1. Forms
2. MM
3. MM-20-26

What the Form Is

The MM 20 26 Lessor - Additional Insured and Loss Payee - MA is an endorsement to a commercial automobile insurance policy specifically for use in Massachusetts. Its primary function is to amend the policy to recognize the lessor (the owner of a leased vehicle) as an "additional insured" for liability coverage and as a "loss payee" for any physical damage to the vehicle. This means that if the leased vehicle is involved in an accident, the lessor is provided with liability protection under the policy and will also be compensated for direct accidental loss or damage to the vehicle, as their interest may appear. The endorsement clarifies that a "leased auto" designated in the schedule will be considered a covered "auto" owned by the insured (the lessee) and not a hired or borrowed auto for the purposes of the lessor's coverage.

Classes of Business It Applies To

This endorsement is used for businesses in Massachusetts that lease vehicles rather than owning them outright. Examples include:

• Businesses with sales fleets that are leased.
• Contractors who lease trucks or vans for their operations.
• Delivery services or transportation companies that utilize leased vehicles.
• Any commercial entity in Massachusetts that has a leasing agreement requiring them to provide primary insurance for the lessor.

Special Considerations

• Massachusetts Specific: This form is specifically designated for use in Massachusetts.
• Primary Insurance Requirement: It is typically used when the lease agreement stipulates that the lessee (the business leasing the vehicle) must provide primary insurance coverage for the lessor.
• Lessor Not Liable for Premiums: The endorsement usually states that the lessor is not responsible for the payment of the policy premiums.
• Coverage Duration: The coverage provided by this endorsement for a leased auto applies until the expiration date shown in the schedule or when the lessor or their agent retakes possession of the auto, whichever occurs first.
• Cancellation Notification: The policy conditions regarding cancellation are amended to ensure that the lessor is notified if the policy is cancelled by either the insurer or the insured.

Key Information for Agents and Underwriters

• Risk Assessment: When this endorsement is requested, underwriters should review the lease agreement to understand the insurance requirements and the nature of the leased vehicle's use.
• Proper Designation: It's crucial to accurately list the lessor's name and address in the schedule of the endorsement to ensure coverage applies correctly.
• Coverage Scope: Agents should explain to the insured (lessee) that this endorsement extends coverage to the lessor, which is often a contractual requirement. It protects the lessor's financial interest in the vehicle.
• Premium Impact: Adding a lessor as an additional insured and loss payee might have an impact on the premium, and this should be communicated to the insured. Some rating rules indicate a multiplication factor to the liability rates when the owner is added as an additional insured.
• Associated Forms: This endorsement may be used in conjunction with other forms, such as the MM 20 25 (Additional Insured – Owner of Leased Vehicle Endorsement), depending on the specifics of the leasing arrangement. It is typically attached to a Business Auto Coverage Form, Garage Coverage Form, or Truckers Coverage Form.