ACORD 23 Simplifies Insurance Documentation for the Equipment Leasing Sector.

Location: Sunderland, MA
Date: 2010-08-01

The insurance industry standards organization, ACORD, has introduced a simplified proof of insurance form for use in documenting coverage on leased or financed commercial equipment or vehicles. The launch of ACORD 23, as it is called, was effective July 30, 2010.

For the past several years, the equipment leasing and finance industry has used multiple forms, primarily ACORD 24 and 25, to obtain insurance information necessary to document coverage on leases and finance transactions. Before the launch of ACORD 23, not one of the forms in use was designed to provide ALL necessary insurance information: lessors/lenders often had to track down several insurance documents before they could confirm the existence or lack of sufficient coverage.

The New ACORD 23 allows lenders/lessors of both standard equipment and vehicles to use a single form that provides ALL necessary insurance information on ONE document, making the process of providing proof of sufficient coverage much more efficient. Some of the details of the enhancement are as follows:

  • BOTH PROPERTY AND LIABILITY INFORMATION ON ONE FORM - The New ACORD 23, unlike the previous 24 (property only) or 25 (liability only), provided proof of both property and liability coverage, showing the leasing company as lender's loss payee (with respect to property) and additional insured (with respect to liability). This enables both lenders and lessors (and their servicers) to obtain proof of ALL required insurance on one form.
  • USED FOR BOTH EQUIPMENT AND VEHICLES - The ACORD 23 form allows borrowers/lessees and agents to provide proof of insurance for both equipment and titled vehicles. The form provides a clear and defined space for description of both equipment and vehicles, and distinguishes between the property and liability insurance information/requirements for both asset types.
  • DISTINCTION BETWEEN LOANS AND LEASES - For financed equipment, the ACORD 23 form shows the lender/lessor only as lender's loss payee, as there is no interest in liability exposure on finance contracts.
  • ACTUAL PROOF VS. SIMPLY A "REQUEST" - The New ACORD 23 provides a space for the producer to select one of two options:
    1. additional interest (equipment leasing company) has been added to the policy.
    2. a request has been made to add the additional interest to the policy

    If option 2 is selected, then the interest of the lender/lessor is not protected and an additional request will be made before coverage is deemed sufficient. This is a significant enhancement to the previous ACORD forms (24 and 25), which made no distinction between "requested" and "confirmed" insurance information.


Summary: With the new ACORD 23, equipment leasing/finance companies will have a single, simple form to provide ALL necessary insurance information (both property and liability) to fulfill contractual requirements and protect their financial interest. Equipment leasing and financing companies are better served in all future requests for proof of insurance on leased or financed equipment to request documentation using the ACORD 23.

Background note: ACORD has been engaged since early 2007 in reviewing and revising Certificates and Evidence of Insurance, commonly known in the insurance industry as ACORD 23, 24, 25, 27 and 28 forms. Steve Dinkelaker, President,, American Lease Insurance Agency Corporation (ALI), participated in nearly all of the regular biweekly and special meetings of insurers, agents (producers) and lenders (mostly mortgage bankers) over the last three years, and served as sponsor for the revised ACORD 23 approved by voting ACORD members in November, 2009. For any additional information or questions about ACORD Certificates or the revised ACORD 23, Steve can be reached by e-mail at steve@aliac.net or phone at 888-521-6568, extension 245.

Prepared by Steve Dinkelaker, President, ALI

August 1, 2010