1. Forms
2. CA
3. CA-25-01

Form CA 25 01: Uninsured Motorists Coverage (Commercial Auto)

1. What the form is:

Form CA 25 01, Uninsured Motorists Coverage, is an endorsement to a Commercial Auto policy, specifically designed to be used with the CA 00 01 Business Auto Coverage Form. Its primary purpose is to provide financial protection to an "insured" for bodily injury sustained in an accident caused by the owner or operator of an "uninsured motor vehicle." This coverage also typically extends to situations involving hit-and-run drivers or drivers whose insurance company has become insolvent. It's important to note that this endorsement generally covers bodily injury, and property damage may be addressed separately or not at all, depending on state regulations and policy specifics. In California, for instance, Uninsured Motorist Property Damage (UMPD) is a separate coverage with a specific limit.

2. Classes of business it applies to:

This endorsement is broadly applicable to any business that utilizes vehicles in its operations and carries a Commercial Auto policy (using form CA 00 01). Real-world examples include:

• A contracting company whose employees drive company-owned trucks to various job sites. If an employee is injured by an uninsured driver while operating a company vehicle, this coverage would apply.
• A sales-based business where employees use company cars to visit clients. Should an employee be hit and injured by a driver who flees the scene (hit-and-run), this endorsement would provide benefits.
• Delivery services, whether for goods or food, where drivers are operating company-owned vehicles.
• Businesses that transport guests or clients, such as a hotel shuttle service. If a shuttle driver and passengers are injured by a motorist whose insurer becomes insolvent, this coverage could respond.

Essentially, any business with employees operating company vehicles on public roads faces exposure to uninsured or underinsured motorists and would benefit from this coverage.

3. Special considerations:

• Mandatory Offering/Rejection: In many states, insurers are required to offer Uninsured Motorists Coverage, and the named insured must formally reject it in writing if they do not wish to purchase it. California law, for example, mandates that insurers offer this coverage, and a waiver must be signed if it's declined.
• Limits of Liability: The limits for Uninsured Motorists Coverage are often tied to the Bodily Injury liability limits chosen for the main auto policy, but they can sometimes be lower. It's crucial to ensure these limits are adequate, as underinsured motorist situations (where the at-fault driver has insurance, but not enough) can still leave significant gaps. In California, if an at-fault driver has liability limits equal to or higher than your Uninsured Motorist limits, you may not be able to collect under your UMC.
• Definition of "Uninsured Motor Vehicle": This definition is key and typically includes vehicles with no bodily injury liability insurance, vehicles with less than the financial responsibility limits, hit-and-run vehicles where the driver cannot be identified, and vehicles insured by an insolvent insurer.
• Interaction with Other Coverages: Payments under this endorsement may be reduced by amounts paid by or on behalf of the uninsured motorist, or by other coverages like workers' compensation if the injury occurs during employment. It's also important to understand that UM/UIM coverage typically doesn't duplicate payments made under Medical Payments coverage or other endorsements.
• Property Damage: As mentioned, CA 25 01 primarily addresses bodily injury. Uninsured Motorist Property Damage (UMPD) is often a separate coverage or may not be available in all states or situations. In California, UMPD has a specific limit (e.g., $3,500) and may not be necessary if the insured has Collision coverage. Commercial vehicles used for transporting people for hire may have limitations on UMPD.
• Hit-and-Run Requirements: For hit-and-run incidents, there are usually specific requirements, such as physical contact with the hit-and-run vehicle and prompt reporting to the police.

4. Key information for agents and underwriters:

• Pricing: The premium for UM coverage will depend on the limits selected, the number and types of vehicles insured, the territory of operation, and the insured's loss history. Agents should explain the value of adequate limits, as state minimums are often insufficient to cover severe injuries.
• Risk Assessment: Underwriters will consider the same factors as for the primary auto liability, but also the likelihood of employees being involved in accidents where the other party is uninsured. This can vary by territory. Statistics show a significant percentage of drivers are uninsured.
• Coverage Gaps: Agents should highlight potential gaps, such as insufficient limits or the exclusion of property damage if not separately covered. If a business has employees using their own vehicles for company business, Hired and Non-Owned Auto Liability coverage (often an add-on to a General Liability or Business Owner's Policy) becomes crucial, and the interaction with the employee's personal UM coverage should be understood.
• Underwriting Guidelines:
  • Confirm that the CA 25 01 is being attached to a CA 00 01 Business Auto Coverage Form.
  • Verify that the limits offered and selected comply with state requirements, including any mandatory offering and rejection procedures.
  • Assess the insured's need for higher limits based on their employee base, travel frequency, and potential severity of injuries.
  • Clarify if Uninsured Motorist Property Damage is included or needs to be added separately, and explain its limitations.
  • Ensure the named insured understands how this coverage interacts with other potential recovery sources like workers' compensation or health insurance.
• Relationship to CA 00 01: The CA 25 01 modifies the CA 00 01. The definitions, conditions, and other provisions of the CA 00 01 apply to the UM coverage unless specifically amended by the CA 25 01 endorsement. For example, the "Covered Autos" designation symbols selected on the declarations page of the CA 00 01 will dictate which vehicles have UM coverage. Symbol 6 on the CA 00 01 specifically pertains to owned autos subject to a compulsory uninsured motorists law.