PACIFIC SPECIALTY INSURANCE COMPANY STATE OF OREGON. Underwriting Guidlines Dwelling Fire Program

Transcription

1 PACIFIC SPECIALTY INSURANCE COMPANY STATE OF OREGON Underwriting Guidlines Dwelling Fire Program Basic Dwelling Policy (DP-1) Special Dwelling Policy (DP-3) Edition 1

2 Oregon Dwelling Fire Program Table of Contents 1. POLICY FORMS AND DWELLING LIMITS 3 A. Basic Dwelling Fire B. Special Dwelling Fire 2. ELIGIBILITY 3 3. POLICY TERM 3 4. OTHER INSURANCE 3 5. RESTRICTION OF COVERAGE 3 6. APPLICATION AND BINDING PROCEDURES 4 7. CATASTROPHE MANAGEMENT 4 A. Suspension of Binding Authority B. General Emergency Restrictions C. Miscellaneous Restrictions 8. INSPECTION FEE, POLICY FEE AND MINIMUM PREMIUMS 5 9. COVERAGES AND AMOUNTS 6 A. Basic Dwelling Policy (DP-1) B. Special Dwelling Policy (DP-3) 10. LOSSES INSURED 7 A. Basic Dwelling Policy (DP-1) B. Special Dwelling Policy (DP-3) 11. LOSS SETTLEMENT 7 A. Basic Dwelling Policy (DP-1) B. Special Dwelling Policy (DP-3) 12. SUBMIT FOR APPROVAL UNACCEPTABLE RISKS 8 A. Unacceptable Locations B. Unacceptable Properties C. Unacceptable Dwellings D. Unacceptable Risks 14. OPTIONAL COVERAGES AND LIMITS 11 A. Deductibles B. Extended Replacement Cost Coverage for Residence C. Personal Property (Coverage C) D. Replacement Cost Coverage for Personal Property E. Optional Liability Limits F. Optional Animal Liability Coverage G. Increased Other Structures (Coverage B) H. Addition of Named Peril of Theft to Optional Personal Property Coverage I. Vandalism and Malicious Mischief Coverage OR-DP1/3-GUIDE (Ed. 1) Page 1

3 15. PREMIUM CREDITS AND SURCHARGES 14 A. Multi-Policy Discount B. Fire Protection Discount C. Transfer Discount D. Homes with Less Than a 3-Foot Setback from Property Line Surcharge E. Multi-Family Units Surcharge F. Claim Record Rating Plan G. Copper Plumbing Discount H. Woodstove Surcharge I. Seasonal and Tenant Occupancy Surcharges 16. RESERVED FOR FUTURE USE CHANGES ON POLICY CANCELLATION OF INSURANCE TRANSFER OR ASSIGNMENT TERRITORIAL DEFINITIONS CONSTRUCTION CLASSIFICATIONS 17 A. Frame B. Stucco C. Masonry / Masonry Veneer D. Mixed Construction 22. FIRE PROTECTION DEFINITIONS FORMS 18 A. Coverage Forms B. Endorsements C. Underwriting Forms OR-DP1/3-GUIDE (Ed. 1) Page 2

4 1. POLICY FORMS AND DWELLING LIMITS A. Basic Dwelling Fire Policy Form DP-1 Dwelling Limits: Available up to $600,000 New Business / $650,000 Renewals B. Special Dwelling Fire Policy Form DP-3 Dwelling Limits: Available up to $600,000 New Business / $650,000 Renewals 2. ELIGIBILITY One to four family dwellings, occupied by the titled owner or tenant occupied, and used principally for private residential purposes. Seasonal usage and secondary dwellings, such as lake or beach homes, are acceptable. The dwelling must be: A. In good repair and the premises free of debris or trash (must show pride of ownership); and B. In Protection Class If Protection Class 8-10, the property must have access via an all weather road that will allow fire-fighting equipment to reach the premises. IMPORTANT: If any portion of the dwelling is rented or leased, the entire risk must be rated as Tenant Occupied. This includes duplexes, triplexes and fourplexes where owner occupies one unit and remaining units are rented or leased. NOTE: The term owner includes persons purchasing a dwelling, such as under a mortgage agreement or contract of sale. These Eligibility Guidelines are subject to the SUBMIT FOR APPROVAL and UNACCEPTABLE RISKS sections contained herein. 3. POLICY TERM Policies will be written for a maximum 12-month term only. A term of less than 12-months can only be written to ensure that the policy expiration date coincides with the annual expiration date of another insurance policy held by the named insured. If the term is less than 12-months, the premium (not the fees) will be prorated. The minimum premiums still apply. Direct bill premium invoicing is available, unless the term is less than 12-months. A premium invoice will be mailed directly to the insured days prior to each installment due date. A $10 service fee is added to all installments, but not the initial down payment. Current payment options include 3-Pay and 5-Pay direct bill options: The 3-Pay plan requires 1/3 of the premium, plus policy and inspection fees, as the down payment. The two remaining installments are billed by the company in 60 and 120 days. If the down payment is by check, the installments are billed. If the down payment is by credit card, the installments are automatically billed to the same credit card. The 5-Pay plan requires 20% of the premium, plus policy and inspection fees, as the down payment. The four remaining installments are billed by the company in 30, 60, 90 and 120 days. If the down payment is by check, the installments are billed. If the down payment is by credit card, the installments are automatically billed to the same credit card. 4. OTHER INSURANCE Other insurance covering the same property is permitted only when the other insurance is for perils not covered by the policy. (For example, Flood Insurance.) 5. RESTRICTION OF COVERAGE The named insured can request a restriction on an individual policy. The circumstances or exposure must be so unusual that without the restriction the policy would not be issued. No reduction from the prescribed rate and minimum premium is allowed. Refer each request to Pacific Specialty Insurance Company (or its representative). OR-DP1/3-GUIDE (Ed. 1) Page 3

5 6. APPLICATION AND BINDING PROCEDURES A Pacific Specialty Insurance Company ( PSIC ) dwelling fire application must be fully completed and mailed or electronically submitted to PSIC (or its representative). No coverage will be bound unless all of the following provisions are fully satisfied and approved by PSIC when the application is submitted: All underwriting rules are followed; and A PSIC application (including any/all necessary disclosures) is fully completed and signed by both the applicant and producer; and Required premium (or minimum required down payment) accompanies application; and All of the above referenced items are mailed or electronically submitted to PSIC (or its representative) within the following number of days from the requested effective date: If premium paid in full, 15 days; or If direct bill premium invoicing is requested, 5 days. Applications received in our office that are not postmarked within the required binding periods specified above, provided all binding procedures and underwriting criteria are met, will be made effective the date received in our office. However, this rule does not apply to applications that are bound and submitted electronically through the company s internet rating facility. If the dwelling has a woodstove, submit the application for approval with a completed woodstove questionnaire and one photograph. 7. CATASTROPHE MANAGEMENT A. SUSPENSION OF BINDING AUTHORITY 1. Non-Earthquake Related Conditions All binding authority is suspended whenever the following conditions exist in a given area: Impending severe local weather conditions, bulletins or civil unrest; or When any designated* hurricane or tropical storm is forecast to affect any portion of the state within 5 days. No applications for new coverage will be accepted. No endorsements of existing policies will be accepted which will have the effect of increasing the company s exposure. Applications with an effective date/postmark combination, which would violate the prohibition(s) listed above, will be rejected and no coverage will exist. Renewals of the company s expiring policies will be issued provided there is no increase in coverage or exposure. This temporary suspension of binding authority will remain in effect until these binding restrictions have been lifted by PSIC. *NOTE: A designated tropical storm or hurricane is a weather disturbance identified as a tropical storm or a hurricane by the United States National Weather Service. 2. Earthquake Related Conditions When a major earthquake occurs, PSIC (or its representative) may impose binding authority restriction on all agents in the affected area: Binding authority will be restricted when an earthquake reading 5.0 or greater on the Richter Scale occurs. Binding authority will be restricted for the day of the earthquake and for the 30-day period following the earthquake. An aftershock reading 5.0 or greater on the Richter Scale will be considered a new earthquake, and will result in a new period of suspended binding authority. The restrictions will apply to all counties located within 150 miles of the earthquake s epicenter. Renewals are not affected by these restrictions. OR-DP1/3-GUIDE (Ed. 1) Page 4

6 B. GENERAL EMERGENCY RESTRICTIONS PSIC may also establish discretionary restrictions on binding authority during emergency periods of potential floods, mudslides, forest fires, or other natural or manmade disaster emergencies. Agents who are aware of such conditions SHOULD NOT BIND COVERAGE UNTIL THEY HAVE CALLED THE COMPANY TO VERIFY THAT NO BINDING RESTRICTIONS ARE IN EFFECT. If enacted, these emergency restrictions will be identical to those detailed in the above Suspension of Binding Authority section. This temporary suspension of binding authority will remain in effect until these binding restrictions have been lifted by PSIC. C. MISCELLANEOUS RESTRICTIONS PSIC, as part of its Catastrophe Management Program, may also establish (at its discretion) temporary and/or permanent restrictions on binding authority to property control and maintain appropriate geographic concentration levels. 8. INSPECTION FEE, POLICY FEE AND MINIMUM PREMIUMS An independent inspection firm will be hired to inspect each property on both new and renewal business. The inspection fee is $35 per policy. The new and renewal policy fee is $25 per policy. Policy and inspection fees are fully earned and non-refundable. The annual minimum written premium is $75. All premiums are rounded to the nearest whole dollar. OR-DP1/3-GUIDE (Ed. 1) Page 5

7 9. COVERAGES AND AMOUNTS A. Basic Dwelling Policy (DP-1) The policy contains coverage for the Dwelling, Other Structures, Personal Property, Fair Rental Value and Other Coverages. Below is a brief description of the coverage provided. For a complete description, please refer to the policy. Policy Form DP-1 Coverage A: Dwelling The Described Dwelling 100% of Actual Cash Value Coverage C: Personal Property Personal Property Coverage is Max. 50% of Coverage A Optional Other Coverages: Other Structures 10% of Coverage A Amount Debris Removal Incl. in Limit Applied to Damaged Property Improvements, Alterations and 10% of Coverage C Amount Additions World-Wide Coverage 10% of Coverage C Amount Rental Value 10% of Coverage A Amount Reasonable Repairs Property Removed Fire Department Service Charge $500 Per Occurrence B. Special Dwelling Policy (DP-3) The policy contains coverage for the Dwelling, Other Structures, Personal Property, Fair Rental Value, Additional Living Expense and Other Coverages. Below is a brief description of the coverage provided. For a complete description, please refer to the policy. Policy Form DP-3 Coverage A: Dwelling The Described Dwelling 100% of Replacement Cost Coverage B: Other Structures Coverage C: Personal Property Coverage D: Fair Rental Value Coverage E: Additional Living Expense Other Coverages: Unattached Other Structures on the Described Location Personal Property Coverage is Optional Fair Rental Value of the Rented Portion of the Described Dwelling Living Expenses for Loss to Described Dwelling Debris Removal Improvements, Alterations and Additions World-Wide Coverage Reasonable Repairs Property Removed Trees, Shrubs and Other Plants Fire Department Service Charge Collapse Glass or Safety Glazing Material 10% of Coverage A Amount Max. 50% of Coverage A 10% of Coverage A Amount 10% of Coverage A Amount Incl. in Limit Applied to Damaged Property 10% of Coverage C Amount 10% of Coverage C Amount 5% of Coverage A Amount $500 Per Occurrence OR-DP1/3-GUIDE (Ed. 1) Page 6

8 10. LOSSES INSURED Below is a brief description of the losses insured (Please refer to the policy for a complete description of the coverage): A. Basic Dwelling Policy (DP-1) Damage to insured Dwelling (Coverage A), Other Structures (Coverage B) and Personal Property (Coverage C) is insured against loss caused by the following named perils, with certain conditions and exclusions: 1A. Fire or Lightning 1B. Internal Explosion 2. Windstorm or Hail 3. Explosion 4. Riot or Civil Commotion 5. Aircraft 6. Vehicles 7. Smoke 8. Volcanic Eruption 9. Vandalism or Malicious Mischief (Optional) B. Special Dwelling Policy (DP-3) Damage to insured Dwelling (Coverage A) and Other Structures (Coverage B) is covered against direct physical loss on an open perils basis, with certain conditions and exclusions. Damage to insured s Personal Property (Coverage C) is insured against loss caused by the following named perils, with certain conditions and exclusions: 1. Fire or Lightning 2. Windstorm or Hail 3. Explosion 4. Riot or Civil Commotion 5. Aircraft 6. Vehicles 7. Smoke 8. Vandalism or Malicious Mischief 9. Damage by Burglars 10. Falling Objects 11. Weight of Ice, Snow or Sleet 12. Accidental Discharge or Overflow of Water or Steam 13. Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging 14. Freezing 15. Sudden and Accidental Damage from Artificially Generated Electrical Current 16. Volcanic Eruption 11. LOSS SETTLEMENT Below is a brief description of the loss settlement provisions of each policy (Please refer to the policy for a complete description of the coverage): A. Basic Dwelling Policy (DP-1) Covered property losses are settled at actual cash value (ACV) at the time of loss, but not more than the amount required to repair or replace the damaged property. An 80% co-insurance requirement for the Dwelling and Other Structures exists. For an additional charge, limited replacement cost coverage is available for Personal Property. B. Special Dwelling Policy (DP-3) The structures insured under Coverages A or B are settled on a limited replacement cost basis. An 80% coinsurance requirement exists and optional Extended Replacement Cost Coverage can be purchased for an additional charge. Personal Property insured under Coverage C is settled on an actual cash value basis. For an additional charge, limited replacement cost coverage is available for Personal Property. OR-DP1/3-GUIDE (Ed. 1) Page 7

9 12. SUBMIT FOR APPROVAL The following risks require prior approval and applications must be submitted unbound: 1. Risks where any one dwelling or unit (i.e.: ½ duplex, 1/3 triplex) is rented to more than one family or more than 2 unrelated individuals. 2. Risks with a wood burning stove must be submitted along with a completed Wood Burning Stove Inspection Report (ATTACH Form No. PU1). 3. Risks with more than two related individuals on the deed of trust (must submit with details as to the relationship and reason for the multiple names). 4. Risks titled in corporate name or name of business, or that are financed by private parties or trustees. 13. UNACCEPTABLE RISKS PACIFIC SPECIALTY INSURANCE COMPANY will not accept the following risks, which have been generally categorized for your convenience. A. UNACCEPTABLE LOCATIONS: 1. Properties that are isolated or inaccessible to fire fighting equipment. 2. Properties located in a National Forest or other forested area that is also in fire protection classes 6 through 10 (see Fire Protection Definitions in Section 22 of this manual). 3. Properties located in any area of increased fire hazard. 4. Properties located in sinkhole, pollution, landslide, mudslide, or cave-in areas. 5. Properties located on active farm or ranch property, including incidental farming or ranching operations. B. UNACCEPTABLE PROPERTIES: 6. Properties larger than ten (10) acres. 7. Properties with barns valued over $5,000, or with extensive farming or ranching equipment. 8. Properties with pools, hot tubs, spas or similar structures not completely fenced and fully complying with all city and/or county ordinances. 9. Swimming pools with slide(s) and/or diving board(s) or similar structure(s) are acceptable. Please note that coverage for swimming pool slides, diving boards or similar structures is excluded for all policies by mandatory endorsement. 10. Properties with abandoned, non-operational or not regularly used vehicles, or where company vehicles are stored. 11. Properties with a greenhouse. 12. Properties with trampoline(s) on premises are acceptable. Please note that coverage for trampolines is excluded for all policies by mandatory endorsement. C. UNACCEPTABLE DWELLINGS: 13. Condominiums or townhouses. 14. Mobile homes, trailers (including recreational and utility), modular homes, boats, houseboats, automobiles, basement homes, portable buildings, prefabricated homes (or similar dwellings) or any structure made of cloth or canvas. 15. Apartment buildings (rental duplex, triplex or fourplex is acceptable). 16. Dwellings sharing common walls with other properties. 17. Dwellings not insured to 100% of replacement cost. A 3% annual inflation guard adjustment will be made to the Coverage A limit at each annual policy renewal if no other adjustment is indicated, however it remains the insured s responsibility to ensure that the dwelling remains insured to 100% of its replacement cost. 18. Dwellings where replacement cost of dwelling exceeds current market value. 19. Dwellings 91 years of age or older, except for qualifying renewals, are unacceptable unless the electrical system on the dwelling has been property updated within the last 15 years to conform with any building standards such as building codes or zoning laws required by government agencies and in effect at that time and provided that all underwriting guidelines and eligibility requirements of this program are satisfied. Prior approval is required on all new business, and applications must be submitted unbound and must include a fully completed Older Home Questionnaire (ATTACH Form No. PU2). 20. Dwellings with more than three (3) stories. 21. Dwellings with less than 750 square feet of living area. OR-DP1/3-GUIDE (Ed. 1) Page 8

10 22. Dwellings on piers, posts, pilings or stilts. This does not include dwellings on a solid foundation with post and pier construction that creates a small crawl space under the dwelling. 23. Dwellings without a solid or permanent foundation. 24. Dwellings undergoing extensive remodeling, renovation or construction effecting habitability. 25. Dwellings where construction was done by owner, unless a professional licensed contractor, including wiring, heating and plumbing. 26. Dwellings with unrepaired damage (including earthquake damage) and/or open or pending claims, and/or known or potential (a) defects, (b) claim disputes, (c) property disputes, and/or (d) lawsuits. 27. Dwellings of unusual, irreplaceable or cantilevered construction, including unusual construction that poses an increased hazard. 28. Dwellings with metal (other than hail-resistant), tin, copper, foam, corrugated, tar, flat or wood (other than treated shake) roofing, regardless of condition. 29. Dwellings with roofs that have not been replaced within the last 25 years or dwellings with roofs in poor condition (regardless of age) will be subject to endorsement limiting perils to fire and lightning only for roof and ensuing damage due to roof failure. If the dwelling was built in excess of 25 years prior to the requested effective date, a copy of evidence (e.g. copy of roof manufacturer s warranty indicating replacement date, copy of roof age disclosure statement from real estate transaction, etc.) or a fully completed and signed Age of Roof Disclosure form (Form PU3) showing roof has been replaced must accompany application, or the signed application must specifically disclose the age of the roof, or policy will be issued with endorsement limiting perils to fire and lightning only for roof and ensuing damage due to roof failure (ATTACH: Form PM5, Roof for Fire and Lightning Only Endorsement). This underwriting rule does not apply to dwellings with tile or hail-resistant roofs in excellent condition. 30. Dwellings with wood, coal or kerosene stoves as the primary heat source. 31. Dwellings with permanently installed space heaters that are not professionally installed. 32. Dwellings that do not have deadbolts on all standard doors that provide access to the dwelling or garage. 33. Dwellings that do not have the minimum number of smoke alarms as required by law. 34. Dwellings that do not have a fully functional fire extinguisher located on the premises. 35. Dwellings without copper wiring or with any fuse(s) providing power to any portion of the dwelling. 36. Risks without copper, galvanized steel or polyvinyl chloride (PVC) piping in good condition will have the Water Damage Exclusion for Plumbing endorsement (Form PM6) attached to the policy. For risks with PVC, the entire plumbing system utilizing PVC must meet ASTM or ANSI standards (usually stamped directly on the pipe), or be certified by Underwriters Laboratories, Inc. (UL). Risks with plastic pipes other than PVC or PVC-C, in whole or in part, including without limitation, polybutylene (PB) plumbing are unacceptable. This rule applies to the pressurized portion of the plumbing system, with the exception of drainage systems (such as under a sink) and exterior landscape irrigation systems. This underwriting rule does not apply to DP-1 risks. See Section 15 for rating rules relating to copper plumbing. D. UNACCEPTABLE RISKS: 37. Churches or non-profit organizations. 38. Risks not occupied within ten (10) days of requested effective date (except seasonal or tenant-occupied dwellings). 39. Risks without legal title to land upon which dwelling is located. 40. Risks where the titled owner does not reside full time (except seasonal or tenant-occupied dwellings). 41. Risks that have more than two mortgagees (except tenant-occupied dwellings). 42. Risks with more than two unrelated individuals on the deed of trust (except tenant-occupied dwellings). 43. Risks owned by well-known personality (political, entertainer, sports, etc.). 44. Risks where the applicant is in bankruptcy or where property is in foreclosure (presently or in last 60 days) or properties where tenants are behind in rent or where occupant in possession adverse to owner. 45. Risks occupied as rooming houses, fraternities, sororities, student housing or other similar types of occupancies. 46. Risks where space is rented in exchange for money, goods or services to any other person for any purpose (except tenant-occupied dwellings). 47. Risks where space is rented to others for commercial use or risks with any type of business (including childcare provided to unrelated individuals for compensation), trade or illegal activity on the premises. 48. Risks with more than four (4) non-theft claims or with more than two (2) theft claims within the last twelve months that resulted in a payment of at least $250 per claim. OR-DP1/3-GUIDE (Ed. 1) Page 9

11 49. Risks with any theft loss in the last 36 months (when theft coverage is purchased). Policy can be issued without coverage for theft (cannot be added mid-term). 50. Risks with repetitive similar cause losses. 51. Risks with 4 or more named insureds when liability coverage is desired in excess of $25, Risks with other insurance in force, except insurance that covers perils not insured by this dwelling policy. OR-DP1/3-GUIDE (Ed. 1) Page 10

12 14. OPTIONAL COVERAGES AND LIMITS The following optional coverages and limits are available: A. Deductibles The following deductible options are available: Deductible Modification Maximum Adjustment % --- 1,000 Base --- 1, % --- 2, % - $250 5, % - $500 B. Extended Replacement Cost Coverage for Residence (DP-3 Only) For special dwelling fire policies, an additional coverage amount equal to 20% of the Coverage A limit will be provided for loss payments above the stated limits for the following charge: Extended Replacement Cost Coverage Charge 8% When this coverage is purchased, the insured must notify the company within 90 days of any additions or other physical changes that increase the value of the covered dwelling by $5,000 or more and pay the appropriate premium. ATTACH: Form PO4, Extended Replacement Cost Coverage C. Personal Property (Coverage C) Personal property coverage is not included with the base premium for either basic (DP-1) or special (DP-3) policies. Coverage C for personal property can be purchased, at a rate of $3.00 per thousand ($1,000) in insured personal property for the first $5,000 in coverage, then at a rate of $1.00 per thousand in insured personal property, up to a maximum of 50% of the Coverage A limit. D. Replacement Cost Coverage for Personal Property Losses for personal property are settled on an actual cash value basis for both the DP-1 and DP-3 policies. Optional replacement cost coverage for personal property (Coverage C) is available for a 15% surcharge to the Coverage C premium. If selected, the entire Coverage C limit must be surcharged. ATTACH: Form PO5, Replacement Cost Coverage for Personal Property OR-DP1/3-GUIDE (Ed. 1) Page 11

13 E. Optional Liability Limits* (OLT or CPL): The basic (DP-1) and special (DP-3) policies do not provide any liability or medical payments coverage. These coverages can be purchased for both policies at the following additional premium amounts: Limit Single Unit Multi-Unit $25,000 $33 $62 $50,000 $51 $77 $100,000 $55 $86 $300,000 $86 $130 $500,000 $118 $177 *Medical Payments coverage of $250 per person / $5,000 per occurrence will be included when OLT/CPL coverage is purchased. IMPORTANT: Animal Liability is excluded on all risks unless purchased separately. F. Optional Animal Liability Coverage Animal liability coverage is not included, unless purchased and listed separately on the declarations page with a limit and associated premium charge. Personal liability coverage must also be purchased. This coverage is identified as coverage E1 Animal Liability. Please note, however, that this limited coverage does not apply to exotic or unusual pets, vicious animals, certain types of dogs, or farm or ranch animals, such as horses, whether trained or not. Please read endorsement PO14 for details. Limit* Premium $25,000 $13 $50,000 $20 $100,000 $50 *Selected limit cannot exceed personal liability limit. ATTACH: Form PO14, Limited Animal Liability Coverage G. Increased Other Structures (Coverage B) (10% included in package): For DP-1 policies, 10% of the Coverage A (Dwelling) limit may be used for Coverage B (Other Structures). This included amount is not additional insurance. Additional Coverage B may be purchased for DP-1 policies up to 65% of the Coverage A limit. Any additional amount purchased is treated as additional insurance. For DP-3 policies, Coverage B (Other Structures) is included as additional insurance with a limit equal to 10% of your Coverage A (Dwelling) limit. Additional Coverage B may be purchased up to a total of 75% of your Coverage A limit. Coverage A Rates Per $1,000 Protection Classes 1 7 Protection Classed 9-10 Owner Occupied $3.30 $6.00 Tenant Occupied $4.40 $7.70 H. Addition of Named Peril Theft to Optional Personal Property Coverage: For a rate of $2.00 per thousand ($1,000) in coverage, theft can be added as a named peril insured against for optional personal property coverage (Coverage C) for full-time owner-occupied units only. If selected, this coverage must be purchased for 100% of the Coverage C limit. Theft coverage is subject to a minimum charge of $ This coverage is not available for risks with prior theft losses identified in Unacceptable Risks (Section 13). OR-DP1/3-GUIDE (Ed. 1) Page 12

14 I. Vandalism and Malicious Mischief Coverage to DP-1 (Included with DP-3): Coverage A Rates Per $1,000 DP-1 $2.00 o Coverage must be purchased for 100% of Dwelling Limit o On Tenant Occupied risks, the applicable deductible for damage caused by act of tenant(s) is the maximum of $2,500 or the policy deductible listed on the declarations page. OR-DP1/3-GUIDE (Ed. 1) Page 13

15 15. PREMIUM CREDITS AND SURCHARGES The following premium credits and surcharges are applied to the base premium as indicated below, subject to a maximum overall credit of 50% for all credits and discounts combined. A. Multi-Policy Discount If the insured has another in-force policy with PSIC, a 15% premium credit will be allowed. This credit will apply to the basic premium for the policy and is available for all programs. This credit will be discontinued if the companion policy lapses. B. Fire Protection Discount A 5% discount will apply to the basic premium if the dwelling is equipped with an operating 24-hour fire alarm system that is connected to either a central station service or a fire department. C. Transfer Discount For new business only, a 10% credit to the basic premium will apply to the policy if the named insured on the policy has had continuous property insurance for the past nine (9) months for the same dwelling. This discount will be reduced to 5% at the first policy renewal, and will be removed thereafter. D. Homes With Less Than A 3-Foot Setback From Property Line (Row Houses included): 20% surcharge E. Multi-Family Units Surcharge (Maximum 4 Units): 2 Family Units: 4% Surcharge 3 & 4 Family Units: 25% Surcharge F. Claim Record Rating Plan The following adjustments will apply based on the insured s claim history and consecutive years insured with the company: Consecutive Years Number of Qualified Paid Claims in the Last 3 Years Insured with PSIC % +10% +35% +55% +85% 1-5% +5% +30% +45% +85% 2-7% 0% +25% +45% +85% 3-10% -5% +20% +45% +85% 4-13% -7% +15% +40% +85% % -10% +10% +35% +85% % -15% 0% +30% +85% 1. Consecutive Years Insured with PSIC The years with Pacific Specialty Insurance Company (PSIC) are determined by the number of consecutive years (ending with the current renewal date) the policyholder or spouse has had a PSIC policy covering their dwelling or contents issued under this program. If a policy is reinstated, the number of consecutive years with PSIC applying at the time of cancellation or expiration will be used, provided the reinstatement occurs within three years. (The period of time away from PSIC does not apply.) 2. Number of Qualified Paid Claims in the Last 3 Years The number of claims is determined by the number of qualified paid claims the policyholder has had in the last 3 years (ending 3 months prior to the current renewal effective date). A qualified claim is considered to be any non-catastrophe or non-weather related claim, which results in a net paid loss during this 3-year period. Losses which only have payments under Medical Payments coverage are NOT considered to be qualified claims. OR-DP1/3-GUIDE (Ed. 1) Page 14

16 G. Copper Plumbing Discount (DP-3 Only) Age of Plumbing Credit 1 10 years 5% years 3% years 0% years 0% 41 years & Over 0% The copper plumbing discount is applied to DP-3 policies when all pressurized pipes (excluding exterior landscape irrigation systems) are copper. Endorsement PM7, Copper Plumbing Agreement, is attached whenever the discount is applied. If the plumbing is not copper, galvanized steel or polyvinyl chloride (PVC), the policy will have endorsement PM6, Water Damage Exclusion for Plumbing, attached (please note that this coverage cannot be added mid-term). ATTACH: Form PM6, Water Damage Exclusion for Plumbing (if plumbing is not copper, galvanized steel or PVC); or Form PM7, Copper Plumbing Agreement (if discount is applied). H. Woodstove Surcharge If a woodstove is present, the application must be accompanied by a completed Wood Burning Stove Inspection Report and photograph. A 10% woodstove surcharge will be applied to qualifying risks. I. Seasonal and Tenant Occupancy Surcharges Tenant occupancy applies whenever any portion of the dwelling is rented or leased. If no portion of the dwelling will be rented or leased, but the dwelling is not the owner s primary residence, the dwelling shall be rated for seasonal occupancy. Primary occupancy applies only if the dwelling is occupied on a full-time basis as the owner s primary residence. The following surcharges apply to seasonal or tenant occupied dwellings: 16. RESERVED FOR FUTURE USE Occupancy Primary 0% Seasonal 20% Tenant 15% 17. CHANGES ON POLICY Coverages and limits (above the minimum) may be increased or decreased, added or deleted, during the term of the policy. Additional or return premium shall be computed on a pro rata basis. 18. CANCELLATION OF INSURANCE Both the basic (DP-1) and special (DP-3) dwelling fire policies may be canceled at the request of the insured at any time, subject to the following: It is not permissible to cancel any of the mandatory coverages provided unless the entire policy is canceled. In the basic dwelling fire policy, Coverages A, B and D are mandatory. In the special dwelling fire policy, Coverages A, B, D and E are mandatory. If the policy is canceled at the request of either the insured or the company, the return premium shall be 100% of the pro rata unearned premium, less the fully-earned fees. No flat cancellations are permitted if coverage has been provided. 19. TRANSFER OR ASSIGNMENT Transfer of the policy to another location within the state is allowed provided the new location meets eligibility requirements and there is no change in ownership. Transfers are subject to any necessary adjustment(s) of premium. OR-DP1/3-GUIDE (Ed. 1) Page 15

17 Assignment of insurance under the policy is not allowed. 20. TERRITORIAL DEFINITIONS The territorial zones used for rating all risks in this program are as follows: Territory City County 01 City of Eugene. Lane City of Portland, Excluding: 97129, 97216, 97220, , , 97233, 97236, City of Portland, Following Zips Only: 97129, 97216, 97220, , , 97233, 97236, Cities of Florence, Mapleton and Swisshome. Mulnomah Mulnomah Lane 03 Cities of Gardine, Reddsport and Scottsburg. Douglas Cities of Mount Angel and Saint Paul. Marion 04 City of Chemult. Klamath Territory Counties 03 Multnomah (remainder). 04 Harney, Lake, Malheur. 10 Benton, Douglas (remainder), Hood River, Josephine, Lane (remainder), Marion (remainder), Polk, Yamhill. 11 Baker, Clackamas, Clatsop, Columbia, Coos, Curry, Gilliam, Grant, Klamath (remainder), Lincoln, Linn, Morrow, Sherman, Tillamook, Umatilla, Union, Wallowa, Wasco, Wheeler. 12 Jackson. 13 Crook, Deschutes, Jefferson. 14 Washington. If a zip code is not assigned to one of the territories listed above, the following rules apply in the assignment of the appropriate territorial zone, subject to the discretion of Pacific Specialty Insurance Company. A. When a new zip code is created, it will be assigned to the same territorial zone as the geographic area that formerly constituted the new zip code s geographic area. In the event that more than one territorial zone formerly applied to the new zip code s geographic area, the zone that formerly applied to the greatest geographic portion of the new zip code s geographic area will be assigned to the new zip code. However, zip codes can be split into multiple rating territories when the split is based on the city or county in which the risk is located. B. When the boundary of an existing zip code changes, the territorial zone formerly applied to the zip code will be assigned to the new boundary of the zip code. If the change in zip code boundary results in a change to the territorial zone applied to an existing policy, the new zone will be applied to the policy at its next annual renewal. C. If a zip code is omitted from the Territorial Definitions of this manual for any reason other than those listed in A. or B. above, the lowest rated contiguous zone will be applied to the omitted zip code, subject to the ability to split the zip code based on the city or county in which the risk is located. OR-DP1/3-GUIDE (Ed. 1) Page 16

18 21. CONSTRUCTION CLASSIFICATIONS The following construction classifications apply to this program: A. Frame A dwelling with exterior walls of combustible construction (including walls with metal, or metal lath and plaster on combustible supports) is classified as frame. B. Stucco A dwelling with walls of stucco or non-flammable and non-masonry material. C. Masonry/ Masonry Veneer Masonry: Masonry Veneer: A dwelling with exterior walls of brick, concrete, concrete block, adobe, tile or other masonry materials is classified as masonry. A dwelling with walls of combustible construction veneered with masonry materials is classified as masonry veneer. D. Mixed Construction A dwelling shall be classified as frame construction when the wall area of frame construction (excluding gables) exceeds 51% of the total wall area. 22. FIRE PROTECTION DEFINITIONS The Public Protection Classifications generally published in the Merritt Manual apply as follows: A. In a municipality or other classified area where a single classification number is shown, use that classification number for all properties located in that classified area. B. In a classified area where two or more classification numbers are shown (e.g. 6/9), the applicable classification number is determined based on the distance to a responding fire station and the distance to a fire hydrant. 1. For properties located five road miles or less from a responding fire station and within 1,000 feet of a fire hydrant, use the first protection class shown (e.g. 6/9, use class 6). 2. For properties located five road miles or less from a responding fire station and beyond 1,000 feet of a fire hydrant, use class For properties located more than 5 road miles from a responding fire station, use class 10. C. In a classified area serviced by a subscription-type fire department, use class 10 for properties that do not subscribe. D. Use class 10 for all properties not classified. OR-DP1/3-GUIDE (Ed. 1) Page 17

19 24. FORMS COVERAGE FORMS Form Program (M)andatory / (D)ynamic / Program Edition Title Source Number Applicability (O)ptional (S)tatic Code DP-1 Ed. 2 Basic Dwelling Fire PSIC DP-1 M S Y DP-3 Ed. 2 Special Dwelling Fire PSIC DP-3 M S Y ENDORSEMENTS Form Program (M)andatory / (D)ynamic / Coverage Edition Title Source Number Applicability (O)ptional (S)tatic Code PM1-OR-DP Ed. 1 Oregon Amendatory Endorsement for DP-1 & DP-3 Policies PSIC All M S PM2 Ed. 1 Animal Liability Exclusion PSIC All O S E1E PM3 Ed. 1 Occupancy Endorsement (Primary Residence Only) PSIC All M S PM4 Ed. 1 Satellite Dish Exclusion PSIC All M S PM5 Ed. 1 Roof for Fire and Lightning Only Endorsement PSIC All O S X PM6 Ed. 1 Water Damage Exclusion for Plumbing PSIC DP-3 O S PM6 PM7 Ed. 1 Copper Plumbing Agreement PSIC DP-3 O S PM7 PM9 Ed. 1 Mold Exclusion PSIC All M S PM11 Ed. 2 Increased Deductible for Loss or Damage Caused by Tenants PSIC All M S PM18 Ed. 1 Trampoline Exclusion PSIC All M S PM19 Ed. 1 Swimming Pool Slide or Diving Board Exclusion PSIC All M S PM20 Ed. 1 Inflation Guard PSIC All M S PO1 Ed. 1 Comprehensive Personal Liability PSIC All O S G PO2 Ed. 1 Owner's, Landlord's and Tenant's Liability Coverage PSIC All O S I PO3 Ed. 1 Theft Coverage for Full-Time Owner-Occupied Dwellings PSIC All O S C0 PO4 Ed. 1 Extended Replacement Cost Coverage PSIC DP-3 O S A1 PO5 Ed. 1 Replacement Cost Coverage for Personal Property PSIC All O S C1 PO10 Ed. 1 Exclusion of Cosmetic Damage to Hail Resistant Roof PSIC All O S HR1 PO14 Ed. 1 Limited Animal Liability Coverage PSIC ALL O S E1 UNDERWRITING FORMS Form Program (M)andatory / (D)ynamic / Edition Title Source Number Applicability (O)ptional (S)tatic Condition PU1 Ed. 1 Wood Burning Stove Inspection Report PSIC All O D Cvg = N PU3 Ed. 2 Age of Roof Disclosure - 25 Years PSIC All O D Age > 25 PU5 Ed. 2 Older Home Questionnaire - Dwelling Fire PSIC All O D Age > 90 OR-DP1/3-GUIDE (Ed. 1) Page 18

20 A. Coverage Forms OR-DP1/3-GUIDE (Ed. 1) Page 19

21 B. Endorsements OR-DP1/3-GUIDE (Ed. 1) Page 20

22 C. Underwriting Forms OR-DP1/3-GUIDE (Ed. 1) Page 21