1. Forms
2. DL
3. DL-01-04

What the form is

The DL 01 04 Special Provisions - California endorsement is a mandatory form used to amend standard personal lines insurance policies to conform with California-specific laws, regulations, and insurance code requirements. Its primary function is to ensure that the policy contract accurately reflects the legal landscape of California, which may include unique consumer protection laws, coverage mandates, or specific wording requirements that differ from standard industry forms.

Classes of business it applies to

This endorsement applies to personal lines insurance policies written in the state of California. Specific programs where this form is commonly used include:

• Dwelling Liability: For policies covering the liability exposures of dwellings.
• Homeowners Insurance: Attached to homeowners policies (e.g., HO-3) to modify terms according to California law.
• Comprehensive Personal Liability: Used with standalone personal liability policies to ensure California compliance.
• Dwelling Property: While DL 01 04 is for liability, a corresponding DP 01 04 Special Provisions - California often applies to the property coverage aspects of dwelling policies.

Real-world example: A California resident purchasing a homeowners insurance policy will likely find the DL 01 04 (or a similar HO 01 04) endorsement included in their policy documents. This ensures that provisions related to, for example, cancellation, non-renewal, or specific coverage interpretations align with California statutes.

Special considerations

• Mandatory for California Policies: Insurers writing applicable personal lines business in California are generally required to use this endorsement, or an equivalent state-specific form, to ensure their policies are compliant.
• Edition Dates are Critical: California laws and regulations can change. Insurers issue new editions of this form (e.g., DL 01 04 02 00, DL 01 04 09 06, DL 01 04 10 11) to reflect these changes. It's crucial to use the correct edition date corresponding to the policy's inception and the current legal requirements. For instance, past changes have addressed non-renewal conditions based on pending claims or the age of the insured.
• Impact of Legislation: The content of this endorsement is directly influenced by California legislative actions and Department of Insurance regulations.

Real-world example: If California passes a new law regarding the notice period for policy non-renewal, the DL 01 04 endorsement would be updated by ISO or the specific insurer to incorporate this new requirement, and policies issued or renewed after the law's effective date would need to include the updated endorsement.

Key information for agents and underwriters

• Ensuring Compliance: Agents must ensure this endorsement is included in all relevant California personal lines policies. Underwriters must verify its presence and the use of the correct edition date.
• Understanding State-Specific Modifications: Both agents and underwriters need to be familiar with how this endorsement alters the base policy. This includes understanding any state-specific definitions, conditions, or exclusions introduced by the DL 01 04. For example, provisions regarding how cancellations or non-renewals can be executed are often detailed.
• Risk Assessment: While the endorsement itself is a compliance tool, the California-specific provisions it contains can impact risk assessment. For example, limitations on underwriting or claims handling practices mandated by California law and reflected in this form are important for underwriters to consider.
• No Direct Premium Charge: Typically, there is no separate premium charge for this endorsement itself. The cost is incorporated into the overall premium for the policy, which is rated based on California's approved rating rules.
• Related California Forms: This endorsement often works in conjunction with other California-specific forms or notices, such as those related to information practices or specific coverage limitations.