Common Questions: Commercial Auto Insurance Filings

What’s on the endorsement?

The endorsement states that the insurer agrees to pay,  within the limits of liability described on the policy, any final judgment  recovered against the insured for public liability resulting from  negligence in the operation, maintenance or use of motor vehicles  subject to the financial responsibility requirements regardless of whether or  not each motor vehicle is specifically described in the policy and  whether or not such negligence occurs on any route or in any  territory authorized to be served by the insured or elsewhere.

Why can’t I have multiple insurance policies when I have a filing?

The endorsement that is reflected by the filing requires that all vehicles used or owned by the business be covered by the policy regardless of whether the vehicle is listed on the policy.  This means that the insurance company (that does the filing) is covering all vehicles operated under your authority whether they were reported or not, even if you have a separate policy for one or more vehicles.  This includes rentals, borrowed vehicles, and non-owned vehicles used in the business. 

Why do I have to provide a Bill of Sale of DMV proof of Non-Operation?

Since your policy requires that any and all vehicles used or owned by the business be covered by the policy, they must insure all vehicles even when they are parked.  A Bill of Sale of DMV Non-Op will show proof that the vehicle(s) are not being used in the operations. 

Why are they filing a lower limit then what we have on the policy?

The endorsement may require that your policy cover items that would not be normally covered (or to the extent that is required) such as environmental restoration.  Some policies will not cover environmental restoration or limit the coverage.  However, when a filing and endorsement are attached to the policy then the insurance company may have to cover a claim that they might not have been obligated to otherwise.  In consideration of this, the insurance company will file the limit that is required by the state or fed, even if that limit is lower than the policy.  For example, you may have a policy limit of $1M but the insurance company files at $750K.  This limits any exposure that might not have been covered normally.  

Filing a lower limit can be to the benefit of the policyholder.  The endorsement/filing states that any amount that is paid by the policy and not covered under the normal terms can be recouped by the insurance company to the policyholder.  In other words, the filing/endorsement may force the insurance company to pay an amount that is not covered.  So, in this scenario they can recoup the uncovered amount from the policyholder – by filing a lower limit than what’s on the policy, it can limit the potential out of pocket expenses for the policyholder. 

Can you, as my agent, do the filing?

No, the insurance filing is sent directly by the insurance company to the state or federal department that requires it.  The agent/broker can make the request to the insurance company but we cannot do it.  Since we rely on the insurance company to send the filing, we also rely on their turnaround times which vary anywhere from a few hours to multiple days.