Title: Allied Premier Insurance v. United Financial Casualty Co.

State: california

Issuer: California Supreme Court

Document:

IN THE SUPREME COURT OF 
CALIFORNIA 
 
ALLIED PREMIER INSURANCE, 
Plaintiff and Respondent, 
v. 
UNITED FINANCIAL CASUALTY COMPANY, 
Defendant and Appellant. 
 
S267746 
 
Ninth Circuit 
20-55099 
 
Central District of California 
No. 5:18-cv-00088-JGB-KK 
 
 
July 24, 2023 
 
Justice Corrigan authored the opinion of the Court, in which 
Chief Justice Guerrero and Justices Liu, Kruger, Groban, 
Jenkins, and Evans concurred.  
 
1 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL 
CASUALTY COMPANY 
S267746 
 
Opinion of the Court by Corrigan, J. 
 
The United States Court of Appeals for the Ninth Circuit 
has certified1 the following question for our review:  Under 
California’s Motor Carriers of Property Permit Act (Veh. Code, 
§ 34600 et seq.; the Act),2 does a commercial automobile 
insurance policy continue in full force and effect until the 
insurer cancels the corresponding Certificate of Insurance on 
file with the Department of Motor Vehicles (DMV or 
Department), regardless of the insurance policy’s stated 
expiration date?  The answer is no.  The terms of an insurance 
contract generally determine the duration of the policy’s 
coverage.  Although an endorsement can amend the policy, 
neither the Act nor the specific endorsement it requires extend 
coverage beyond the underlying policy’s expiration date.   
In Transamerica Ins. Co. v. Tab Transportation, Inc. 
(1995) 12 Cal.4th 389 (Transamerica), this court interpreted an 
earlier permitting system codified in the Public Utilities Code.  
We held that the policy endorsement required by that scheme 
did extend insurance coverage until notice of cancellation was 
provided to the Public Utilities Commission.  However, the 
language in the Public Utilities Code, on which we relied in 
 
1  
California Rules of Court, rule 8.548.   
2  
All undesignated statutory references are to the Vehicle 
Code. 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
2 
Transamerica, was not carried over when later legislation 
replaced the Public Utilities Code permitting scheme and 
amended the Vehicle Code to add the Act at issue here.  As a 
result, Transamerica’s holding does not control the answer to 
the certified question.   
I. 
BACKGROUND 
The facts are taken from the parties’ joint stipulation of 
facts and exhibits as well as the judgment of the United States 
District Court, Central District of California.   
A. The Act 
Commercial trucker Jose Porras is a “ ‘motor carrier of 
property’ ” (motor carrier or carrier).  (§ 34601, subd. (a).)  Under 
the Act, a motor carrier cannot operate on public highways 
without securing a DMV permit, which requires proof of the 
carrier’s financial responsibility.  (§§ 34620, subd. (a), 34630, 
subd. (a).)  A carrier can satisfy that requirement by obtaining 
a policy of insurance.3  (§ 34631.)  If a carrier does so, the insurer 
must submit a certificate of insurance to the Department as 
evidence that the “protection required under [section 34631.5,] 
subdivision (a)” is provided.  (§ 34631.5, subd. (b)(1).)   
 
3  
Section 34631.5, subdivision (a), establishes the required 
minimum amount of liability protection for bodily injury, death, 
and property damage.  (§ 34631.5, subd. (a)(1)–(4).)  The proof of 
financial responsibility required under section 34630 must “be 
evidenced by the deposit with the [DMV], covering each vehicle 
used or to be used under the motor carrier permit . . . , of one of 
the following”:  (1) a certificate of insurance issued by an 
insurance company; (2) a surety bond issued by a company 
licensed to write surety bonds in the state; (3) evidence of 
qualification as a self-insurer; or (4) evidence that coverage is 
provided by a charitable risk pool.  (§ 34631, subds. (a)–(d).) 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
3 
The Department has published forms to facilitate the 
administration of the Act’s financial responsibility requirement.  
Two of those forms are a “Certificate of Insurance” and an 
“Insurance Policy Endorsement.”  (See Cal. Code Regs., tit. 13, 
§ 220.06, subds. (a), (b).)  When a motor carrier complies with 
the Act by obtaining an insurance policy, a DMV regulation 
requires that the “Insurance Policy Endorsement . . . , amending 
the insurance policy to comply with insurance requirements 
imposed by the [Act], . . . be attached to and made part of, the 
insurance policy insuring the motor carrier.”  (Cal. Code Regs., 
tit. 13, § 220.06, subd. (b).)   
The Act requires that “proof of financial responsibility 
. . . be continued in effect during the active life” of the permit 
issued to the motor carrier.  (§ 34630, subd. (b).)  This 
requirement prohibits cancellation of a certificate of insurance 
without notice to the DMV by the insurer.4  (Ibid.)  When an 
insurer gives notice that a certificate will be cancelled because 
the policy will lapse or be terminated, the DMV must “suspend 
the carrier’s permit effective on the date of lapse or termination 
 
4  
To effectuate this requirement and prohibition, the Act 
requires that “[e]very insurance certificate or equivalent 
protection to the public . . . contain a provision that the 
certificate or equivalent protection shall remain in full force and 
effect until canceled in the manner provided by [section 34631.5, 
subdivision (b)(3)].”  (§ 34631.5, subd. (b)(4).)  Section 34631.5, 
subdivision (b)(3) provides that a certificate of insurance “shall 
not be cancelable on less than 30 days’ written notice to the 
[DMV].”  California Code of Regulations, title 13, section 220.06, 
subdivision (c) provides that “[w]ritten notice of cancellation of 
[a] Certificate of Insurance, required under [section 34630, 
subdivision (b)], shall be submitted by the insurer to the 
department on a Notice of Cancellation of Insurance.”  This form 
is referred to herein as a cancellation notice.   
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
4 
unless the carrier provides evidence of valid insurance coverage” 
pursuant to section 34630, subdivision (a).  (§ 34630, subd. (c).)  
This procedure ensures that only financially responsible 
carriers are permitted to operate on public highways. 
B. The Facts 
Effective May 2, 2013, United Financial Casualty 
Company (United) began insuring Porras under a commercial 
automobile insurance policy with an eight-digit policy number 
ending in 772 (the United policy or Policy 772).  The policy 
provided that, in return for Porras’s premium payment, United 
would, up to the policy limit, pay specified damages Porras 
became responsible for as a result of an accident “arising out of 
the ownership, maintenance or use of” an insured vehicle.  The 
policy also provided that United would, at its option, settle or 
defend any covered claim and that, if Porras failed to pay the 
premium to renew, the policy would “automatically terminate at 
the end of the current policy period.”   
As required by the Act, United filed a certificate of 
insurance, identifying United as the insurer and Porras as the 
insured and giving the policy number ending in 772.  United 
certified that a “fully executed endorsement, on a form 
authorized by the [DMV], is attached to the referenced policy to 
conform to the requirements of the [Act]” and that “[t]his 
Certificate . . . shall not be canceled on less than thirty (30) days 
notice from the Insurer to the DMV and written on a Notice of 
Cancellation form authorized by the DMV.”   
United 
attached 
the 
required 
Insurance 
Policy 
Endorsement to the United policy (the Endorsement).  Under 
the Endorsement, United agreed:  (1) to “pay, consistent with 
the minimum insurance coverage required by [section] 34631.5 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
5 
. . . any legal liability of insured for bodily injury, death, or 
property damage arising out of the operation, maintenance, or 
use of any vehicle(s) for which a motor carrier permit is 
required”; (2) that “[n]o provision, stipulation, or limitation 
contained in the attached policy or any endorsement shall 
relieve insurer from obligations arising out of this Endorsement 
or the Act, regardless of the insured’s financial solvency, 
indebtedness[,] or bankruptcy”; (3) that the “Certificate of 
Insurance shall not be canceled on less than thirty (30) days 
notice from the Insurer to the DMV”; and (4) that, “[e]xcept as 
specified in this endorsement, the terms, conditions, and 
limitations of this policy remain in full force and effect.” 5  One 
of the terms in the policy was the termination date.  The 
Endorsement also permitted United to seek “reimbursement 
from [Porras] for any payment made by [United] solely on 
account of the [Endorsement’s] provisions.”   
United provided coverage for Porras through the original 
or renewed Policy 772 from May 2, 2013 through April 12, 2015.  
During that period, it appears that United filed at least three 
certificates of insurance and two cancellation notices, one of 
which the Department returned to United as an “incomplete 
filing.”  It appears that, as the end of a policy period approached, 
United would file a cancellation notice with the DMV, noting the 
policy number and giving the date the policy would lapse.  The 
timing of the notice made the DMV aware that, if Policy 772 was 
not renewed, it would lapse on the date provided, triggering the 
DMV’s duty to suspend Porras’s operating permit.  If the policy 
 
5  
Unlike the policy, the “coverage provided by the 
endorsement exclude[d] any costs of defense or other expense 
that the policy provides.”   
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
6 
was subsequently renewed, United would send a new certificate 
of insurance as evidence that Porras continued to have the 
required protection under Policy 772.  The new certificate would 
indicate the date on which the new policy period began.  As 
noted, one of United’s cancellation notices was rejected by the 
Department as an incomplete filing.  After that filing was 
returned, however, United filed a new certificate of insurance, 
covering the ensuing period.  As relevant here, United 
submitted its final cancellation notice on February 6, 2015, 
informing the Department that “the [United] policy, including 
applicable 
endorsement 
and 
certifications” 
is 
cancelled 
“effective thirty (30) days after the date” it was either received 
by the DMV, or on April 12, 2015, whichever was later.  Every 
certificate and cancellation notice in the record bears both the 
772 policy number and the number of Porras’s permit. 
By April 12, 2015, Porras had not paid the premium 
required to renew the United policy.  Effective April 13, 2015, 
Allied Premier Insurance (Allied) began to insure Porras under 
a policy that provided the required coverage.  Allied submitted 
a certificate of insurance to the Department four days later.  The 
record contains no indication that, when it assumed coverage 
and filed its own certificate, Allied was aware that United’s 
earlier certificate remained uncancelled because the DMV had 
rejected United’s cancellation notice.   
On September 1, 2015, Porras was driving a truck covered 
by the Allied policy when he collided with a car driven by 
Jennifer Jones.  Jones died as a result of the accident, and her 
parents sued Porras for wrongful death.  Porras tendered his 
defense to Allied, which retained counsel to defend him and 
settled the parents’ claim for its policy limits of $1 million.  
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
7 
United was not a party to the Jones suit, did not defend Porras 
in that action, and did not contribute to the settlement.   
C. The Action at Issue Here 
After the settlement, Allied sued United for declaratory 
relief, equitable contribution, and equitable subrogation, 
seeking reimbursement for half the amount it paid to resolve the 
Jones litigation.  It argued that, because one of United’s 
cancellation notices was rejected by the Department as 
incomplete, United continued to have an active certificate of 
insurance on file with the DMV.  That circumstance, according 
to Allied, meant United’s policy remained in effect on the date 
of the collision between Porras and Jones.   
United urged that it had no obligation to reimburse Allied 
because its policy had expired when Porras failed to renew.  
United acknowledged one of its certificates of insurance 
remained on file with the DMV because a cancellation notice had 
been returned.  However, it argued the certificate was not an 
insurance policy.  At most, it created a surety-like obligation, 
providing a “safety net” for members of the public injured by 
commercial motor carriers.  Because the certificate of insurance 
did not function to make United a co-insurer of Porras, United 
argued it was not required to contribute to the settlement.   
The case was removed to federal court.  The parties filed a 
joint stipulation of facts and exhibits and then filed cross-
motions for summary judgment.  The district court ruled for 
Allied, finding that, because United “failed properly to submit a 
Notice of Cancellation, its policy remained in effect” on the date 
of the accident, “even though [the policy] may have lapsed under 
its own terms or been cancelled by the parties.”  Based on that 
finding, the court concluded that Allied and United both 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
8 
provided “insurance coverage on the same risk,” and that Allied 
was “entitled to equitable contribution in the amount of 
$500,000.”6   
United appealed to the Ninth Circuit, which certified the 
question of law to this court.  (Allied Premier Ins. v. United 
Financial Cas. Co. (9th Cir. 2021) 991 F.3d 1070, 1071.)  In the 
Ninth Circuit’s view, the appeal turns on the following question 
of statutory interpretation:  “If the [Act] requires a commercial 
auto insurance policy to remain in effect indefinitely until the 
insurer cancels the certificate of insurance on file with the DMV, 
then Allied must prevail.  If not, United must prevail.”  (Id. at 
p. 1073.)  We hold that the Act does not require the policy to 
remain in effect indefinitely.   
II. DISCUSSION 
Equitable contribution is the “right to recover, not from 
the party primarily liable for the loss [here, Porras], but from a 
co-obligor who shares such liability with the party seeking 
contribution [here, United].”  (Fireman’s Fund Ins. Co. v. 
Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1293 
(Fireman’s Fund).)  “In the insurance context, the right to 
contribution arises when several insurers are obligated to 
indemnify or defend the same loss or claim, and one insurer has 
paid more than its share of the loss or defended the action 
 
6  
The district court also addressed and rejected United’s 
argument that a certificate of insurance that “remains on record 
after a policy lapses functions as a surety, through which the 
insurer ‘promises to pay up to $750,000 towards a judgment 
against the trucker [for harm to a third party] where coverage 
for some reason is unavailable under an actual insurance 
policy.’ ”  The Ninth Circuit has not asked us to assess the 
propriety of that ruling, and we express no view on it. 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
9 
without any participation by the others.  Where multiple 
insurance carriers insure the same insured and cover the same 
risk, each insurer has independent standing to assert a cause of 
action against its coinsurers for equitable contribution when it 
has undertaken the defense or indemnification of the common 
insured.  Equitable contribution permits reimbursement to the 
insurer that paid on the loss for the excess it paid over its 
proportionate share of the obligation, on the theory that the debt 
it paid was equally and concurrently owed by the other insurers 
and should be shared by them pro rata in proportion to their 
respective coverage of the risk.”  (Ibid.) 
The “reciprocal contribution rights of coinsurers who 
insure the same risk are based on the equitable principle that 
the burden of indemnifying or defending the insured with whom 
each has independently contracted should be borne by all the 
insurance carriers together, with the loss equitably distributed 
among those who share liability for it in direct ratio to the 
proportion each insurer’s coverage bears to the total coverage 
provided by all the insurance policies.”  (Fireman’s Fund, supra, 
65 Cal.App.4th at p. 1294.)  The right to equitable contribution 
“is predicated on the commonsense principle that where 
multiple insurers or indemnitors share equal contractual 
liability for the primary indemnification of a loss or the 
discharge of an obligation, the selection of which indemnitor is 
to bear the loss should not be left to the . . . choice of the loss 
claimant, and no indemnitor should have any incentive to avoid 
paying a just claim in the hope the claimant will obtain full 
payment from another coindemnitor.”  (Id. at p. 1295.)   
“Equitable contribution thus assumes the existence of two 
or more valid contracts of insurance covering the particular risk 
of loss and the particular casualty in question.”  (Fireman’s 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
10 
Fund, supra, 65 Cal.App.4th at p. 1295, italics added.)  This 
assumption lies at the heart of the Ninth Circuit’s question.  
Allied’s entitlement to equitable contribution depends on 
whether United was obligated to indemnify Porras for any 
damages due to the Jones accident.  Allied is entitled to 
equitable contribution only if it can show that United was a “co-
obligor who shares . . . liability” with Allied for the loss resulting 
from that event.  (Id. at p. 1293.)  Allied must show that United 
was “obligated to indemnify or defend the same loss or claim” as 
Allied.  (Ibid.)  Resolution of this question turns on an 
interpretation of the Act’s requirements.   
A. The Act Does Not Extend the Policy Beyond the Term 
Contained in the Contract 
As mentioned, the district court concluded that the United 
policy’s coverage remained in effect, not based on the policy’s 
terms, but because United had not cancelled all certificates of 
insurance on file with the DMV.  The court relied on 
Transamerica, supra, 12 Cal.4th 389 in reaching that 
conclusion.  Transamerica does not control here because it 
interpreted a different statutory scheme.   
Transamerica addressed the application of the Act’s 
predecessor, the Highway Carriers’ Act of 1951 (Pub. Util. Code, 
former § 3501 et seq.; HCA).  The Legislature repealed the HCA 
in 1996 and replaced it with the Act, transferring primary 
regulatory authority over commercial truckers to the DMV.  (See 
Hill Brothers Chemical Co. v. Superior Court (2004) 123 
Cal.App.4th 1001, 1005; see also Stats. 1996, ch. 1042, § 53, 
p. 6562.)  Like the Act that replaced it, the HCA prohibited 
commercial truckers from operating on public highways without 
a permit issued by the Public Utilities Commission (PUC).  To 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
11 
obtain a permit, a commercial trucker had to show it carried 
“ ‘adequate protection’ against liability.”  (Transamerica, supra, 
12 Cal.4th at p. 397, fn. omitted.)  This could “be achieved by 
means of an insurance policy, a surety bond, or evidence . . . of 
the carrier’s qualification as a self-insurer.”  (Ibid.)  Proof of 
insurance coverage could be submitted to the PUC “in the form 
of ‘a certificate of insurance.’ ”  (Id. at p. 398.)   
As to cancellation of a policy, the HCA provided that 
“ ‘protection against liability shall be continued in effect during 
the active life of the [trucker’s] permit,’ and that ‘[t]he policy of 
insurance or surety bond shall not be cancelable on less than 30 
days’ written notice to the [PUC], except in the event of cessation 
of operations as a highway carrier as approved by the [PUC].’ ”  
(Transamerica, supra, 12 Cal.4th at p. 398, quoting Pub. Util. 
Code, former § 3634, italics omitted.)  To promote the continuous 
protection requirement and prohibition on cancellation without 
notice, the PUC promulgated General Order No. 100, which 
required the following provisions to be included in any policy 
subject to the HCA:  (1) “ ‘A policy of insurance, or surety bond, 
evidencing such protection, shall not be cancelable on less than 
thirty (30) days’ written notice to the Public Utilities 
Commission’ ”; and (2) “ ‘Every insurance policy, surety bond or 
equivalent protection to the public shall contain a provision that 
such policy, surety bond or equivalent protection will remain in 
full force and effect until canceled in the manner provided’ ” by 
the General Order.  (Transamerica, at p. 398, italics added.)  The 
regulatory scheme also required “a standard PUC form 
endorsement” be “attached to every policy of insurance 
purchased by a highway carrier.”  (Id. at pp. 394, 398.)  The 
endorsement certified “that a liability policy issued to a highway 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
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Opinion of the Court by Corrigan, J. 
12 
carrier [would] continue ‘in full force and effect until canceled’ ” 
by written notice to the PUC.  (Id. at p. 394, italics added.) 
The dispute in Transamerica was between a commercial 
trucking company (Tab) and its liability insurer (Transamerica).  
In 1980, Tab purchased a one-year term liability insurance 
policy 
from 
Transamerica 
to 
comply 
with 
the 
HCA.  
(Transamerica, supra, 12 Cal.4th at p. 395.)  Transamerica filed 
a certificate of insurance with the PUC.  The certificate provided 
that the “policy was ‘Effective 2-1-80 Until Canceled.’ ”  (Ibid.)  
Tab did not renew the Transamerica policy and, in the ensuing 
years, obtained insurance policies from Federal Insurance 
Company (Federal) and Home Indemnity Company (Home).  
(Ibid.)  Both Federal and Home filed certificates of insurance 
representing their policies with the PUC.  (Ibid.)  However, 
“neither Transamerica nor Tab ever notified the PUC of the 
cancelation of the Transamerica policy.”  (Ibid., fn. omitted.)   
In 1989, a Tab truck collided with a train, causing multiple 
injuries and deaths.  (Transamerica, supra, 12 Cal.4th at p. 
395.)  The plaintiffs sued Tab for various claims and sought $6 
million in damages.  (Id. at p. 396.)  Tab demanded coverage 
from Transamerica, Federal, and Home under the three policies 
mentioned above.  (Ibid.)  Federal and Home “each contributed 
[their] policy limits (a total of $1.6 million) to a global settlement 
in which Tab admitted liability.”  (Ibid.)  Transamerica did not 
participate in the settlement.  (Ibid.)   
Transamerica then sued Tab, seeking a declaratory 
judgment that it was not liable for damages from the 1989 
collision 
because 
its 
policy 
had 
previously 
expired.  
(Transamerica, supra, 12 Cal.4th at p. 396.)  Tab cross-
complained, asserting entitlement to coverage under the policy 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
13 
because the certificate of insurance Transamerica filed with the 
PUC “expressly stated its policy was ‘Effective 2-1-80 Until 
Canceled.’ ”  (Ibid.)  Because Transamerica never notified the 
PUC that its policy was canceled, Tab argued the policy 
“continued in effect.”  (Ibid.)  The trial court granted Tab’s 
motion for summary adjudication of the coverage issue.  
Transamerica appealed, and the Court of Appeal reversed, 
concluding that the Transamerica policy had “expired of its own 
terms [in] 1981, and that Transamerica therefore had no 
obligation to give 30 days’ written notice to the PUC of its intent 
to cancel the policy.”  (Id. at pp. 396–397.)   
On review, this Court reversed the Court of Appeal’s 
judgment and concluded that Transamerica’s policy was still “in 
effect at the time of the 1989 accident, thus providing coverage 
for Tab.”  (Transamerica, supra, 12 Cal.4th at p. 400.)  We 
reasoned that the “policy must be read in light of its original 
provisions as well as those added to the policy by the PUC’s 
standard form endorsement.”  (Id. at p. 399.)  We then described 
the policy and endorsement as follows:  “As initially written, the 
Transamerica policy was to remain in effect for one year only, 
from February 1, 1980, until February 1, 1981.  But . . . the 
policy was amended by the standard PUC endorsement, which 
provides for inclusion in the policy of the PUC’s General Order 
No. 100 . . . . [¶]  Incorporation of General Order No. 100 . . . into 
the provisions of the Transamerica policy added to the 
provisions the requirement . . . that ‘such policy . . . will remain 
in full force and effect until canceled . . . .’  This language, of 
course, is in direct conflict with the language of the policy as 
originally written stating that the policy was to expire in 
February 1981.”  (Id. at pp. 399–400.)  We concluded that 
“incorporation into the policy of the PUC’s General Order No. 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
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Opinion of the Court by Corrigan, J. 
14 
100 language requiring the policy to remain in ‘full force and 
effect until canceled’ converted the policy from a one-year term 
policy to a policy that was to remain in effect ‘until canceled.’ ”  
(Id. at p. 400.)  It was undisputed that there was “no compliance 
with the notice requirements” in former section 3634 of the 
Public Utilities Code and General Order No. 100.  Therefore, we 
held that the policy was “still in effect” at the time of the 1989 
collision.  (Transamerica, at p. 400.)   
Under its terms, the HCA provided that “ ‘protection 
against liability shall be continued in effect during the active life 
of the permit,’ and that ‘[t]he policy of insurance or surety bond 
shall not be cancelable on less than 30 days’ written notice to 
the [PUC], except in the event of cessation of operations as a 
highway carrier as approved by the [PUC].’ ”  (Transamerica, 
supra, 12 Cal.4th at p. 398, quoting Pub. Util. Code, former 
§ 3634, original italics omitted, italics added.)  So, the terms of 
the HCA required that protection against liability, which was 
provided by the policy, remain in effect until the motor carrier’s 
permit was cancelled.  To effectuate that requirement, the HCA 
and the required endorsement prohibited the policy from being 
cancelled without notice.   
The Act is different.  It provides that “[p]roof of financial 
responsibility shall be continued in effect during the active life 
of the motor carrier permit,” and that the “certificate of 
insurance shall not be cancellable on less than 30 days’ written 
notice from the insurer to the [DMV] except in the event of 
cessation of operations as a permitted motor carrier of property.”  
(§ 34630, subd. (b), italics added.)  Likewise, section 34631.5, 
subdivision (b)(3) provides that the certificate of insurance, 
“evidencing the protection, shall not be cancelable on less than 
30 days’ written notice” to the DMV.  Thus, while the HCA 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
15 
specifically prohibited cancellation of an insurance policy 
without notice, the Act only prohibits cancellation of a certificate 
of insurance without notice.  This prohibition helps to ensure 
that “proof of financial responsibility” remains “in effect during 
the active life” of the permit.  (§ 34630, subd. (b).) 
The difference in statutory language is significant.  Under 
the HCA and the endorsement required by General Order No. 
100, the underlying policy could not be cancelled without notice 
to the PUC.  As a result, Transamerica remained obligated.  Its 
policy with Tab had been amended by the endorsement, which 
“converted the policy from a one-year term policy to a policy that 
was to remain in effect ‘until canceled.’ ”  (Transamerica, supra, 
12 Cal.4th at p. 400.)  But under the new language of the Act 
only the certificate of insurance remains active until cancelled.  
Cancellation of a certificate triggers the DMV’s obligation to 
suspend the motor carrier’s permit.  The statute does not say 
that the underlying policy remains active beyond the period 
called for in the contract between the parties.  There is no 
language that “converts” the stated term of the policy.   
Transamerica was decided against the backdrop of a 
general rule that an insurance company “incurs no liability for 
an accident that occurs after the policy period has ended.”  
(Transamerica, supra, 12 Cal.4th at p. 394.)  This Court 
concluded in Transamerica that the HCA created an exception 
to that general rule.  The coverage provided by an insurance 
policy subject to the HCA could not be canceled, regardless of its 
stated expiration date, without written notice of the policy’s 
cancellation to the PUC.  (Transamerica, at p. 401.)  This 
exception was based on explicit statutory language in the HCA 
prohibiting cancellation of a “ ‘policy of insurance, or surety 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
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Opinion of the Court by Corrigan, J. 
16 
bond’ ” without notice to the PUC.  (Transamerica, at p. 398, 
quoting Pub. Util. Code, former § 3634.)   
That language was not carried over into the Act.  The 
change does not appear inadvertent.  Like the HCA, an early 
draft of the Act would have conditioned a motor carrier’s 
“[r]egistration” with the Department on the filing of either “a 
policy of insurance,” a surety bond, or other evidence of 
insurance.  (Assem. Bill 1683 (1995–96 Reg. Sess.) § 55, as 
amended Aug. 30, 1995.)  The same draft would have required 
that “protection against liability . . . be continued in effect during 
the active life of the registration.”  (Ibid.)  In later drafts, that 
language was removed from the relevant provisions and 
replaced with requirements that:  (1) a “certificate of insurance” 
be filed with the Department; and (2) “proof of financial 
responsibility . . . be continued in effect during the active life of 
the permit.”  (Assem. Bill 1683 (1995-96 Reg. Sess.) § 53, as 
amended July 7, 1996.)  These were the requirements the 
Legislature ultimately approved.  (§ 34630, subds. (a), (b).)   
We generally infer a change in meaning from a change in 
statutory language.  An “ ‘essential change in the phraseology of 
a statutory provision would indicate an intention on the part of 
the legislature to change the meaning of such provision rather 
than interpret it.’ ”  (Estate of Todd (1941) 17 Cal.2d 270, 274–
275.)  This is especially true if a court has construed the old 
statute as having a particular meaning.  (See Benson v. Workers’ 
Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535, 1557 
(Benson).)  As O’Brien v. Dudenhoeffer (1993) 16 Cal.App.4th 
327 explained, an “amendment materially changing a statute 
following a court decision interpreting the statute in its original 
form is to be regarded as an indication of legislative intent to 
change the meaning of the law.”  (Id. at p. 335.)  We should 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
17 
therefore “reject an interpretation of the statute which would 
leave the prior judicial construction in effect.”  (Ibid.)   
The Act prohibits cancellation of a certificate of insurance 
without notice to the DMV.  (§ 34630, subd. (b); § 34631.5, subd. 
(b)(3).)  Unlike the HCA, it does not speak to cancellation or 
termination of the underlying policy, which embodies the 
agreement between the parties.  As a result, the Act does not 
prevent cancellation or termination of an insurance policy under 
the terms of the contract.   
It is undisputed that at least one certificate of insurance 
that United filed during the period it covered Porras remained 
uncancelled at the time of the accident.  The question remains:  
What impact does a certificate of insurance remaining on file 
with the DMV have with respect to the coverage that an insurer 
owes to its insured?  Again, we return to the language of the 
United policy, the certificate of insurance, and the endorsement.   
B. The Effect Upon Coverage of the Certificate of Insurance 
and the Required Endorsement 
Insurance coverage is generally understood to mean an 
obligation on the insurer “to defend and indemnify the insured 
against loss resulting from specified activities.”  (2 Witkin, 
Summary of Cal. Law (11th ed. 2017) Insurance, § 210, p. 329.)  
The certificate of insurance required by the Act mentions 
neither of these obligations.  They are, instead, imposed by the 
terms of the United policy and by the Endorsement, though the 
obligations are described differently in each document.   
In its certificates of insurance, United affirmed that 
Porras was covered by Policy 772, that the policy covered all 
vehicles for which Porras’s permit was required, and that a fully 
executed endorsement was attached to the policy.  It also agreed 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
18 
the certificate was not cancellable without 30 days’ written 
notice to the Department.   
The United policy promised that, if Porras “pa[id] the 
premium for liability coverage for the insured auto involved,” 
then United would pay damages up to the policy limits.  The 
policy also provided that United would “settle or defend, at [its] 
option, any [covered] claim or lawsuit for damages.”  Thus, so 
long as Porras paid the required premium, the policy required 
United to (1) defend or settle any covered claim against Porras 
and (2) indemnify Porras for any damages, up to the limits of 
liability.  If Porras did not pay the required premium, however, 
the policy would “automatically terminate at the end of the 
current policy period.”   
The Endorsement also addressed United’s duties to defend 
and indemnify Porras, but it altered some of the obligations 
United and Porras owed to each other under the terms of the 
underlying policy.  In the Endorsement, United promised to 
“pay, consistent with the minimum insurance coverage required 
by [section 34631.5], and consistent with the limits it provides 
herein, any legal liability of [Porras] for bodily injury, death, or 
property damage arising out of the operation, maintenance, or 
use of any vehicle(s) for which a motor carrier permit is 
required.”  United also promised that “[n]o provision, 
stipulation, or limitation contained in the attached policy or any 
endorsement [would] relieve [United] from obligations arising 
out of this Endorsement or the Act, regardless of insured’s 
financial solvency, indebtedness or bankruptcy.”   However, the 
Endorsement’s “coverage” excluded any “costs of defense or 
other expense that the policy provide[d].”  And the Endorsement 
specifically stated that it did “not prevent [United] from seeking 
reimbursement from [Porras] for any payment made by [United] 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
19 
solely on account of the [Endorsement’s] provisions.”  Thus, the 
Endorsement promised that United would pay Porras’s legal 
liability up to the statutorily required minimum amount 
notwithstanding any provision or limitation in the policy.  But 
it also allowed United to seek reimbursement from Porras for 
any payment United made solely on account of its provisions, 
and it specifically excluded the costs of Porras’s defense from its 
coverage.  More importantly for our purposes, the Endorsement 
was an amendment to the United policy.  Unlike the HCA and 
the endorsement applying General Order No. 100 in 
Transamerica, nothing in the Act or the Endorsement provides 
that the policy must remain effective until cancellation of the 
certificate of insurance.   
We emphasize that the question before us is a narrow one.  
We hold that an uncancelled certificate of insurance that 
remains on file with the DMV does not cause the corresponding 
insurance policy to remain in effect in perpetuity.  But that is 
not to say that an uncancelled certificate of insurance imposes 
no obligation of any kind on the responsible insurer.  The 
statutory scheme suggests otherwise.  For example, section 
34631.5, subdivision (d) provides that “[e]very insurance 
certificate or equivalent protection to the public shall contain a 
provision that the certificate or equivalent protection shall 
remain in full force and effect until canceled.”  Further, under 
the Act, an insurer remains obligated to promptly notify the 
DMV at least 30 days before a certificate of insurance is 
cancelled.  This obligation is an important part of the statutory 
scheme, alerting the DMV of the need to suspend a motor 
carrier’s permit until new insurance coverage is acquired.   
United has suggested in the federal litigation, and before 
this court, that an uncancelled certificate of insurance could 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
20 
impose on the insurer something akin to a surety obligation to 
members of the public.  The Ninth Circuit has not asked us to, 
and we need not, resolve whether such an obligation is created 
and the scope of any such obligation.  We express no opinion on 
those questions.  The character, nature, and extent of the 
obligations owed by a company that does not properly cancel a 
certificate of insurance are matters that can be clarified by 
further litigation and/or legislative action.   
C. Allied’s Counterarguments Fail 
In Allied’s view, the coverage provided by an insurance 
policy subject to the Act cannot lapse or be canceled until the 
insurer files a cancellation notice with the DMV.  Indeed, 
Allied’s primary argument is that the insurance policy, the 
endorsement, and the certificate of insurance are all inseparable 
parts of a single whole, none of which can exist or be canceled 
without an effect on the others.   
In support of this position, Allied points to section 34630, 
subdivision (a), which refers to “the policy represented by the 
certificate,” and section 34631.5, subdivision (b)(1), which refers 
to the certificate of insurance as “evidence[]” of the “protection 
required” by the Act.  Allied contends that, because the 
certificate is evidence of and “represents the policy,” it “cannot 
exist without an underlying policy.”  Allied argues that “even if 
the policy . . . is set to expire on a certain date, the [certificate] 
and the policy it represents will remain in effect until 30 days 
after written notice is given to the DMV.”   
Allied also relies on language in the certificate of 
insurance, in which United certified under penalty of perjury 
that Porras “is covered” by the United policy.  Allied urges the 
use of the verb “is” means that the policy must remain active 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
21 
until the certificate is canceled.  According to Allied, if a policy 
can be canceled while the corresponding certificate remains 
active, then the insurer would be subject to penalties for perjury.  
Allied argues the certificate would become “a hollow document” 
that “would certify a falsehood — i.e. that there is insurance 
available.”  To support its position that the policy and the 
endorsement are inseparable, Allied relies on language in the 
Endorsement providing that it is “attached to and made a part 
of” the United policy.  Finally, Allied points to the cancellation 
notice, urging that it provides notice of cancellation of all three 
documents:  policy; certificate; and endorsement.  Allied argues 
there is “no separate mechanism for canceling only one or two of 
the three . . . .  [E]ither all are active or all are canceled.”   
There is, of course, a linkage between an insurance policy 
subject to the Act, the certificate of insurance required by the 
Act, and the endorsement required by the DMV’s regulations.  
But the documents are not one and the same.  Rather, each 
serves its own function within the regulatory framework.  As 
explained, an insurance policy is an agreement between an 
insurer and its insured.  If a motor carrier complies with the Act 
by obtaining insurance, the certificate is evidence tendered to 
the DMV that the insurer agrees to be bound by the terms of the 
endorsement and therefore provides sufficient protection to 
satisfy the Act’s financial responsibility requirements.  The 
certificate 
thus 
demonstrates 
the 
carrier’s 
financial 
responsibility by virtue of its contractual arrangement with the 
insurer.  It is the document that supports issuance of the 
carrier’s permit, and its cancellation triggers the Department’s 
duty to suspend that permit.  The certificate, however, does not 
govern the obligations between the parties.  The endorsement, 
meanwhile, serves to ensure that the policy complies with the 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
22 
Act’s financial responsibility requirements and amends the 
policy to the extent of the endorsement’s terms.   
Allied’s argument, that an insurer might be subject to a 
perjury charge for failing to cancel a certificate of insurance 
when a policy expires, raises an interesting potentiality, but it 
does not establish that the certificate, the policy, and the 
endorsement are inseparable or cannot exist without one 
another.  Indeed, the premise that the three documents are 
indivisible is flawed.  On the contrary, a carrier can contract for 
coverage with an insurer, and that coverage can become legally 
binding on the parties without any endorsement and before any 
certificate is filed.  The fact a certificate “remains on file” with 
the DMV does not act to extend the policy’s coverage beyond its 
expiration date.  As for the Endorsement, its language clearly 
indicates that the nature of coverage it describes is different 
from that provided by the policy.  The Endorsement amended 
the policy in several ways.  If applicable, it would impose no duty 
to defend, and it would allow United to seek reimbursement 
from Porras under certain circumstances.  But, unlike the 
endorsement in Transamerica, supra, 12 Cal.4th 389, it did not 
change the duration of coverage, a subject to which it did not 
speak.  Therefore, the Endorsement did not convert the policy 
from one with an agreed-upon term to one which remained in 
effect until cancelled. 
Next, Allied argues there is no indication that the 
Legislature intended “to modify the financial responsibility 
requirements for motor carriers” or to change the rule from 
Transamerica, supra, 12 Cal.4th 389.  Rather, the Legislature’s 
purpose in passing the Act, according to Allied, was to conform 
state law to a newly enacted federal law that preempted parts 
of the HCA.  Allied points out that neither the Act nor its 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
23 
legislative history singles out Transamerica for “disapproval.”  
According to Allied, the change in statutory language was 
simply based on a change in the documentation required to be 
filed with the Department.7   
In construing a statute, we consider first the words of the 
statute as the most reliable indicator of legislative intent.  
(California Building Industry Assn. v. State Water Resources 
Control Bd. (2018) 4 Cal.5th 1032, 1041.)  Here, the HCA 
previously prohibited cancellation of an insurance policy 
without notice to the PUC.  In the Act, that prohibition has been 
removed and replaced with a prohibition on the cancellation of 
a certificate of insurance without notice to the DMV.  If the 
Legislature intended to perpetuate Transamerica’s holding, 
relating to the continuation of the underlying policy itself, it 
could have simply used the same language it used in the HCA.  
Allied cites no authority for the proposition that the rule from 
Transamerica must survive because the Legislature failed to 
specifically disapprove it in the new statute or to specifically 
note such an intention as part of its legislative history.  Well 
established authority supports the conclusion that a change in 
statutory language can, itself, be an indication of the 
Legislature’s intent.  (See O’Brien v. Dudenhoeffer, supra, 16 
Cal.App.4th 327, 335, and cases cited therein; see also Benson, 
 
7  
Under the HCA, an insurer was required to “ ‘deposit’ ” a 
“ ‘policy of insurance’ ” with the PUC as proof of a trucker’s 
financial responsibility (Pub. Util. Code, former § 3632), though 
with the PUC’s consent the insurer could file a certificate of 
insurance “in lieu of the policy” (Transamerica, supra, 12 
Cal.4th at p. 408 (dis. opn. of Baxter, J., citing Pub. Util. Code, 
former § 3633).  Under the Act, an insurer need only file a 
certificate of insurance to prove a motor carrier’s financial 
responsibility.  (§ 34631.5, subd. (b)(1).)   
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
24 
supra, 170 Cal.App.4th at p. 1557.)  Finally, that the Legislature 
sought to avoid federal preemption does not mean it did not act 
with other purposes in mind as well.   
Allied’s final argument is that, if we adopt United’s 
“position that the expiration of a policy eliminates the insurance 
company’s obligation under the policy despite [the] lack of notice 
to the DMV,” then “the entire system of financial responsibility 
for motor carriers [will] be eviscerated.”  The argument, though 
a bit hyperbolical, is related to a policy argument we raised in 
Transamerica.  There, we stated the “certificate of insurance 
that an insurance company files with the PUC serves as proof of 
a highway carrier’s adequate protection against liability . . . .  
[A] long-term PUC employee testified at trial that the PUC looks 
to the certificate as proof of a highway carrier’s compliance with 
the financial responsibility obligations imposed by the statutory 
scheme:  When a certificate for a policy of insurance is on file, 
the PUC assumes that the policy is still in effect, thus providing 
coverage for the highway carrier.  [¶]  In addition to providing 
an efficient means for the PUC to administer the [HCA’s] 
financial responsibility requirements . . . , the certificate of 
insurance on file with the PUC serves as assurance that the 
public is protected in the event of an accident involving a 
particular highway carrier.”  (Transamerica, supra, 12 Cal.4th 
at p. 403.)  Allied contends that, if we hold that an insurance 
policy subject to the Act can be canceled without notice to the 
DMV, then the public will be left unprotected if a motor carrier 
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
25 
without insurance, but with an active certificate of insurance 
representing an expired policy, is involved in an accident.8   
It is true that commercial trucking is a business affecting 
the public interest and that one goal of the regulating legislation 
is to ensure that truckers do not improperly seek to reduce costs 
by carrying inadequate insurance.  (Transamerica, supra, 12 
Cal.4th at p. 397.)  Transamerica reasoned that, as between an 
insurer who failed to properly notify the PUC of a policy’s 
expiration and a member of the public injured by an 
inadequately insured trucker, the insurer should bear the risk 
of loss.  (Id. at pp. 403−404.)  The Act’s legislative history 
indicates that it was also intended to “enhance public safety.”  
(See, e.g., Sen. Com. on Energy, Utilities and Communications, 
analysis of Assem. Bill. No. 1683 (1995–1996 Reg. Sess.) as 
amended July 7, 1996, p. 2.)  However, the extension of 
insurance coverage beyond the underlying policy’s expiration 
date is not the only way to achieve these public protection goals.   
As discussed above, further litigation or legislative action 
may clarify the particulars of how the overall statutory scheme 
will operate to protect the public.  That important policy 
question need not be resolved here.  The certified question arises 
only in the context of claims for equitable contribution and 
subrogation between two insurance companies.  It bears 
repeating that the plaintiffs in the underlying lawsuit were 
compensated to the full limits of Allied’s policy under the terms 
 
8  
We conclude that a policy can be cancelled even if the 
corresponding certificate of insurance remains on file.  
Accordingly, we need not consider whether a subsequent, and 
properly filed, certificate of insurance supersedes the vitality of 
any previously filed certificate relating to the same policy.   
ALLIED PREMIER INSURANCE v. UNITED FINANCIAL CASUALTY 
COMPANY 
Opinion of the Court by Corrigan, J. 
26 
of their settlement and that, at all relevant times, Porras 
properly maintained an active operating permit.   
III. 
CONCLUSION 
Under the Act, a commercial automobile insurance policy 
does not continue in full force and effect until the insurer cancels 
a corresponding certificate of insurance on file with the DMV.  
The duration of the policy’s coverage is regulated by its terms 
and those of any endorsement or amendment to the policy itself.   
 
CORRIGAN, J. 
 
We Concur: 
GUERRERO, C. J. 
LIU, J. 
KRUGER, J. 
GROBAN, J. 
JENKINS, J. 
EVANS, J. 
 
 
See next page for addresses and telephone numbers for counsel who 
argued in Supreme Court. 
 
Name of Opinion  Allied Premier Insurance v. United Financial 
Casualty Company 
__________________________________________________________  
 
Procedural Posture (see XX below) 
Original Appeal  
Original Proceeding  XX on request by 9th Circuit (Cal. Rules of 
Court, rule 8.548) 
Review Granted (published) 
Review Granted (unpublished)  
Rehearing Granted 
__________________________________________________________  
 
Opinion No. S267746 
Date Filed:  July 24, 2023 
__________________________________________________________  
 
Court:   
County:   
Judge:   
__________________________________________________________   
 
Counsel: 
 
Patrick Howe Law, Patrick M. Howe; Horvitz & Levy, Lisa Perrochet 
and Peder K. Batalden for Defendant and Appellant. 
 
Booth, Hillary Arrow Booth and Ian P. Culver for Plaintiff and 
Respondent. 
 
 
 
Counsel who argued in Supreme Court (not intended for 
publication with opinion): 
 
Peder K. Batalden 
Horvitz & Levy LLP 
3601 West Olive Avenue, 8th Floor 
Burbank, CA 91505 
(818) 995-0800 
 
Hillary Arrow Booth 
Booth LLP 
11835 West Olympic Boulevard, Suite 600E  
Los Angeles, CA 90064 
(310) 641-1800