CAARP Introduction, Part IV: Commercial Auto


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Application Process

The applicant and agent must submit a fully completed original application form or the original application produced by EASi (the online application procedure) and the full annual premium or deposit if using one of the pay plan options.

Each application must contain the following information to underwrite and issue the policy:

Last name, first name, middle name or initial of the named insured
DBA name, if applicable
Address (street number, street name, apartment number, city, state, county, zip code), telephone number (including area code) and fax number if any.
Social Security and/or tax ID number
Mailing address if different than residence
Business of applicant, and/or nature of operation, including goods transported, if any
Headquarters of business (if different from above)
Whether the applicant is subject to a filing with a government agency, and if so, the type of filing required
Whether the applicant is required to file evidence of financial responsibility with the Department of Motor Vehicles, and if so, all information needed to make the filing
Individuals in the household who do not drive or are not licensed due to license suspension or revocation
Name, driver's license number, state licensed, and date of birth of all operators
Marital status, including the name of spouse or registered domestic partner if not listed as an additional driver
Details about all motor vehicles convictions and accidents in the preceding three years involving the applicant and anyone who operates the applicant's vehicle(s)
A vehicle schedule which would include the following:
Vehicle year, make, model, and vehicle identification number
State registered and registered owner's name
Garaging address (city, state, zip)
Vehicle seating capacity (public autos only)
Vehicle gross weight (trucks only)
Vehicle combined gross weight (trucks only)
Vehicle size (trucks only)
Vehicle use (trucks only)
Vehicle radius of operation
Vehicle rating territory (based on zip code)
All coverages required, including any hired auto and/or employers non-ownership, (if liability limits exceed minimum limits, indicate requirements)
Total policy premium amount, plus gross deposit amount submitted
Selection of payment plan option
Name of last automobile insurer, policy number, termination date and reason for termination, if available

Supporting Documentation

Each new application submitted to the Plan shall be accompanied by a legible photocopy made by the producer of both of the following:

Current, valid driver's license, temporary license or operating permit of the applicant and all principle operators, including out of state and international licenses. If physical copy of license unavailable due to suspension or revocation, indicate so on the application.
Current vehicle registration or, if not available, a document showing proof of vehicle ownership.

Signature Requirements

The applicant under penalty of perjury shall sign the application under the laws of the state of California certifying that the information provided by the applicant on the application is correct.

Disclosures on Application

The application contains verbatim the following statements, in bold type:

"Any person who knowingly makes an application for motor vehicle insurance coverage containing any statement that the applicant resides or is domiciled in this state when, in fact, that applicant resides or is domiciled in a state other than this state is subject to criminal and civil penalties."

"Any person who knowingly presents a false or fraudulent claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison."

"I understand that if I owe money for prior CAARP policy which I have not formally appealed to the California Insurance Commissioner, the money I submit with this application for a new CAARP policy will be applied to that prior policy, and I am not entitled to a refund of the money I submit with this application, even if coverage for this new policy is terminated, until I pay the full amount owed for all current and prior CAARP policies."

The application also includes an agreement by the applicant to remit a check, money order, or bank draft of the applicant, producer of record, or financing institution as directed by the servicing carrier, within 30 days of notification or, if the insured has so elected, to make payments as specified in the pay plan options.

When the insurance is to be written on a basis requiring final adjustment of the premium after expiration of the policy, the application includes a statement by the applicant that the applicant will maintain a complete record of his or her financial transactions in any reasonable form and manner as the servicing carrier may require and that this record will be available for inspection by the servicing carrier at a designated place and at all reasonable times including for a period of 18 months after expiration of the policy for policies issued by a servicing carrier.

If any check is dishonored, the servicing carrier can impose a dishonored check fee of $10. The servicing carrier or plan manager may require that all further payments from the maker be in the form of a certified check, bank check or money order for a period of 12 months.

EASi - the computer application processing system can be used for commercial risk also. The agent simply enters their User name and password and selects Commercial Auto from the drop down menu. The system will then allow the agent to type the data on to the application form. At the completion of the entry the agent will submit the application and the system will edit the fields to ensure that they are all complete prior to binding the application. The agent then prints the bound application and mails it to the plan office with all of the attachments within 2 working days. NOTE: The commercial EASi will not rate the risk and you cannot use EASi if there are more than 5 vehicles on the risk.

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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation.
The authors, LunchTimeCE, Inc. and AIPSO, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.