What it does
Leasing and rental companies usually require the lessee or rentee to insure the leased auto. CA 20 09 makes the lessor's own policy respond, on a contingent basis, for a covered auto that is a "leased auto" when:
- the lessee or rentee furnished the insured with a certificate of insurance, a copy of the policy, or a copy of the endorsement making the insured an additional insured on the lessee's policy, as the lease requires; and
- at the time of an accident, the insurance the lease requires is not collectible.
For the named insured, its employees and agents, the limit is the lesser of the limits the lease required or the amount in the schedule. The coverage applies to Covered Autos Liability and any required no-fault coverage.
Who needs it
Truck and car leasing companies, equipment-with-vehicle lessors and long-term rental operations that rely on lessees' insurance but remain exposed as owners when that insurance fails (cancelled, insolvent carrier, coverage denied).
Quoting notes
Underwriters want proof that the lessor actually collects certificates or policies from lessees. Companion forms: CA 20 11 excludes lessee-insured autos from the primary policy, CA 20 13 schedules different limits by lease type, and CA 20 14 provides a second level of limits.
