1. Forms
2. CA
3. CA-20-13

What the form is

The CA 20 13 endorsement, titled "Leasing Or Rental Concerns – Schedule Of Limits For Owned Autos," is an Insurance Services Office (ISO) commercial auto endorsement. Its primary purpose is to allow leasing or rental companies to set different liability limits for various categories of their owned vehicles under a single policy. Standard Business Auto Policies (BAP) typically have a single limit of liability that applies to all covered autos. This endorsement modifies that by providing a schedule where the insured can specify different limits for distinct groups of owned autos.

Classes of business it applies to

This endorsement is specifically designed for businesses engaged in leasing or renting automobiles to others. This includes:

• Car rental agencies (short-term rentals)
• Automobile leasing companies (long-term leases)
• Any business where a significant portion of their operation involves owning a fleet of vehicles that are leased or rented out.

For example, a rental company might want higher liability limits for vehicles rented to the general public, over whom they have less control, and potentially lower limits for vehicles used by their own employees for company business. This endorsement facilitates such customized risk management.

Special considerations

The CA 20 13 is used when the standard Business Auto Coverage Form (CA 00 01) does not adequately address the varying liability exposures of a leasing or rental operation. Key considerations include:

• Need for Varying Limits: The primary driver for using this form is the need to apply different limits of liability to different sets of vehicles based on their use or the terms of lease/rental agreements. For instance, autos leased to individuals who are required to provide their own primary insurance might have different limits scheduled by the lessor compared to autos where the lessor's policy is primary.
• Scheduling: The endorsement requires a schedule to be completed, detailing the specific autos or classes of autos and the corresponding liability limits that apply to each. Precision in this schedule is crucial.
• Underlying Coverage: This endorsement modifies the underlying Business Auto Coverage Form; it does not provide coverage on its own.

Key information for agents and underwriters

For Agents:

• Identify if the client is a leasing or rental concern with a diverse fleet usage that would benefit from tailored liability limits.
• Explain how this endorsement allows for more precise (and potentially cost-effective) coverage by not applying a blanket high limit to all vehicles if not needed.
• Ensure the schedule is accurately completed to reflect the client's intentions for different vehicle groups.

For Underwriters:

• Assess the rationale behind the different limits requested for various vehicle classes. The risk associated with vehicles rented to the public without driver screening is different from vehicles leased long-term to businesses with good loss histories.
• Evaluate the overall risk profile of the leasing/rental operation, including their maintenance practices, rental agreements (especially insurance requirements for lessees/rentees), and loss history.
• Pricing will be influenced by the limits selected for each category of autos and the number of vehicles in each category. Higher limits or a larger proportion of vehicles in higher-risk categories will command higher premiums.
• Consider in conjunction with other relevant leasing and rental endorsements, such as CA 20 01 (Lessor – Additional Insured and Loss Payee) or CA 20 09 (Leasing or Rental Concerns – Contingent Coverage), to ensure comprehensive and appropriate coverage.