Texas Auto Dealers Coverage Form

The two policy forms most used in Texas are the Auto Dealers Coverage Form and Garage Coverage Form.  The data included here is based on the Auto Dealers Coverage Form and is not intended to provide all the nuances and/or explanations of every coverage and/or exclusion.

For the purposes of this narrative, we will hit only on the ‘high spots’ and those I believe to be of most interest to the typical Independent Auto Dealer.

The first few pages of every insurance policy are called the Declaration Pages.  These pages will include:

ITEM ONE

• The name of the company providing the protection

• The name of your agent

• The named insured. Check this area carefully to be certain your business name and address are correctly shown.   If you are to be named individually, your name should be included here.  Be sure your business form is properly indicated as sole proprietorship, corporation, partnership, limited liability company or whatever is the proper designation.

• The next completed of interest is the premium. Note there is also a section to state whether the policy may be audited and, if so, on what terms.  Most liability policies are subject to annual audit, but more often not, garage policies are NOT actually audited.    You should check this closely to avoid any ‘gotchas’.  Garage premiums are based on, among other things, who works there and what they do.  If a policy is audited, the insurance company will require proof of employee changes, etc.  For instance, if the policy was written with two owners only, but the audit reveals a lot person, a mechanic, someone with a furnished auto, contract drivers, whatever the audited real history is, there will be a premium adjustment made.   The reasoning is: Audited policies provide coverage based on the real circumstances regardless of interim company reporting.  That is rarely true with non-audited garage liability policies, i.e. coverage is provided only as originally presented and subject to whatever endorsements the insured may have requested during policy term.

ITEM TWO

• The next pertinent section lists the various coverages available. If there is not a covered auto symbol, a limit and/or a premium shown for a particular coverage, there is no protection provided unless the word ‘included’ is shown in the premium area.

• Auto Symbols are important. The ones you are most likely to see next to your covered auto limits are:
  1. Symbol 21 — Any auto. This is the broadest auto liability available under a garage policy.
  2. Symbol 22 – Owned autos only and any non-owned trailer attached to an owned vehicle.
  3. Symbol 23 – Private passenger autos only
  4. Symbol 27 – Specifically Scheduled autos, such a service vehicle or designated auto
  5. Symbols 29 – Non-owned autos used in connection with business.

• • The other areas where auto symbols are likely to appear are:
    1. Personal Injury Protection and Un-Underinsured Motorist– Probably 22 or 25 or 26 or 27 – Vehicles subject to non-fault protection requirements.
    2. Auto Medical Payments – Symbol 22 or 27
    3. Garagekeepers -Symbol 30 – Cars you do not owned, but in your care, custody and control for service, repair, storage or safekeeping
    4. Physical Damage – Symbol 31 – Vehicles you own outright or may be financed and/or consignment vehicles held for sale.

• Areas where premium and/or limits may be listed when coverage is provided:
  1. General Liability
  2. Locations and Operations Medical Payments
  3. Dealers Errors & Omissions
  4. Premium For Endorsements

ITEM THREE

• This area lists your location addresses.  Review to be certain they correctly shown and that all locations are listed.  If you have more than three, they may be listed by endorsement