-90 — buy motor truck cargo.

Garagekeepers: a Closer Worked Example

A detail shop holds eight customer cars overnight. A fire (no negligence by the shop) destroys three of them.

This is why high-volume dealers and valet operations almost always buy direct primary — it protects the customer relationship even when the business did nothing wrong.

Motor Truck Cargo — the Missing Piece

Neither liability, the MCS-90, nor garagekeepers insures freight the carrier is hauling for others. Motor truck cargo coverage (an inland marine line) insures the carrier's legal liability for loss to the property of others in transit. It is rated by commodity and limit per vehicle and is required by many shippers and brokers before a load is tendered. The exam pairs this with the care-custody-control exclusion: liability excludes cargo; cargo coverage fills the gap.

Form Selection Decision Table

Common Federal-Filing Confusions

• The MCS-90 protects the public, not the insured — and the insurer can recover from the insured what it pays under it.
• Intrastate carriers follow state minimums, which may differ from the federal $750K/$1M/$5M tiers.
• A BMC-91/BMC-91X is the FMCSA filing evidencing public-liability coverage; BMC-34/BMC-83 relate to cargo filings for household-goods and certain carriers.