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    Principal Place of Business

    Posted by MAIA on Jul 16, 2019 12:01:00 AM

    QUESTION

    This question was answered based upon current rules, regulations & statutes in effect on April 01, 2019

    Regarding Principal Place of Business Certificate Form-I have a guy with a Ceded CL Auto Policy and his vehicle is registered to himself-he lives in Newburyport and his vehicle is garaged there. However, he uses his vehicle for his fence company that is a corporation and located in the town over in Salisbury. Since the vehicle is registered to himself, do I complete the form showing his personal address or the address of the business he uses it for?

    ANSWER

    Kathy Cormier:  The Principal Place of Business is to determine that the business “Nerve Center” at that location in Salisbury. 

    If the client take the car home as night and you have indicated I think your referring to the garaging rule for rating??

    The CAR Rule states:

    RULE 21. RESIDENCE AND LOCATION

    The proper rate schedules and rules are those effective in the city or town where the automobile is principally garaged except as otherwise provided in this Manual. Automobiles used by salesmen or solicitors, or those with similar duties, requiring the operation of the automobile in more than one rating territory in Massachusetts, shall be assigned to the territory determined by the place of principal garaging, or, if there is no specific city or town of principal garaging, then, by the residential address of the operator or, if the residential address of the operator cannot be determined then, by the Massachusetts business address of the operator. No adjustment of the premium shall be made by reason of a change in the place of principal garaging during the policy period unless such change is permanent.

    Massachusetts registration is required of non-residents in accordance with reciprocal agreements with the various states as determined by the Registrar of Motor Vehicles.

    Any automobile owned by a non-resident of Massachusetts for which Massachusetts registration is required, regularly garaged inside the Commonwealth, shall be charged the rate for the territory in which the automobile is principally garaged by such non-resident during the period of Massachusetts registration.

    I’m sending your question to Irene Morrill, VP Technical Affairs.  I’m not sure if according to the rule above you would use the Business location or the residential location...Irene?

    Agent:  Thanks Kathy! Irene, let us know what you think, I emailed my underwriter to get her thoughts on the matter but she hasn’t responded yet.

    Irene Morrill:  If the vehicle is registered to him personally and he uses it for a corporation purpose that he might be president of …the corporation is the business not him.  He’s an employee (well paid and with a great title I’m sure) but still an employee of a corporation using a personally owned vehicle on behalf of his employer.  I’m not really sure if the “principal place of business” discussion addresses this situation.

    Many of these rules were created because some people who couldn’t get a MAIP because of lack of license created fictitious LLCs, Corps so they could get the vehicle registered to a “thing”.

    Rating the vehicle is dependent on garaging and I believe in this case it should be the owner’s home address. If the vehicle was left at the business address and he drove some other vehicle to/from  the business address to use that vehicle only in business to/from business address - then the garaging would be that business address.

     If the underwriter says otherwise, I’d love to know. 

    Agent:  Ok that’s good info. Your first sentence leads me to believe that his business is completely irrelevant to this specific form (because its not HIM). LOL

    I will let you know what the underwriter says! Thanks!

    This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Massachusetts Association of Insurance Agents, Number One Insurance Agency nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

    Topics: Commercial, 2019

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