Broad Form Insurance

[ShannonO]

Don't write this coverage so am just wanting to make sure I've got all the relevant points thought out to discuss with a potential client.

Broad form as I understand it is best suited for maybe a farmer who has 10 vehicles and doesn't want to list them all because he maybe drives some of them once a year. Or for a single person who is driving a beater car and never would let anyone borrow it. Or maybe for someone with terrible credit & driving history.

As I understand it Broad Form is extremely limited liability coverage - covers the named person only on any vehicle they drive (or own). But no physical damage coverage and no coverage if they let someone else drive their vehicle.

Anything else I'm missing?

Have a married client - husband is on Broad Form and wife is still insured under parent's policy (because they've not updated the company on that). I see gaps & holes & potentially declined claims all over the place.

 

[BlockO]

a broad form policy is similar to a named operator policy, except that most (not all) broad form policies cover owned vehicles.

A few states will allow a vehicle owner to purchase a broad form policy in lieu of regular auto insurance. I'm not sure how many states allow this but it's not very many. but even if it is allowed in your state, it is NOT something you want to sell to a vehicle owner! As you mentioned, too many holes in coverage.

Broad form policies are more suited for non-owners who need an SR22 or FR44 filing.

 

[Aram Fingal]

There are broad form policies in WA, but not many companies offer them. And you are right about the serious limitations on coverage. They're really only good for the single guy who has a lawn full of cars and just can't part with any of them and wants liability coverage only. And you're right that no one else can drive it. So if you have a couple, they would both have to have a broad form policy (or both be on the policy, I don't remember exactly how that works with broad form)

There is also a named operator policy which a lot of people mistake for broad form but that doesn't actually cover you to drive a vehicle you have regular access to (which would obviously include anything you own). These are for people who have a DUI or something and need insurance to get their license back but don't actually own or have access to a vehicle.

Both of these are not ideal situations and could end up placing you in a bad E&O exposure situation. For the broad form the could let someone else drive their car and then swear up and down that you didn't tell them no one else could drive, or that they didn't understand what you were telling them, or making them sign... or whatever. While on the named operator side you can end up with someone that is driving their friend/family members car on a regular basis and will swear that you didn't tell them they couldn't have regular access to a vehicle.

I usually try and stay away from this kind of business. I think I currently only have one of each on my books and it's people that were clients for a long time prior to the need for this kind of coverage. I don't think I would write something like this that just walked in my front door.

 

[Guest]

I have never heard of this, and sounds like I dont want to

 

[NCAgent]

At first I thought it was a named-non-owner policy, but apparently not.

It sounds like a state-specific item, I haven't heard of it either. Maybe non-standard carriers offer it?

 

[djs]

There are valid uses for broad form policies, though usually rare. Realize that the broad form policy covers the operator, not the car, which is backwards of the way agents normally think. Its not even the same as a named driver policy, but along the same lines (distant lines).

Why would you want one?
If you routinely drive a vehicle that you don't own, its a great idea. For instance, if you borrow your neighbors 1973 Chevy Pickup every weekend to haul your dirtbike down to the track, his policy would not cover you (routine driver) but a broadform policy would (for liability).

If you drive a company car, they normally cover insurance, but what if you personally get sued? The insurance policy may not cover it and your personal policy won't cover you since you routinely drive that car. Broad form (might) cover this, assuming it was personal use. Not sure if you can extend it to business use....

We all see those company vehicles that dad drives when he brings Junior to the Little League ballgame on Saturday. Some commercial policies may not extend liability coverage when Junior is in the car. Dad usually has no way of knowing. Adding dirt cheap broadform coverage to his personal policy is a great way to eliminate this risk.

Borrow a car? What if they have a named driver policy? Pretty rare, I grant you, but they exist. Broad Form will cover you.

Borrow a neighbors car, have an accident where you are liable? The neighbor only carries minimum coverage. Broad form is secondary to this and will step up to cover the additional need to its limit. Of course, your personal auto policy may do the same thing.

There is a use for it, but probably a limited market. I've only ever seen broad form offered as an add-on to a standard auto policy, never as a stand alone product, though I'll grant you, I've never looked for one.

Dan