I had a Q&A with an agent (see below) which caused me to add a caveat. The article is based on ISO forms and rules. If you’re dealing with non-ISO forms, which is often the case, there may be exclusionary language under one policy dealing with vehicles that are declared on other policies. So, it’s critical that you discuss these situations with the carrier. Here’s my conversation with the agent, with my comments preceded by “***”….
if you would, i have a few questions in order to further my understanding of how to handle this same situation.
(1) i wouldn’t think you would cancel the bap coverage on the truck since the road rally is an isolated occurrence even if repeated occasionally. if that is correct, then when adding the truck onto his pap are you putting any coverage on the truck in jeopardy due to different policies covering the same vehicle?
*** My comments were regarding ISO policy forms and I know agents who have done this many times. There’s no problem with ISO forms, but you could be right if you’re dealing with non-ISO forms. You may have a form that excludes coverage if the vehicle is insured elsewhere. I’ll add this conversation to the article’s Comments section and make a caveat…good point.
(2) if have both a bap & pap coverage on the same vehicle doesn’t invalidate any/all coverage for the vehicle, would it be beneficial to have both the bap & pap through the same company?
*** It’s often a good idea to have coverage with the same company, but the ISO ENO endorsement is designed to add excess coverage above what is available on the primary policy on which the vehicle is declared. Again, here we’re talking about ISO forms and rules.
(3) if the answer to #2 is yes, would you think this would invoke any push back from the company?
*** I think it’s probably fairly rare to have both the PAP and BAP in the same company. I never had a problem getting the endorsement with any carrier, but that was some time ago. Again, I know agents who use this endorsement extensively whenever they have an insured who has a company car.
(4) if the bap company is different from the insured’s pap, should the insured have a claim, would this throw the claim into an seemingly endless denial and refusal for both companies to honor their policies by some exclusionary language?
*** Possibly if we’re dealing with non-ISO forms. Otherwise, the BAP is going to be primary and the PAP excess. Coordination of defense and litigation could be more complicated, especially if there are umbrellas involved, but if you’re dipping into multiple policies, the claim is probably so significant, that this complexity is worth dealing with vs. inadequate limits.
I have no urgency for your answers, so please answer at your convenience, and please include anything i haven’t thought of. I just want to understand this particular issue better since the majority of my commercial book is small business and this is something that could happen in one form or another to one of those clients.
*** It might be worthwhile to share the article with your carriers and get their feedback in advance. How would each carrier, BAP and PAP, treat a claim involving a vehicle insured on the BAP but also covered on the PAP by an ENO endorsement.
I had a Q&A with an agent (see below) which caused me to add a caveat. The article is based on ISO forms and rules. If you’re dealing with non-ISO forms, which is often the case, there may be exclusionary language under one policy dealing with vehicles that are declared on other policies. So, it’s critical that you discuss these situations with the carrier. Here’s my conversation with the agent, with my comments preceded by “***”….
if you would, i have a few questions in order to further my understanding of how to handle this same situation.
(1) i wouldn’t think you would cancel the bap coverage on the truck since the road rally is an isolated occurrence even if repeated occasionally. if that is correct, then when adding the truck onto his pap are you putting any coverage on the truck in jeopardy due to different policies covering the same vehicle?
*** My comments were regarding ISO policy forms and I know agents who have done this many times. There’s no problem with ISO forms, but you could be right if you’re dealing with non-ISO forms. You may have a form that excludes coverage if the vehicle is insured elsewhere. I’ll add this conversation to the article’s Comments section and make a caveat…good point.
(2) if have both a bap & pap coverage on the same vehicle doesn’t invalidate any/all coverage for the vehicle, would it be beneficial to have both the bap & pap through the same company?
*** It’s often a good idea to have coverage with the same company, but the ISO ENO endorsement is designed to add excess coverage above what is available on the primary policy on which the vehicle is declared. Again, here we’re talking about ISO forms and rules.
(3) if the answer to #2 is yes, would you think this would invoke any push back from the company?
*** I think it’s probably fairly rare to have both the PAP and BAP in the same company. I never had a problem getting the endorsement with any carrier, but that was some time ago. Again, I know agents who use this endorsement extensively whenever they have an insured who has a company car.
(4) if the bap company is different from the insured’s pap, should the insured have a claim, would this throw the claim into an seemingly endless denial and refusal for both companies to honor their policies by some exclusionary language?
*** Possibly if we’re dealing with non-ISO forms. Otherwise, the BAP is going to be primary and the PAP excess. Coordination of defense and litigation could be more complicated, especially if there are umbrellas involved, but if you’re dipping into multiple policies, the claim is probably so significant, that this complexity is worth dealing with vs. inadequate limits.
I have no urgency for your answers, so please answer at your convenience, and please include anything i haven’t thought of. I just want to understand this particular issue better since the majority of my commercial book is small business and this is something that could happen in one form or another to one of those clients.
*** It might be worthwhile to share the article with your carriers and get their feedback in advance. How would each carrier, BAP and PAP, treat a claim involving a vehicle insured on the BAP but also covered on the PAP by an ENO endorsement.