Tuesday, January 20, 2009

ACORD Forms: How to Complete a Business Auto Section 127

Business Auto Section 127

The Business Auto Section of the ACORD Commercial Insurance Application series contains basic policy information as well as essential underwriting information for commercial auto accounts. Through the effective use of the Business Auto Section, specific needs of an individual account can be addressed. Space is provided to enter driver information for up to ten drivers. For additional drivers, ACORD 163, Driver Information Schedule, can be attached. Space is also provided to enter descriptions of up to eight vehicles. If the fleet should exceed this number, the ACORD Vehicle Schedule (ACORD 129), which contains space for 7 additional vehicles, can be attached.

Insurance coverages,"no fault" and uninsured/underinsured motorists coverages in particular, vary widely from state to state. In addition, there are numerous state-specific requirements that apply to Business Auto applications. ACORD 127 cannot address these various unique specifications. Therefore, state-specific forms, ACORD 137, have been developed to respond to these requirements. Use the ACORD 137 for your state to provide coverages/ limits information, as well as the required disclosure and other data unique to the state. See the State Forms section of this Guide for more information.

This form was also designed to be used in conjunction with the Commercial Insurance Application - Applicant Information Section (ACORD 125). Please turn to the chapter on the ACORD 125 for
information on that form.

Many states require supplements to all auto applications, to provide specific coverage explanation or to allow applicants to accept or reject certain coverages. In some cases, the applicant must be allowed to select among various options. In others, laws or regulations require disclosure of information pertinent to auto insurance. ACORD has provided the necessary supplements in all states. Refer to the State Forms section of this Guide.


Much of the information for the Identification Section should match the data found within the Applicant Information Section of ACORD 125. Nevertheless, it is still important to complete it. Many companies separate the applications by line of business for rating purposes. Not completing
this portion of the application makes it difficult to keep track of the full account.

Month/day/year on which the form is completed.

Agency's name, address and telephone number.

Phone (A/C, No, Ext)/FAX No
Producer's telephone and fax numbers.

Identification code assigned to the agency or brokerage firm by the insurance company receiving this form.

If the agency uses a subcode identification system with the company, enter the appropriate code.

Agency Customer ID
Customer's identification number assigned by the agency.

Applicant (First Named Insured)
First Named Insured as it appears on the ACORD 125.

Effective Date
Month/day/year on which the terms and conditions of the policy will commence.

Expiration Date
Month/day/year on which the terms and conditions of the policy will terminate unless renewed.

Billing Plan
Indicate whether the agency or the company (direct) will bill the insured or other payor for the policy.

Payment Plan
Plan used to pay the company for the policy. Use the company's specific designation for the plan where possible (e.g., Prepaid, Annual, Semi-annual, Bi-monthly, 40-30-30).

The audit term for policies that are subject to periodic audit. If the audit period is known, enter the code:

A . . . . . . . . . . . . . . . . . . . . . . . . . . . . annual
S . . . . . . . . . . . . . . . . . . . . . . . . . . . . semi-annual
Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . quarterly
M. . . . . . . . . . . . . . . . . . . . . . . . . . . . . monthly
O . . . . . . . . . . . . . . . . . . . . . . . . . . . . .other


Covered Auto Symbols
The Business Auto Policy uses numeric symbols on the policy declarations to indicate the type(s) of vehicles for which coverage is in effect. Be sure to place an "X" in the appropriate box for each type of coverage. Only those symbols specified for a coverage may be used.
Symbols 1 through 6 provide fleet automatic coverage. Symbol 1 includes Hired and Non-Owned auto coverage. If symbol 1 is not used and Hired auto (symbol 8) or Non-Owned auto (symbol 9) coverage is desired, those symbols must be checked.

The symbols indicate coverage for each applicable automobile. The symbols "trigger" coverage. Please refer to the company's policy declarations page for exact policy definitions of the symbols.

Symbol 1 - Any Auto
Symbol 1 can only be used for liability insurance. This includes coverage for owned, non-owned, and hired autos. Provides automatic coverage for autos the insured newly acquires. Not to be used for No-Fault, Medical Payments, Uninsured or Underinsured Motorists, or
Physical Damage coverages.

Symbol 2 - All Owned Autos
Applies only to autos owned by the insured, and for liability coverage on any non-owned trailers while attached to power units the insured owns. This provides automatic coverage for autos the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, or Physical Damage coverages, except Towing and Labor.

Symbol 3 - Owned Private Passenger Autos
Provides automatic coverage for private passenger autos the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, Physical Damage, or Towing.

Symbol 4 - Owned Autos Other Than Private Passenger
Provides automatic coverage for autos other than private passenger the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, and Physical Damage except Towing.

Symbol 5 - All Owned Autos Which Require No-Fault Coverage
Provides automatic coverage for autos the insured newly acquires where no-fault is required by law. Used only for P.I.P. and Additional P.I.P.

Symbol 6 - Owned Autos Subject To Compulsory U.M. Law
Provides automatic coverage for autos the insured newly acquires where rejection of U.M. is not permitted by law.

Symbol 7 - Autos Specified On Schedule
Applies only to those autos described on the schedule for which a premium charge is shown, and for liability coverage on any non-owned trailers while attached to power units the insured owns. Provides no automatic coverage for autos the insured newly acquires. The
company must be notified of newly acquired autos within 30 days. Used for all coverages.

Symbol 8 - Hired Autos
Applies only to those autos leased, hired, rented or borrowed by the insured. This does not include any auto leased, hired, rented or borrowed from any of the insured's employees or members of their households. Can be used for all coverages except no-fault, towing, and labor. For medical payments, this symbol applies only to funeral directors.

Symbol 9 - Non-Owned Autos
Applies only to those autos not owned, leased, or hired by the insured which are used in connection with the insured's business. Used only for liability coverage. Coverages / Limits - Use ACORD 137 for your state.


This section is used to collect information on all the drivers that will be covered under this account. The driver list should include any family member that will be driving company vehicles and employees who regularly drive their own vehicles for company business.

Driver #
Indicate the driver number assigned by the agency/agency-vendor system used for tracking purposes.

Enter driver's full name. If the company requires the address, enter it as well.

Enter F for female, M for male.

Marital Stat

Enter the marital status for each driver. Examples:

S . . . . . . . . . . . . . . . . . . . . . . . . . . . . Single
M. . . . . . . . . . . . . . . . . . . . . . . . . . . . Married
D . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Divorced
SP . . . . . . . . . . . . . . . . . . . . . . . . . . Separated
W. . . . . . . . . . . . . . . . . . . . . . . . . . . . Widowed

Date of Birth
Enter the driver's birth date.

Yrs Exp
Enter the number of years of driving experience for each driver.

Year Licensed
Enter the year in which the driver was first licensed.

Driver's License Number/Soc. Sec. #
Enter the complete driver's license number. If a license number is unavailable, enter the driver's social security number.

State Lic.
Enter the state in which the license was issued.

Date Hire
Enter the date of hire for each driver.

Broadened No Fault
Certain states "no fault" liability laws permit broadened no fault coverage to be written for specific drivers. If such specific coverage is to apply, indicate "yes" here for each driver that is to be covered.

Enter Y in this column for any driver specifically covered by Drive Other Car coverage.

Use Vehicle #
Enter the vehicle number that this driver primarily uses.

% Use
Indicate the percentage of driving done by this driver in the primary vehicle that this driver uses.


Use the Remarks section to provide additional information for any questions answered with a "Yes" response. The overview below lists the expected information that should be added to the remarks section for "Yes" responses.

1. With the exception of encumbrances, are any vehicles not solely owned by and registered to the applicant?
Indicate if any of the vehicles described in the application are not owned by or registered to the applicant.

2. Do over 50% of the employees use their autos in the business?
Indicate if more than 50% of applicant's employees use their vehicles in the applicant's business.

3. Is there a vehicle maintenance program in operation?
Explain the type of program and if there are maintenance records kept on file.

4. Are any vehicles leased to others?
Indicate if autos are leased on a short term or long term basis. Are certificates of insurance required from lessees? List who the vehicles are leased to.

5. Are any vehicles customized, altered or have special equipment?
Provide the details on such alterations/customizations. List customized item and estimated value of customization.

6. Are ICC, PUC or other filings required?
If Interstate Commerce Commission or Public Utilities Commission filings are required, describe the insured operations and trip frequency.

7. Do operations involve transporting hazardous material?
List the materials hauled, safety measures taken and if the applicant is subject to the Federal Motor Carrier Act Requirements.

8. Any Hold Harmless Agreements?
If any hold harmless agreements are in force, describe any in which the applicant indemnifies others. Attach a copy of the agreement.

9. Any vehicles used by family members?
Provide details regarding which vehicles are used and how often. Make sure the driver is included in the Driver Information section.

10. Does the applicant obtain MVR verifications?
Indicate if applicant reviews MVRs on all assigned drivers. How often? Upon hiring only? If No, provide explanation of why MVRs are not reviewed.

11. Does the applicant have a specific driver recruiting method?
Describe the recruiting method. Are written and/or road tests conducted?

12. Are any drivers not covered by Workers Compensation?
Provide the names of all drivers not covered.

13. Any vehicles owned but not scheduled on this application?
List vehicles not to be covered and explain why. Indicate where coverage is placed for these vehicles.

14. Any drivers with convictions for moving traffic violations?
Give driver name and number, date, type and place for each conviction. Enter the number of years reviewed, in accordance with the company's and state's requirements.

15. Has agent inspected vehicles?
Describe any damage to vehicles, including any missing safety devices.

Maximum Dollar Value Subject to Loss
List the highest value that the insurer would be subject to if a major automobile loss occurred on the insured premises.

Description of Garage/Storage Locations
Provide a brief description of all garage or storage locations for the vehicles (e.g., Fenced in secured lot or Closed secured garage).


Use this section for information on any additional interests, employees who should be listed as additional insureds, and others who require Certificates of Insurance on the automobile portion of this policy. For additional names attach an ACORD 45.

Indicate all appropriate options for the individual named.

Primarily used for Mortgagees. Indicate the ranking such as 1st, 2nd or 3rd mortgagee.

Name and Address
List the additional interest's name and address.

Reference #
Indicate the additional interest's reference number for this applicant such as the loan or mortgage number.

Certificate Required
If a Certificate of Insurance is required, check this box.

Interest in Item Number
List the item number corresponding with the application for the item of interest for this additional insured.

Item Description
If needed, further clarify the item of interest in this field. For a vehicle, list the make, model and VIN number. For a scheduled item, list the description, such as three carat diamond in six point setting.

Indicate by "yes" or "no" whether a Certificate of Insurance needs to be issued to the additional interest.


This section is used to collect pertinent information on the vehicles that are to be insured, what they are, how they are used and what coverage applies to them. If there are more than eight vehicles associated with this risk, place additional vehicles on the ACORD 129 Vehicle Schedule.

Veh #
Number assigned by the agent to this vehicle for purposes of tracking in the application process.

Vehicle's model year.

Vehicle's manufacturer (e.g., Buick).

Manufacturer's model name (e.g., Regal).

Body Type
Vehicle's body type (e.g., 4 door sedan).

Full vehicle identification number assigned by the manufacturer.

City, State, Zip where garaged
List the location where this vehicle is normally garaged.

Lic State
Enter the state where the vehicle is licensed.

Enter the rating territory in which the vehicle is principally garaged.

These terms identify the size class of commercial vehicles. The weights must be indicated to classify the vehicle correctly.

Gross Vehicle Weight. The maximum loaded weight for which a single vehicle is designed by the manufacturer.

Gross Combined Weight. The maximum loaded weight for a combination truck-tractor and semi-trailer or trailer for which the truck-tractor is designed as specified by the manufacturer.

This is the primary industry classification code found in rating manuals for commercial vehicles as determined by:
If this is a fleet or non-fleet policy
Commercial autos by size, business use, radius of operation and whether truck or trailer type
Public autos by type of vehicle, radius or seating capacity

This is the secondary Special Industry Class code which applies to commercial vehicles as determined by industry rating manuals.

This is the sum of the rating factors from the primary and secondary classification tables. This field may be left blank if you are not rating this application.

Seating Capacity
Used for public vehicles and livery vehicles. Enter the number of passenger seats available.

Enter the age of the vehicle in years, as follows:
1-Current model year
2-First preceding model year
3-Second preceding model year
4-Third preceding model year
5-Fourth preceding model year
6-All other autos

Cost New
If actual cash value coverage is desired, indicate the original retail cost the original purchaser paid for the vehicle and equipment.

Enter the appropriate radius code as follows:

L - Local
Up to 50 miles. Not frequently operated beyond a 50-mile radius from the point of principal garaging.

I -Intermediate
Operation beyond 50 miles, but not regularly operated beyond a 200-mile radius from the point of principal garaging.

LD - Long Distance
Regularly and frequently operated beyond a radius of 200 miles.

Farthest Term
For zone-rated vehicles, enter the town name and state of the terminal farthest away from the normal garaging location of this vehicle, that this vehicle travels to.

Drive to Work/School
If this vehicle is used for commuting purposes to work or school, check the box that applies. Options are:
Drive to Work or School under 15 miles one way
Drive to Work or School 15 miles or over one way

Check the appropriate box for the primary use of this vehicle. Options are:
Pleasure - Private passenger vehicles or pickups/vans not used for business purposes
Farm - Private passenger vehicles or pickups/vans principally garaged and used on a farm or ranch
Retail - Pick up or delivery of property to individual households
Service - Transportation of personnel, tools, equipment or supplies to or from a job site
Commercial - The transportation of property in vehicles other than those defined as retail or service

Check Coverages
Use this section to indicate the coverages applicable to this individual vehicle. These coverages should correspond to the symbols indicated in the coverage section of ACORD 137.
Abbreviations are:

Liab . . . . . . . . . . . . . . . . . . . . .Liability
No-Fault . . . . . . . . . . . . . . . . "No-Fault" coverage, if applicable
Add'l No-Fault . . . . . . . . . . . Additional "No-Fault" Protection, if applicable
Med Pay . . . . . . . . . . . . . . . . Medical Payments
Unins. Mot . . . . . . . . . . . . . . . Uninsured Motorist
Underins Mot . . . . . . . . . . . . Underinsured Motorist
Towing & Labor . . . . . . . . . .Towing and Labor
Spec C of L . . . . . . . . . . . . . . Specified Cause of Loss
F. . . . . . . . . . . . . . . . . . . . . . . . .Specified Cause of Loss by Fire
F & T. . . . . . . . . . . . . . . . . . . . .Specified Causes of Loss by Fire and Theft
F, T, & W . . . . . . . . . . . . . . . . .Specified Causes of Loss by Fire, Theft and Windstorm
LSP . . . . . . . . . . . . . . . . . . . . . . Limited Specified Perils
Comp. . . . . . . . . . . . . . . . . . . . .Comprehensive Coverage
Coll. . . . . . . . . . . . . . . . . . . . . . .Collision Coverage
Rent. Reimb. . . . . . . . . . . . . . Rental Reimbursement Coverage
FG. . . . . . . . . . . . . . . . . . . . . . . .Full Glass Coverage
Blank space . . . . . . . . . . . . . .Specify Other Coverage

Indicate if the deductible is based on an ACV - Actual Cash Value, AA - Agreed Amount, or ST Amt - Stated Amount basis by checking the appropriate box. For Agreed Amount or Stated Amount basis enter the applicable limit.

Indicate if the other than collision deductible is for comprehensive or some sort of specified cause of loss. Enter the collision deductible in the space provided.

Net Veh Dr/Cr
Enter the net rating factor that applies to this vehicle. Do not include debits or credits that apply on a policy level. Provide under Remarks a description of each debit or credit used in the calculation of the net rating factor.

Tot Prem
Enter the total premium for the vehicle.


Use this section to provide any additional information required for underwriting or rating. Also indicate if any attachments such as hold harmless agreements, or pictures of vehicles are being sent.

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