The Lessor -Additional Insured and Loss Payee endorsement CA 20 01 is used to treat an auto leased by the named insured as what?

• A. An owned auto
• B. A non-owned auto
• C. A borrowed auto
• D. A fleet vehicle

Answer: (A)

The key idea is that endorsements can redefine how a vehicle is treated under a policy to protect someone else’s financial interest. The Lessor - Additional Insured and Loss Payee endorsement CA 20 01 specifically makes a vehicle that the named insured leases be treated as if it were owned by the insured for the purposes of the policy. That means the auto policy will respond to the leased vehicle’s liability and, if there’s physical damage, the loss-payee (the lessor) is paid under the terms of the policy. By naming the lessor as an additional insured and loss payee, the lessor’s financial interest in the leased vehicle is protected, and there’s less risk of gaps in coverage if the vehicle is damaged or involved in an incident.