1. Forms
2. MM
3. MM-99-54

What the Form Is

The MM 99 54 is an endorsement to a commercial automobile insurance policy, specifically in Massachusetts. Its primary purpose is to add or modify Underinsured Motorists (UIM) Coverage. This coverage steps in to pay for bodily injuries sustained by an insured person when they are involved in an accident caused by another driver who has auto insurance, but whose liability limits are insufficient to cover the full extent of the insured's damages. This endorsement is used with forms like the Business Auto Coverage Form or the Truckers Coverage Form.

Classes of Business It Applies To

This endorsement applies to any business that has commercial auto exposures in Massachusetts and carries a commercial auto policy. Examples include:

• Businesses with a fleet of vehicles for salespersons or service technicians.
• Delivery companies, such as local couriers or food delivery services.
• Contractors who use trucks and vans for their work (e.g., plumbers, electricians, construction companies).
• Transportation companies, including trucking operations that operate within or through Massachusetts.
• Any organization that owns, leases, or hires autos for business use in Massachusetts.

For instance, a Massachusetts-based plumbing company with several vans would add this endorsement to its Business Auto Policy to protect its employees if one of them is injured by an at-fault driver who carries only the minimum state-required liability limits, and those limits are not enough to cover the employee's medical expenses and lost wages.

Special Considerations

There are several important points to consider regarding the MM 99 54 endorsement:

• Massachusetts Specific: This form is tailored to meet the specific requirements and regulations for Underinsured Motorists Coverage in the Commonwealth of Massachusetts.
• Limits of Coverage: The limits selected for UIM coverage are crucial. Typically, UIM limits cannot exceed the Bodily Injury liability limits chosen for the main policy. Insureds should carefully consider their potential exposure when selecting these limits.
• Interaction with Other Coverages: UIM coverage is distinct from Uninsured Motorists (UM) coverage (often addressed by a separate endorsement like MM 99 28 ), although they both aim to protect the insured from inadequately insured drivers. UIM applies when the at-fault driver has insurance, but not enough.
• Commonwealth Automobile Reinsurers (CAR): For businesses in the Massachusetts residual market, specific rules from CAR may apply to this coverage.

For example, if an insured has selected UIM limits of $250,000 per person / $500,000 per accident, and they incur $100,000 in medical bills from an accident caused by a driver with only $20,000 in Bodily Injury liability coverage, the at-fault driver's policy would pay its $20,000, and the insured's UIM coverage could then cover the remaining $80,000, up to the UIM policy limit.

Key Information for Agents and Underwriters

• Agents: It is vital for agents to explain the benefits and importance of UIM coverage to their clients, especially in a compulsory insurance state like Massachusetts. They should guide clients in selecting appropriate limits that align with their overall risk management strategy and the Bodily Injury limits on their policy. Agents must also ensure compliance with any state-specific offer or rejection requirements for UIM coverage.
• Underwriters: Underwriters need to assess the risk associated with providing UIM coverage. While the primary risk lies with the at-fault driver, the insured's driving history, the types of vehicles insured, and their usage can influence the potential for UIM claims. Pricing for this endorsement will be based on the limits selected and the overall risk profile of the insured. Underwriters should also be familiar with the latest CAR rules and Massachusetts insurance regulations pertaining to UIM coverage to ensure policies are issued correctly. They should verify that the UIM limits are consistent with the policy's Bodily Injury limits.