Business Auto Policy Covered Auto Designation Symbols
April 2005
Illinois, Arizona, and Louisiana have expanded
uninsured motorist/underinsured motorist (UM/UIM) coverage to hired and nonowned
autos. This influences which covered auto designations should be used.
by Maureen McLendon
IRMI
A subscriber recently posed a question concerning the appropriate business
auto policy (BAP) covered auto designation symbol(s) to indicate uninsured motorist/underinsured
motorist (UM/UIM) bodily injury coverage for hired and nonowned autos in Illinois,
as required pursuant to the Illinois Appellate Court decision in Harrington v American Family Mut. Ins. Co., 332
Ill App 3d 385, 773 NE2d 98 (2002). Since Illinois autos are subject to a compulsory
UM law, Symbol 6 (owned autos subject to a compulsory uninsured motorist law)
is the usual symbol used to denote such coverage.
The “problem” is twofold—that Symbol 6 applies only to autos the named insured
owns or acquires, and that Symbols 8 (hired autos only) and 9 (nonowned autos
only) were not contemplated by Insurance Services Office, Inc. (ISO), for use
with UM/UIM, according to a circular issued a number of years ago.
Keep in mind that the ISO circular was issued as a guideline, and that at
the time it was issued, UM/UIM statutes and case law were much less broad than
they are today. Consequently, there was no need for designating hired autos
and nonowned autos as covered autos for uninsured motorists or underinsured
motorists.
Illinois is the third such state to expand UM/UIM coverage to hired and nonowned
autos. Arizona, while allowing insureds to reject coverage, nevertheless requires
coverage for all autos on the policy if coverage applies at all. Louisiana also
requires UM/UIM bodily injury coverage for hired and nonowned autos if they
are covered for liability coverage under the policy (unless it is rejected for
all covered autos). Using a combination of Symbols 8 (hired autos only) and
9 (nonowned autos only), together with Symbol 6, is the correct approach for
Illinois; and a combination of Symbols 2 (owned autos only), 8, and 9 would
be appropriate for Arizona and Louisiana.
Look for more discussion of these matters, especially as respects no-fault
coverage, in upcoming supplements to
Commercial Auto Insurance.
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author’s employer or IRMI. This article does not purport
to provide legal, accounting, or other professional advice or opinion. If such advice
is needed, consult with your attorney, accountant, or other qualified adviser.