TEXAS PERSONAL AUTO MANUAL

Transcription

1 TEXAS PERSONAL AUTO MANUAL

2 CORNERSTONE NATIONAL INSURANCE COMPANY Texas Automobile Program General Provisions Page Section I: General Guidelines and Rules 1-14 Section II: Rates and Procedures Personal Automobile Manual; Index Page Additional Coverages and Endorsements: 10 Additional Insured-Lessor 10 Audio, Visual and Electronic Data Equipment Coverages 11, 25 Customized Vans and Customized Pickups 11, 24 Extended Transportation Expense 11, 26 Extended Non-Owned 11, 24 Leased Vehicles 10 Personal Insurance Protection (PIP) 10, 52 Medical Payments 10, 53 Pickup and Vans-attachments 11 Tapes, Records, Discs and Other Media Coverage 11, 26 Towing and Labor 10, 24 Uninsured Motorist Coverage 10 Base Rates and optional premium tables Collision 51 Liability and Liability Property Damage 47 Medical Payments 56 Other Than Collision 49 Personal Injury Protection 52 Underinsured/Uninsured Motorist 54 Cancellation Procedures 10 Cancellation Pro Rata Table 31, 32 Claims: 9, 10 Chargeable Claims 9 Experience Period 9 Non-Chargeable Claims 9, 10 Classification Determination: 16 Age of Vehicles 26 Changes in Classification 16 Primary Classification 16 Secondary Classification 16 Coverages Acceptable 2 i

3 Coverage Limits, Factors, Premiums: 42, 43 Bodily Injury Limits/Property Damage 47 *Also see Do Not Bind Lists 42, 43 Collision, Model Year and Symbol Relativities 50, 51 Extended Transportation Expense 26 Extended Non-Owned 24 Medical Payments 53 Other Than Collision, Model Year and Symbol Relativities 48, 49 Personal Injury Protection (PIP) 52 Definitions and Interpretations: 2 Auto 3 Confidential Information 3 Liability 3 Married 2 Named Insured 3 Occasional Driver or Operator 2 Prior Insurance 3 Principal Driver or Operator 2 Resident 3 Trucks 2 Vehicle Inspection and Pictures 3 Do Not Bind-Applicants 6 Do Not Bind-Vehicles 6 Do Not Bind-Limit Restrictions 42 Eligibility 5 Expense Constants 56 General Provisions 1 Applications 1 Bound Applications 1 Binding Limits 42, 43 Policy Terms and Renewals 1 Miscellaneous Procedures and Endorsements: 7 Military Personnel 7 Physically Impaired Drivers 7 Miscellaneous Programs: 12 Antique Cars 13, 29 Classic Cars 13, 29 Recreational Trailers and Campers 12, 27 Utility Trailers 12, 28 Non-Insurable/Non-Binding Risks-Applicants 5, 6 Non-Insurable/Non-Binding Risk-Vehicles 6 Payment Options 55 Policy Discounts 45 Claim Free Discount 7, 23, 45 ii

4 Driver Improvement Course 8, 23, 45 Driver Training Credit 7, 23, 45 Good Student Discount 8, 23, 45 Homeowner Policy Credit 7, 23, 45 Multi Car Discount 7, 16 Policy Renewal Discount 8, 24, 46 Paid In Full Discount 8, 45 Premium Adjustment Program: Accident Rating Factors 44 Convictions Rating Factors 44 Eligibility and Qualifications 42 Inexperienced Driver 44 Insurance Credit Score Factors 46 Prior Insurance 44 SR Violation Classification 44, 45 Waiver of Surcharges 45 Premium Determination 14, 15 Rating Procedures, Algorithm 15 Rate Cap Factor 56 Rate Factor and Statistical Codes: 15, Primary Classification Table I Secondary Classification Table II 22 Symbols for Pickups Rated as Private Passenger Cars & Classic Cars 30 *Also see Collision & OTC model year and symbol relativities 50, 51 Territory Definitions 4, Vehicle Use: 4 Business Use 4 Business Use Government 4 Farm Use 4 Non-Business Use 4 Pleasure Use 4 Work Less Than 15 Miles 4 Work 15 Miles or More 4 iii

5 CORNERSTONE NATIONAL INSURANCE COMPANY Texas Automobile Program Guidelines and Rules, Section I The Guidelines and General Rules includes rules and rates that are applicable to the Cornerstone National Insurance Company. The goal of our company is to write profitable automobile business. The guidelines and rules are provided to aid agents and producers with the selection of good risks. The agents should evaluate and underwrite business before submitting the application for approval. Electronic uploads on Acord applications are to be used whenever possible. Some of the contents of this manual contain copyrighted materials of Insurance Services Office, Inc. with permission. Copyright, Insurance Services Office, Inc. GENERAL PROVISIONS Applications: A signed application must be completed on each new risk. The original completed and signed application must be maintained in the agent s office. Any application submitted without disclosing all drivers, loss history, including Other Than Collision (comprehensive) claims and violations may be declined and not considered for reinstatement. Any application submitted without monetary consideration will not be considered bound. The agent is responsible for retaining the original application. If PIP or UM is rejected, the agent is to retain the original rejection forms. The agent is responsible for producing these forms on demand. Bound Applications: Applications are to be uploaded directly on to our Policy Tracking System (PTS) with payment swept from the agents account. In the event of electronic failure, the next paragraph describes our back-up work flow procedures. Applications must be postmarked, or submitted, to the Company within 72 hours of the effective date. Applications received after the 72 hour postmarked period will become effective on the date received in the home office. Policy Terms and Renewals: 1. Policy terms shall be: a. Semi-annual term at rates shown in the manual. On six month policies with an effective date of the 29 th, 30 th, or 31 st of any month, the first policy can be extended from the effective date to the first day of the calendar month following the expiration of the policy. The premium for this extended coverage of one to three days may be waived. 2. Renewals: When an agent collects the renewal payment before the due date, he/she should note the date and time of the collection on the notice that is being mailed to the company. This shows coverage is in force continuously in the event payment is not received by the office until after the due date. Uploading the payment directly to the company is preferred. 1

6 COVERAGES ACCEPTABLE Acceptable coverages with are: 1. Bodily Injury Liability, Property Damage Liability, Personal Injury Protection (PIP) and/or Medical Payments and/or Uninsured Motorist Coverage alone; 2. Bodily Injury Liability, Property Damage Liability and PIP Coverage with Physical Damage; 3. Other Than Collision and Collision Coverage, only with Liability, PIP and UM; Other Than Collision and Collision Coverage is usually not accepted on vehicles 1989 model year or older. If considered, we will need photos of the vehicle; 4. Uninsured-Underinsured Motorist Bodily Injury Coverage, only with Liability and PIP. Limits cannot be greater than the Liability Limits; 5. Extended Transportation Expense Coverage, only with Other Than Collision and Collision; 6. Towing and Labor Cost Coverage, only with Liability, PIP and UM. * If PIP or UM has been rejected, the agent is responsible for retaining original, signed documents. DEFINITIONS AND INTERPRETATIONS Private Passenger Automobile: A four wheel motor vehicle of the private passenger, station wagon or jeep type owned by or leased under contract for a continuous period of at least six months. A motor vehicle with a pickup, van or other truck body with a gross vehicle weight rating of 10,000 pounds or less shall also be defined as a private passenger automobile. The word automobile as used in this manual means a vehicle defined as a private passenger automobile. Trucks: Motor vehicles of the truck type having a manufacturer s gross vehicle weight rating of 10,001 pounds or more and merchant s trucks and vans commonly referred to as ¼ ton, ½ ton, ¾ ton and one ton. Trucks are not eligible for the private passenger automobile program. Principal Driver or Operator: One who drives the vehicle 50% or more of the time. In the event there are three operators and three vehicles insured for one family and one operator is unmarried and under the age of 25, then that driver will be considered a principal operator of one unit and charged the appropriate rate. The same rule applies if there are two automobiles and two operators if one is unmarried and under 25. Youthful drivers are to be assigned to the vehicle they drive, not necessarily the highest rated vehicle. Occasional Driver or Operator: One who drives the vehicle less than 50% of the time or miles driven. An occasional youthful operator must be added to the vehicle which develops the highest premium. Married: A married person living with their spouse. 2

7 Resident: Anyone residing in the same household except: 1. An individual in active military service will not be considered a resident of the household unless such individual regularly operates the automobile. 2. A youthful unmarried female occasional operator or a youthful unmarried male occasional operator who is a resident student at an educational institution over 100 miles from the place of principal garaging of the automobile shall be considered a resident in the household but the automobile shall be rated as if the operator were married, while away at school. Auto: Refers to a private passenger auto or a vehicle considered as a private passenger auto. Liability: Refers to Bodily Injury and Property Damage Coverages. Single Limit coverage not available. Named Insured: Generally the names on the title to the vehicle should be the same as the names on the application and policy. The name of the principal driver may be included on the application along with the name of the person having the title. Parent(s) must be on title on all youthful operators age 17 and under. Vehicle Inspection and Pictures: Agents are expected to make a thorough inspection of the insured automobile. A description and location of all existing damages should be listed on the application. Pictures are required of all automobiles with physical damage coverage for: 1. Automobiles 15 years and older; all vehicles 25 years and older regardless of coverage. 2. Customized vans and pickups, 3. Classic cars and antique cars. Confidential Information: Agents will receive correspondence from our office containing confidential information on questions about applicants or policyholders. These letters are for agents personal use only and should not be disclosed, or sent, to anyone other than a company representative. Prior Insurance: Proof of prior insurance must be maintained with the agent on new applications. Documents which we will accept as proof are: 1. Company issued declarations page from prior policy period; 2. Company issued offer to renew existing policy, including identification card; Notice of cancellations with effective dates. 3

8 VEHICLE USE DEFINITIONS Refer to Rates and Procedures Section II for rate factors and statistical codes. (Table I) Pleasure Use: There is no business use of the automobile and it is not used in the course of driving to or from work or school more than 3 road miles one way. Work Less Than 15 Miles: There is no business use of the automobile but it is used in the course of driving to or from work or school a distance of more than 3 miles and less than 15 road miles one way. Work 15 or More Miles: There is no business use of the automobile but it is used in the course of driving to and from work or school a distance of 15 or more road miles one way. Business Use: Any vehicle used in the insured s business or occupation, except described below. Acceptable business use includes, but not limited to: vehicles used by sales, service, real estate, and insurance representatives. No delivery, taxi services or livery conveyance is acceptable. Trucks used in business are not acceptable; except for farmers and self-employed artisan contractors, such as, but not limited to, carpenters and electricians that generally go to a job site and work at one location for the day. Business Use Government Use: A vehicle used in the business of the United States Government by an employee of the Government, shall be considered a private passenger auto only if: 1. It meets the conditions of a private passenger vehicle, and 2. Coverage is limited in accordance with the federal employees using autos in government business endorsement. Non Business Occupations: Automobiles used by individuals in the following occupations shall not be considered as used for business use: 1. Clergymen, except evangelists. 2. County and State Agricultural Extension Personnel. 3. Home Health, Social and Welfare workers. 4. Soil and Wildlife Conservation Commission Personnel. Farm and Ranch Use: A farm and ranch automobile if: 1. Garaged on a farm or ranch. 2. Not ordinarily used in going to or from work or school. 3. Not used in any occupation other than farming or ranching. 4. The principal operator is actively engaged in farming or ranching. Territory: ISO territories are used based on the garaging location of the insured vehicle. Refer to rates and procedures for territory codes, and rate factors. 4

9 ELIGIBILITY 1. Personal Auto Policy shall be used to afford coverage to private passenger autos if: a. They are written on a specified auto basis, and b. They are: 1-owned by an individual or by a husband and wife who are residents in the same household, or 2-owned jointly by two or more resident relatives other than husband and wife, or 3- owned jointly by two or more resident individuals, or 4-owned jointly by two or more non-resident relatives, including a non-resident household husband and wife, or 5-owned by a farm family co-partnership or farm family corporation. 2. Youthful Operators Assignment of vehicles: a. Assign any youthful principal operator to the auto they principally operate. b. Assign other youthful operators to remaining autos as follows: 1-Determine the primary pleasure use rating factors of all youthful operators. 2-Assign the youthful operator with the highest primary rating factor to the auto he/she operates most frequently. 3-Remaining youthful operators are assigned to remaining autos in the order of the highest rated youthful operator to the auto with the highest total base premium. 5-Any remaining autos are rated at the appropriate No Youthful Operator classification. NON-INSURABLE RISKS-APPLICANTS Do not submit an application for the following applicants: 1-Persons who use alcohol, drugs or narcotics to excess. If the person has more than one alcohol or drug related violation in their history, they are not insurable; 2-Persons engaged in any illegal or illicit business of any kind; 3-Individuals whose records disclose frequent or serious accidents; 4-Persons or physically impaired drivers with health problems that make them susceptible to accidents or to serious complications if injured, such as, but not limited to: a. Neurological disorders, b. Near loss of sight, c. Severe heart condition in past 3 years, d. Epilepsy in the past 5 years, e. Loss of use of hands and/or feet, f. Use of insulin for diabetes. 5-Non-citizens of the United States, unless they have had two years of driving experience in this country. 5

10 NON-INSURABLE RISKS-VEHICLES Do not submit an application for the following vehicles: 1-Any vehicle with tracks, crawler treads, or more or less than four (4) wheels, 2-Gray Market cars-cars not originally manufactured to meet U. S. standards, 3-Vehicles used for pickup/delivery, livery, limousine or taxi service, or any commercial purposes, 4-Emergency vehicles, 5-Vehicles equipped or used for snowplowing, 6-Restored, custom built, reproduction cars, kit cars, or limited production vehicles, 7-Motor homes and recreational vehicles, 8-Vehicles not registered for street use, 9-Vehicles with non-factory mechanical or structural modifications, 10-Racing, Dragsters, Hot Rods or Stock Cars, and Dune Buggies. 11-Physical Damage coverage on vehicles model year 1989 or older, except in Classic or Antique Program. DO NOT BIND-APPLICANTS Do not bind coverage on the following applicants: 1-Applicants that have had a license suspension or revocation within the last five years; 2-Persons who have never been licensed; 3-Persons who are required to file proof of future financial responsibility for any reason; 4-Applicants who are disabled will need to complete a medical statement; 5-Persons age 75 and over will need a doctor s statement along with a medical statement; 6-Applicant who is a minor requesting coverage as a named insured; 7-Operators without a valid Texas Drivers License. Out of State license may be acceptable if the driver obtains a valid Texas license within 30 days of the policy inception. 8-Applicants under age 19 may not be bound unless we have supporting parental auto business. 9-Generally applicants with two (2) at-fault accidents (AFA) are not acceptable, however, consideration will be given to a person with two (2) AFA Property Damage only type losses. DO NOT BIND-VEHICLES Do not bind coverage on the following vehicles: 1-Vehicles which are held for resale or rental use; 2-Vehicles with Manufactured Suggested Retail Price (MSRP) over $50,000; 3-Vehicles with ISO rating symbols of 23 or greater, or vehicles with ISO rating symbols of 52 or greater for model years 2011 and newer; 4-Vehicles model year 1989 or older with physical damage coverage, except as authorized by Cornerstone National s underwriting department. Agent must contact underwriting prior to binding coverage; 5-Vehicles with high rollover experience such as, but not limited to: 15 passenger vans; Any vehicle equipped with oversized tires, lift kits, roll bars and/or winches; 6-Vehicles that are not factory manufactured or rebuilt to enhance performance such as, but not limited to the following: Ford Mustang Saleen & Shelby models; 7-Vehicles not rated by ISO. 8-Vehicles with existing damage and physical damage coverage. Exceptions: vehicle with broken windshields may be endorsed with CPA-060 Windshield Exclusion, until damage has been repaired. 6

11 ELIGIBILITY AND QUALIFICATIONS The qualifications to determine acceptance into the private passenger automobile program is determined by the Non-Insurable and Non-Binding listed circumstances as listed within these guidelines. In addition, the limits of liability that may be bound varies with the number of at-fault accidents and or violation convictions charged to each driver. The greater the number of at-fault accidents and violation convictions, the lower the accepted limits. See binding limit restrictions page 43. Military Personnel Must be located in the specific geographical territory in which our company customarily operates, and meet all other underwriting requirements Physically Impaired Drivers Applicants with a physical impairment may be submitted for consideration on an inquiry basis only. Submit all facts, including an Acord Medical Statement, about the impairment. POLICY DISCOUNTS Refer to rate pages for amount of each specified discount. Driver Training Credit Credit may be allowed for youthful operators under 21 years of age who have completed an approved Driver Training Course. The applicable With Drivers Training Rating Factor and Statistical Code shall apply. Homeowners Policy Credit A discount factor may be applied to policies when the Named Insured(s) own(s) a home and live(s) in the home. Home is defined as a house, condominium, townhouse or mobile home when used as a primary residence. The discount is not available to minors whose parents are homeowners, unless the parents are insured under the same policy and have a vehicle scheduled on the policy. Proof of home ownership may be requested with the application in order to qualify for the discount. Examples of proof include the declarations page of the Homeowner policy, title, tax bill, etc. An affidavit from the insured stating they own a home will also be accepted. Other documentation may be required to verify that the home is an eligible structure. Claim Free Discount: A discount is provided to the applicant or existing policy if the insured drivers do not have any atfault accident payments made on the insured behalf, within the three (3) year rating period. Multi Car Discount The applicable Multi Car rating factor applies if more than one private passenger auto is owned by an individual, or owned jointly by two or more relatives, or resident individuals and two or more such autos are insured on the same policy. The discount also applies to an auto owned by a corporation or business firm and primarily operated by the named insured(s) or family members who are residents of the same household. Refer to rates and procedures section (Table II) for rate factors and statistical codes. 7

12 Good Student Discount Unmarried operators age are eligible for a Good Student Discount when the following criterion is met: 1. The student must be enrolled full time: a. As a high school student; b. In academic courses in college or university; or c. In a vocation technical school. 2. A certified statement from a school official is presented to the Company indicating that one of the following requirements during the immediately preceding school semester has been achieved: a. Is in the upper 20% of his/her class scholastically; b. Maintains a B average, or its equivalent. If the letter grading system can not be averaged, then no grade can be below B ; c. When in a school maintaining a numerical grade, must have at least a 3 in a 4,3,2,1 point system, or its equivalent. Driver Improvement Course Discount A Driver Improvement Course Discount is provided if a qualifying course was completed within 36 months of inception date. This discount does not apply if the applicant has taken the course as a result of a court order. Paid in Full Discount When an applicant elects the paid-in-full term policy, a discount applies. Terms offered are semiannual rate. This discount is in addition to all other applicable discounts. Transfer/Policy Renewal Discount A discount will be applied to all coverages based on the greater of the number of years in force with: -Either, the prior insurance company, as long as there was no lapse in coverage greater than 30 days. -Or, Cornerstone. Premium Adjustments Additional premium charges will be made when the policy is endorsed subsequent to the inception date to reflect changes in the policy such as, but not limited to, the addition of a driver, change in the use of the vehicle, territory, coverage or limits of coverage. The additional premiums will be computed on a pro-rata basis. Transfer Discount Prior to January 15, 2012, when a policy is being rewritten from an auto company, a transfer discount will apply. Proof of prior insurance must be submitted with the application and maintained with the agent. 8

13 CLAIMS Experience Period The experience period shall be three years immediately preceding the date of the application or the preparation of the renewal. Chargeable Claims Accident at-fault shall mean the applicant or other driver of applicant s vehicle is fifty percent (50%) or more at fault. Claims for which the amount of payment if $1,000 or less shall not be considered chargeable. An accident shall be considered at-fault unless the applicant furnishes the company at the time of application, or in the case of renewal, at least 45 days prior to renewal date, with official data or affidavits, from a legally constituted public authority, or other proof satisfactory to the company that such applicant or other driver was not at-fault. Note: If a single occurrence results in multiple surcharges, assign a surcharge only for the one incident that generates the higher rating factor, except for violations involving alcohol or drug-related offenses. Non-Chargeable Claims No points shall be assigned for accidents under the following circumstances: -Medical Payments Personal Injury Protection: Accidents involving Medical Payments only or Personal Injury Protection only. -Legally parked, standing or stopped: A motor vehicle of the Applicant or any operator of the automobile currently a resident in the same household damaged while legally parked, standing or stopped. -Unattended automobile: Accidents involving an automobile of the Applicant or any operator of the automobile currently a resident in the same household while such automobile is unattended. -Reimbursement: Applicant or any operator of the automobile currently a resident in the same household, or owner of the automobile driven by Applicant or any operator of the automobile currently a resident in the same household, reimbursed by or on behalf of the person responsible for the accident or has judgment against such person; or upon Applicant s showing that judgment was not sought for the reason that such person failed to prove financial responsibility under Texas Motor Vehicle Safety Responsibility Act. -Governmental immunity: Accidents involving government-owned property or vehicles when governmental immunity solely prevents recovery from the government. -Rear-end collision: Automobile driven by Applicant or any operator of the automobile currently a resident in the same household struck in rear by another vehicle approaching from the rear, and the Applicant or any operator of the automobile currently a resident in the same household was not convicted of a moving traffic violation in connection therewith. -Other party charged: Operator of any other automobile involved in the accident charged with a moving violation and the Applicant or any operator of the automobile currently a resident in the same household was not convicted of a moving violation in connection therewith. -Hit-and-run: Automobile operated by Applicant or any operator currently resident in the same household damaged by hit-and-run driver, if Applicant or other resident operator reports the accident to proper authority within 24 hours. -Animals or fowls: Accidents involving damage by contact with animals or fowls. -Flying gravel and falling objects: Accidents involving physical damage, limited to and caused by flying gravel or falling objects. -Accidents on premises: Accidents on premises owned, rented or leased by Applicant or any operator of the automobile currently a resident in the same household. 9

14 -No fault: Any other accident in which the Applicant or operator was not at fault. (If the accident was of the type required to be reported to law enforcement authorities under any traffic law or traffic ordinance and was investigated by a law enforcement authority and the Applicant or operator was not charged with a violation, it will be presumed that the Applicant or operator was not at fault.) CANCELLATION PROCEDURE If a policy is canceled by the company, the return premium shall be computed pro rata. If a policy is canceled at the request of the insured, compute the return premium at 90% of the pro rata unearned premium for the policy term, unless the named insured has another automobile policy remaining in force or the policy being canceled is replaced with another policy. Flat Cancellation will not be permitted. Refer to rate pages for cancellation table factors. ADDITIONAL COVERAGES AND ENDORSEMENTS Personal Injury Protection (PIP) All automobile liability insurance policies written on a private passenger motor vehicle must provide $2,500 Personal Injury Protection (PIP) unless rejected in writing by the named insured. Increased limits of $5,000 or $10,000 may be purchased. Personal Injury Protection benefits. For rates per vehicle, refer to rate pages. Medical Payment Coverage May be purchased with or without PIP coverage. Uninsured Motorist Coverage (includes Underinsured Motorist Coverage): Owners: This form of auto insurance must be afforded under every auto liability policy delivered or issued for delivery in Texas with respect to any motor vehicle registered or principally garaged in Texas, unless rejected in writing by the named insured. Required Limits the limits afforded must be equal to or less than the Bodily Injury Liability limits provided by the policy. Attach the Uninsured Motorist Coverage endorsement. For rates per vehicle, refer to rate pages. Towing and Labor: Coverages of $25, $50 and $75 per disablement are available for Towing and Labor costs incurred each time the covered auto is disabled. The labor must be performed at the place of disablement. For rates per vehicle, refer to rate pages. Additional Insured-Lessor: Liability coverage may be provided for Lessors as Additional Insured. Endorsement CPA-012 Leased Vehicles: When insuring a leased automobile, the vehicle must be insured in the Lessee name. 1. For Liability Coverage, the vehicle will be insured and rated the same as if the applicant were the owner. 2. For Physical Damage Coverages, the vehicle may be insured only if the applicant is responsible for damage to the vehicle (insurable interest). Rate will be the same as if the applicant were the owner. 10

15 Extended Non-Owned Liability Coverage: Coverage is available. For rates per vehicle, refer to rate pages. Endorsement CPA-042 Customized Vans and Customized Pickups: Stated Amount coverage for customizing equipment may be purchased for physical damage coverages. For customizing coverage to be applicable, the customized equipment must be reported to the company, the Stated Amount value established and the necessary endorsement attached to the policy. The customizing deductibles shall be the same as the vehicle deductibles and corresponding coverages are required on the vehicle. The Customized Van Questionnaire must be completed by the insured. Photos are required. Endorsement CPA-032. For rates per vehicle, refer to rate pages. Audio, Visual and Electronic Data Equipment Coverage: Coverage is available for electronic equipment that receives or transmits audio, visual or data signals such as: 1. Citizens band radios, 2. Telephones, 3. Two-way mobile radios, 4. Scanning monitor receivers, 5. Television monitor receivers, 6. Video cassette recorders, 7. Audio cassette recorders, or 8. Personal computers. For rates per vehicle, refer to rate pages. Coverage is included for accessories used with the above equipment. Electronic equipment which is specifically designed solely for the reproduction of sound and is (1) permanently installed in the auto, or (2) designed to be solely operated by use of the power from the auto s electrical system and the equipment is removable from a housing unit which is permanently installed in the auto at the time of loss, along with accessories used with such equipment, is automatically covered under the policy without additional premium charge. Coverage for radar and/or laser detectors is not available. This endorsement requires Other Than Collision coverage on the vehicle in which the equipment will be used. Endorsement CPA-031. Tapes, Records, Discs and Other Media Coverage: Coverage is available for Tapes, Records, Discs and Other Media equipment if at the time of loss they are contained in a vehicle described in the policy for which this coverage is provided. Other Than Collision coverage is required on the vehicle. Limit per vehicle is $200. Endorsement CPA-031. Pickup and Vans: When a pickup is used to transport a non-permanently attached camper body, or to transport a camper body or cover with no facilities for cooking and sleeping, use the same rating procedure as Customized Vans and Pickups. For rates per vehicle, refer to rate pages. Extended Transportation Expense: Coverage for Extended Transportation Expense is provided in the policy on a limited basis. Expanded coverage may be purchased. Endorsement CPA-040. For rates per vehicle, refer to rate pages. 11

16 MISCELLANEOUS PROGRAMS Recreational Trailers and Campers: Travel Trailers and Pull Type Campers equipped for recreational occupancy and designed to be towed by or carried on a private passenger automobile, pickup, or van may be insured for Other Than Collision and Collision coverages if we are insuring the pulling unit. A unit used as a permanent residence does not qualify for this program. Utility trailers, including horse trailers, and commercial type trailers do not qualify. Our limit of liability for physical damage coverage shall be the lesser of the actual cash value of the stolen or damaged property, the amount necessary to repair or replace the property or the stated amount. The serial number of the unit is required. A picture of the trailer/camper may be requested by underwriting. Use Class Code Endorsement CPA-030. For rates per trailer, refer to rate pages. Utility Trailers: Liability, PIP and Medical Payment Coverages: When private passenger autos, pickups and vans are insured with our company for liability, PIP and medical payment coverages under a Personal Auto Policy, these coverages automatically extend to any trailer designed for use with such vehicles, without an additional premium charge and without a specific description of the trailer. Coverage is not provided for a trailer when: 1. Used for business purposes with other than a private passenger auto, or owned pickup or van; 2. When no auto is owned by the insured. Physical Damage Coverage: Trailers are to be insured as separate items with separate premiums shown for each unit. The deductible applies separately to each unit. Serial number of the unit must be provided. No homemade units will be accepted. The new cost should not exceed $20,000. Attach the Coverage for Damage to Your Auto endorsement-cpa-030. Note: Coverage is not provided on an agreed value basis. A picture of the trailer may be requested by underwriting. Use Class Code For rates per trailer, refer to rate pages. 12

17 Classic Cars: A classic auto is a motor vehicle of the private passenger type, excluding vans, which is 10 years old, but not more than 25 years old and is used on a regular basis. Consideration may be made on vehicles over 25 years old and must be submitted prior to binding. Its value is significantly higher than the average value of other autos of the same make and model year. Supporting private passenger auto business with physical damage coverage is required. Endorsement CPA-030. Photographs of the vehicle are required and coverage is not applicable for drivers under 25. Classic cars we have insured that attain the age of 26 model years will not be changed solely due to age. It is easy to establish inflated values for classic type vehicles. The stated amount will receive careful review by underwriting prior to acceptance. For rates per vehicle, refer to rate pages. Antique Cars: An antique auto is a private passenger type vehicle which is 25 or more years old. They may be insured on a stated amount basis only. This coverage may be written if the vehicle is used for limited use only, such as parades and shows. Only vehicles with historical license plates will be accepted. Supporting private passenger auto business with physical damage coverage is required. Endorsement CPA-030. For rates per vehicle, refer to rate pages. Optional deductibles are not available. Our limit of liability for physical damage coverage shall be the lesser of the actual cash value of the stolen or damaged property, the amount necessary to repair or replace the property, or the stated amount limit. Photographs of the vehicle are required and coverage is not applicable for drivers under 25. For rates per vehicle, refer to rate pages. 13

18 CORNERSTONE NATIONAL INSURANCE COMPANY Texas Automobile Program Rates and Procedures, Section II PREMIUM DETERMINATION 1. Determine the appropriate rating territory based on the garaging location of the vehicle being insured. 2. Apply the appropriate insurance credit score factor. 3. Determine the base premium(s) for the coverage limits desired. 4. When Physical Damage coverages are written: a. Determine the appropriate cost symbol from the ISO Symbol Section. If the Symbol Section does not display a rating symbol for the current or prior model year version of the same vehicle, assign an interim symbol based on the cost new of the auto, using the Price/Symbol chart located in the reference pages of the ISO Symbol Section. b. Select the base premiums according to the appropriate cost symbol and vehicle model year/age group. When base premiums from a model year are not displayed in the base premium pages, use the base premium shown for the latest model year. 5. When liability and PIP/ Medical Coverages are selected: Determine the appropriate symbol from the ISO liability and PIP/MP vehicle rating plan to establish proper rate factors for selected coverages. When the insured vehicle is not included in vehicle rating plan a neutral 1.0 factor will apply. 6. Determine the proper Primary Classification and Rating Factor. 7. Determine the proper Secondary Classification and Rating Factor from Table II. a. Single b. Multi-Car Risk 8. Add or Subtract (if applicable) the appropriate factors to the risk from Premium Adjustment Program section. The credit and/or surcharges will apply to Liability, Medical Payments, PIP, and Collision. 9. Apply the appropriate classification rating factor separately to the base premium for Liability, Medical Payments, PIP, Other Than Collision and Collision coverages. 10. Apply the appropriate discount for policies paid in full. *Rating worksheet may be seen on page Apply the appropriate expense constant. The expense constant will apply to Liability, Other Than Collision, and Collision. *All indicated premiums are semi-annual. Term Factor =

19 Texas Rating Procedures Miscellaneous Coverages--Add each Base Premium to Subtotal D ISO BI PD MP PIP OTC COLL UMCSL UMBI UIMPD MEDIA TL ETE AVE MEDIA SR-22 Ext. N/O step 1: Base Prem step 2: Credit Factor X step 3: Limit Factor X A Subtotal step 4: Sym/Model Yr FactX step 5: Deductible FactorX B Subtotal step 6: Class Factor step 7: Secondary Factor - step 8: PAF + step 9: Inexperienced Oper + Claim Free Disc. - Transfer Disc. Homeowners Credit - Good Student Disc - Lapse Surcharge + Course/Sr. Disc. - Factor Subtotal X C Subtotal step10: Paid in Full Disc. X step11: Transfer/Renewal Discount X D Subtotal step12: Expense Constant + E Subtotal step13: Policy Term FactorX step14: Rate Cap Factor X F Subtotal E VehicleGrand Total Premiums are rounded at subtotal A, B, C & E. Premium involving $.50 or more shall be rounded to the next higher whole dollar. 15

20 CLASSIFICATION DETERMINATION Private Passenger automobiles owned by an individual or a corporation or owned jointly by two or more relatives who are residents in the same household shall be classified as follows: 1. Primary Classification a. Classify the automobile according to age, sex, and marital status of the operators and the use of the automobile and determine the applicable factor by using the Primary Factor Table I contained in the Rates and Procedures Section II. b. If the automobile is owned by a corporation, classify the automobile as Business Use, except for Farm Use as described on page Secondary Classification a. Determine whether the automobile is a Single Car or part of a Multi Car Risk. b. Determine the appropriate Factor to be added to or subtracted from the Primary Rating Factor, as contained in the Rates and Procedures Section II. 3. Premium Adjustment Program (Debits & Credits) a. Determine if the account is to receive any credits and/or surcharges from Premium Adjustment Program. See Rates and Procedures. b. Apply the credit/surcharge factor to the factors from the Primary and Secondary Factor Tables I and II. 4. Changes in Classification a. Primary Classification-Changes in classification, including addition or deletion of an operator, during the term of a policy shall be computed pro-rata. However, no policy shall be changed in term to effect a change of classification as a result of the attained age of an operator of the automobile. 16

21 RATE FACTORS AND STATISTICAL CODE TABLE I Private Passenger Automobile Manual Primary Classification No Youthful Operator Principal Operator Age 75 or Over Principal Operator Age Principal Operator Age Principal Operator Age Principal Operator Age All Other Operators Age Pleasure Drive to or From Work Business Farm Use Less than 15 Miles 15 or More Miles Use Use Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor

22 Primary Classification Without Driver Training With Driver Training With or Without Driver Training Youthful Operator UNMARRIED FEMALE Age Not Owner or Principal Operator Owner or Operator Pleasure or Farm Use Drive to Work or Business Use Pleasure or Farm Use Drive to Work or Business Use Code BI Factor PD Factor or PIP/MP Factor Less OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor or PIP/MP Factor Less OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor

23 Primary Classification Without Driver Training Driver Training With or Without Driver Training Youthful Operator UNMARRIED MALE Not Owner or Principal Operator Owner or Operator Age Pleasure or Farm Use Drive to Work or Business Use Pleasure or Farm Use Drive to Work or Business Use Code BI Factor PD Factor or PIP/MP Factor Less OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor or PIP/MP Factor Less OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor

24 Primary Classification Without Driver Training With Driver Training With or Without Driver Training Youthful Operator MARRIED MALE Age Pleasure or Farm Use Drive to Work or Business Use Code BI Factor PD Factor orpip/mp Factor LessOTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor orpip/mp Factor LessOTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor

25 Primary Classification Without Driver Training With Driver Training With or Without Driver Training Youthful Operator MARRIED FEMALE Age Pleasure/Farm Business/Work Use Code BI Factor PD Factor orpip/mp Factor LessOTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor orpip/mp Factor LessOTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor Code BI Factor PD Factor PIP/MP Factor OTC Factor COLL Factor

26 RATE FACTORS AND STATISTICAL CODE-TABLE II Private Passenger Automobile Manual The Rating Factors applicable to the Vehicle Type. Single or Multi Car Risks shall be determined by the addition, or subtraction, of the appropriate Factor from the applicable table below to the Primary Rating Factor. Secondary Classification Vehicle Type Sub-Class SINGLE CAR All Performances Factor 0.00 Code* 10 MULTI CAR All Performances Factor -.20 Code* 20 *These two digits are to be appended to the four-digit code corresponding to the Primary Rating Factor to which the Factor in this table is added or subtracted. 22

27 POLICY DISCOUNTS Driver Training Credit Credit may be allowed for youthful operators under 21 years of age who have completed an approved Driver Training Course. The applicable With Drivers Training Rating Factor and Statistical Code shall apply. Homeowners Policy Credit A minus.05 discount factor may be applied to policies when the Named Insured(s) own(s) a home and live(s) in the home. Home is defined as a house, condominium, townhouse or mobile home when used as a primary residence. The discount is not available to minors whose parents are homeowners, unless the parents are insured under the same policy and have a vehicle scheduled on the policy. Proof of home ownership may be requested with the application in order to qualify for the discount. Examples of proof include the declarations page of the Homeowner policy, title, tax bill, etc. An affidavit from the insured stating they own a home will also be accepted. Other documentation may be required to verify that the home is an eligible structure. Discount applies to Liability, Medical Payments, PIP, OTC and Collision coverages. Transfer Discount: Prior to January 15, 2012, when a policy is being rewritten from an auto company, a minus.05 factor transfer discount will be applied to Liability, Medical Payments, PIP, OTC and Collision coverages. Proof of prior insurance must be submitted with the application and maintained with the agent. Claim Free Discount: A minus.10 discount factor is provided to the applicant or existing policy if the insured drivers do not have any at-fault accident payments made on the insured behalf, within the three (3) year rating period. The discount is applied to Liability, PD, MP, PIP, Collision and OTC coverage lines. Good Student Discount The discount will be a minus.15 factor and will be applied to Liability, PIP, Medical Payments, OTC and Collision coverage. The discount will no longer apply once the eligible operator turns 25 or has had a at-fault accident. If the eligible operator is removed from the policy, the discount will be deleted. Periodic recertification of the Good Student Discount may be required. Driver Improvement Course Discount A 10% Driver Improvement Course Discount applies to the premium for Bodily Injury and Property Damage Liability, PIP, and Collision Coverages provided: a. The auto is classified and rated as private passenger auto; and b. The principal operator of the auto has a completion certificate, dated within the most recent 36 months, certifying successful completion of an Driver Improvement course meeting the criteria established by the State of Texas. The Discount shall apply: a. To new and renewal policies with inception dates within the 36-month period following the course completion date. b. Only to that vehicle principally operated by the eligible person. c. Only once to each such auto regardless of the number of operators with course completion certificates. This discount does not apply if the applicant has taken the course as a result of a court order. Transfer/Policy Renewal Discount If a policy has been in force for at least one year with either the prior insurance company with a lapse no greater than 30 days or Cornerstone, a discount will apply to all coverages. Refer to the Transfer/Renewal Discount table for the factor. 23

28 ADDITIONAL COVERAGES AND ENDORSEMENTS All premiums are semi-annual. Towing and Labor: Coverages of $25, $50 and $75 per disablement are available for Towing and Labor costs incurred each time the covered auto is disabled. The labor must be performed at the place of disablement. Limit Premium $25 $3.95 $50 $5.93 $75 $7.90 Extended Non-Owned Liability Coverage Premium $10 per vehicle Customized Vans and Customized Pickups: Stated Amount coverage for customizing equipment may be purchased for physical damage coverages. For customizing coverage to be applicable, the customized equipment must be reported to the company, the Stated Amount value established and the necessary endorsement attached to the policy. The customizing deductibles shall be the same as the vehicle deductibles and corresponding coverages are required on the vehicle. The Customized Van Questionnaire must be completed by the insured. Photos are required. Endorsement CPA-032. Rating: Determine the appropriate symbol for the van or pickup by referring to the ISO Symbol and Identification pages. After establishing the appropriate ISO symbol, use the following procedure for rating the customized equipment. Use the increased symbol to rate the Physical Damage coverage. The increased symbol includes the charge for the customized equipment. Amount of Coverage Increase Symbol $ 0-1, ,501-2, ,501-3, ,501-4, ,501-5, ,501-6, ,501-7, ,501-8, ,501-9,500 9 Symbols will continue to increase by 1 for each $1,000. Note: Since there is no ISO Symbol 9, if the Symbol computes to a 9, change it to a Symbol

29 Audio, Visual and Electronic Data Equipment Coverage: Coverage is available for electronic equipment that receives or transmits audio, visual or data signals such as: 1. Citizens band radios, 2. Telephones, 3. Two-way mobile radios, 4. Scanning monitor receivers, 5. Television monitor receivers, 6. Video cassette recorders, 7. Audio cassette recorders, or 8. Personal computers. Coverage is included for accessories used with the above equipment. Electronic equipment which is specifically designed solely for the reproduction of sound and is (1) permanently installed in the auto, or (2) designed to be solely operated by use of the power from the auto s electrical system and the equipment is removable from a housing unit which is permanently installed in the auto at the time of loss, along with accessories used with such equipment, is automatically covered under the policy without additional premium charge. Coverage for radar and/or laser detectors is not available. This endorsement requires Other Than Collision coverage on the vehicle in which the equipment will be used. Endorsement CPA-031. Premium rating from the table below: Limit Per Unit 6-Month Premium $ $ , ,001-1, ,501-2, ,001-2, ,501-3, ,001-3, ,501-4,000 4,001-4,500 4,501-5, Multi-car and other discounts & surcharges are not applicable. 25

30 Tapes, Records, Discs and Other Media Coverage: Coverage is available for Tapes, Records, Discs and Other Media equipment if at the time of loss they are contained in a vehicle described in the policy for which this coverage is provided. Other Than Collision coverage is required on the vehicle. Limit per vehicle is $200 and the six (6) month premium is $10 per auto. Endorsement CPA-031. Extended Transportation Expense: Coverage for Extended Transportation Expense is provided in the policy on a limited basis. Endorsement CPA-040 Extended Transportation Expense Options: Coverage and rates are: Day/Maximum Premium $30/$900 $14.22 $40/$1,200 $28.44 $50/$1,500 $42.65 Age of Vehicles: In determining the age of vehicles, use the following: Age Group Definition 1 Autos of current model year* 2 Autos of first preceding year 3 Autos of second preceding year 4 Autos of third preceding year 5 Autos of fourth preceding year 6 All Other Autos * The current model year as used in this section, changes effective October 1 of each calendar year regardless of the actual introduction of the makes and models. 26

31 MISCELLANEOUS PROGRAMS Recreational Trailers and Campers: Travel Trailers and Pull Type Campers equipped for recreational occupancy and designed to be towed by or carried on a private passenger automobile, pickup, or van may be insured for Other Than Collision and Collision coverages if we are insuring the pulling unit. A unit used as a permanent residence does not qualify for this program. Utility trailers, including horse trailers, and commercial type trailers do not qualify. Our limit of liability for physical damage coverage shall be the lesser of the actual cash value of the stolen or damaged property, the amount necessary to repair or replace the property or the stated amount. The serial number of the unit is required. A picture of the trailer/camper may be requested by underwriting. Rates are six month premiums. There will be a $25.00 minimum written premium that will apply. Use Class Code Endorsement CPA-030. Rate as follows: Other Than Collision per $1,000 Deductibles Stated Amount $100 $200 $250 $500 $1,000 $0-$50, Collision per $1,000 Deductibles Stated Amount $100 $200 $250 $500 $1,000 $0-$50, Rating Procedure: Multiply the Stated Amount by the deductible coverage and round premium to nearest whole number. Example: Camper stated value of $18,000 with $100 deductible for Other Than Collision, $250 deductible of Collision. OTC:18 x 4.03 = $75.54, rounded to premium $76.00 COLL:18 x 3.15=$56.70, rounded to premium Total six month premium $ Note: Multi car and other discounts are not applicable in the Recreational Trailer and Camper Program. 27

32 Utility Trailers: Liability, PIP and Medical Payment Coverages: When private passenger autos, pickups and vans are insured with our company for liability, PIP and medical payment coverages under a Personal Auto Policy, these coverages automatically extend to any trailer designed for use with such vehicles, without an additional premium charge and without a specific description of the trailer. Coverage is not provided for a trailer when: 1. Used for business purposes with other than a private passenger auto or owned pickup or van; 2. When no auto is owned by the insured. Physical Damage Coverage: Trailers are to be insured as separate items with separate premiums shown for each unit. The deductible applies separately to each unit. Serial number of the unit must be provided. No homemade units will be accepted. The new cost should not exceed $20,000. Attach the Coverage for Damage to Your Auto endorsement-cpa-030. Note: Coverage is not provided on an agreed value basis. A picture of the trailer may be requested by underwriting. Rates are six month premiums. There will be a $25.00 minimum written premium that will apply. Use Class Code Endorsement CPA-030. Rate as follows: Other Than Collision per $1,000 Deductibles ACV Amount $100 $200 $250 $500 $1,000 $0-$20, Collision per $1,000 Deductibles ACV Amount $100 $200 $250 $500 $1,000 $0-$20,

33 Classic Cars: A classic auto is a motor vehicle of the private passenger type, excluding vans, which is 10 years old, but not more than 25 years old and is used on a regular basis. Consideration may be made on vehicles over 25 years old and must be submitted prior to binding. Its value is significantly higher than the average value of other autos of the same make and model year. Supporting private passenger auto business with physical damage coverage is required. Endorsement CPA-030. Rating Procedure: 1. For Bodily Injury, Property Damage, Medical Payments, PIP and Uninsured Motorist coverages, classify and rate as a private passenger auto. 2. For Physical Damage coverages: a. An agreeable stated amount must be established prior to policy issue; b. Assign a symbol based on the stated amount from the Symbols For Cost New Pickups Rated As Private Passenger Cars on Page 18. c. Classify and rate as a private passenger auto using the base rate for the current model year. Photographs of the vehicle are required and coverage is not applicable for drivers under 25. Classic cars we have insured that attain the age of 26 model years will not be changed solely due to age. It is easy to establish inflated values for classic type vehicles. The stated amount will receive careful review by underwriting prior to acceptance. Note: Multi car and other discounts are not applicable in the Classic Car Program. Antique Cars: An antique auto is a private passenger type vehicle which is 25 or more years old. They may be insured on a stated amount basis only. This coverage may be written if the vehicle is used for limited use only, such as parades and shows. Only vehicles with historical license plates will be accepted. Supporting private passenger auto business with physical damage coverage is required. Endorsement CPA-030. Rating Procedure: 1. The premium for liability coverage is 50% of the applicable territory base rate. Liability coverage may not be written without physical damage. 2. The six month physical damage rates are: Other Than Collision Rate per $100 of Coverage $ 250 Deductible Deductible.50 Collision $ 250 Deductible Deductible.50 Optional deductibles are not available. Our limit of liability for physical damage coverage shall be the lesser of the actual cash value of the stolen or damaged property, the amount necessary to repair or 29

34 replace the property, or the stated amount limit. Photographs of the vehicle are required and coverage is not applicable for drivers under 25. Note: Multi car and other discounts are not applicable in the Antique Car Program. SYMBOLS FOR PICKUPS RATED AS PRIVATE PASSENGER CARS Use these symbols for cars and pickups when no symbol is shown in the symbol and identification pages and the classic car rating procedures. Symbol-1989 And Prior Cost New Symbol-1990 and After (Classic Vehicles Only) 4 $ 2,751-3, ,701-5, ,001-6, ,501-8, ,001-9, ,001-10, ,001-11, ,251-12, ,501-13, ,751-15, ,001-16, ,251-17, ,501-18, ,751-20, ,001-22, ,001-24, ,001-26, ,001-28, ,001-30, ,001-33, ,001-36, ,001-40, ,001-45, Note: Refer to the Company for Symbols above

35 PRO RATA CANCELLATION TABLE Day of Month January February March April May June Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio

36 Day of Month PRO RATA CANCELLATION TABLE July August September October November December Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio Day of Month Day of Year Ratio

37 THIS PAGE INTENTIONALLY LEFT BLANK. 33

38 PERSONAL VEHICLE MANUAL TERRITORY PAGES Territory Code ANDERSON ANDREWS ANGELINA ARANSAS ARCHER ARMSTRONG ATASCOSA AUSTIN BAILEY BANDERA BASTROP BAYLOR BEE BELL BEXAR BLANCO BORDEN BOSQUE BOWIE BRAZORIA BRAZOS BREWSTER BRISCOE BROOKS BROWN BURLESON BURNET CALDWELL CALHOUN CALLAHAN CAMERON CAMP CARSON CASS CASTRO CHAMBERS CHEROKEE CHILDRESS CLAY COCHRAN COKE COLEMAN COLLIN COLLINGSWORTH COLORADO COMAL COMANCHE CONCHO COOKE CORYELL COTTLE CRANE CROCKETT CROSBY CULBERSON DALLAM DALLAS Territory Code DAWSON DEAF SMITH DELTA DENTON DEWITT DICKENS DIMMIT DONLEY DUVAL EASTLAND ECTOR EDWARDS ELLIS EL PASO ERATH FALLS FANNIN FAYETTE FISHER FLOYD FOARD FORT BEND FRANKLIN FREESTONE FRIO GAINES GALVESTON GARZA GILLESPIE GLASSCOCK GOLIAD GONZALES GRAY GRAYSON GREGG GRIMES GUADALUPE HALE HALL HAMILTON HANSFORD HARDEMAN HARDIN HARRIS HARRISON HARTLEY HASKELL HAYS HEMPHILL HENDERSON HIDALGO HILL HOCKLEY HOOD HOPKINS HOUSTON HOWARD

39 Territory Code HUDSPETH HUNT HUTCHINSON IRION JACK JACKSON JASPER JEFF DAVIS JEFFERSON JIM HOGG JIM WELLS JOHNSON JONES KARNES KAUFMAN KENDALL KENEDY KENT KERR KIMBLE KING KINNEY KLEBERG KNOX LAMAR LAMB LAMPASAS LA SALLE LAVACA LEE LEON LIBERTY LIMESTONE LIPSCOMB LIVE OAK LLANO LOVING LUBBOCK LYNN MCCULLOCH MCLENNAN MCMULLEN MADISON MARION MARTIN MASON MATAGORDA MAVERICK MEDINA MENARD MIDLAND MILAM MILLS MITCHELL MONTAGUE MONTGOMERY Territory Code MOORE MORRIS MOTLEY NACOGDOCHES NAVARRO NEWTON NOLAN NUECES OCHILTREE OLDHAM ORANGE PALO PINTO PANOLA PARKER PARMER PECOS POLK POTTER PRESIDIO RAINS RANDALL REAGAN REAL RED RIVER REEVES REFUGIO ROBERTS ROBERTSON ROCKWALL RUNNELS RUSK SABINE SAN AUGUSTINE SAN JACINTO SAN PATRICIO SAN SABA SCHLEICHER SCURRY SHACKELFORD SHELBY SHERMAN SMITH SOMERVELL STARR STEPHENS STERLING STONEWALL SUTTON SWISHER TARRANT TAYLOR TERRELL TERRY THROCKMORTON TITUS TOM GREEN

40 Territory Code TRAVIS TRINITY TYLER UPSHUR UPTON UVALDE VAL VERDE VAN ZANDT VICTORIA WALKER WALLER WARD WASHINGTON WEBB Territory Code WHARTON WHEELER WICHITA WILBARGER WILLACY WILLIAMSON WILSON WINKLER WISE WOOD YOAKUM YOUNG ZAPATA ZAVALA

41 LIST OF IMPORTANT CITIES AND TOWNS The following list contains all the more important cities, towns, boroughs and villages in the state together with their counties and territory and code assignments. In the event the city or town is located in more than one county, the actual county of principal garaging determines the territory. Territory City and County Code A Abilene, Taylor Alamo, Hidalgo Alamo Heights, Bexar Albany, Shackelford Alice, Jim Wells Alpine, Brewster Alto, Cherokee Alvarado, Johnson Alvin, Brazoria Amarillo, Potter-Randall Anahuac, Chambers Andrews, Andrews Angleton, Brazoria Anson, Jones Anthony, El Paso Aransas Pass, San Patricio- Aransas Archer City, Archer Arlington, Tarrant Asherton, Dimmit Aspermont, Stonewall Athens, Henderson Atlanta, Cass Austin, Travis B Baird, Callahan Balch Springs, Dallas Ballinger, Runnels Bandera, Bandera Bastrop, Bastrop Bay City, Matagorda Baytown, Harris Beaumont, Jefferson Beeville, Bee Bellaire, Harris Bellmead, McLennan Bellville, Austin Belton, Bell Territory City and County Code B Benavides, Duval Big Lake, Reagan Big Spring, Howard Big Wells, Dimmit Bishop, Nueces Boerne, Kendall Bonham, Fannin Borger, Hutchinson Bowie, Montague Brackettville, Kinney Brady, McCulloch Breckenridge, Stephens Bremond, Robertson Brenham, Washington Bridge City, Orange Bridgeport, Wise Bronte, Coke Brookshire, Waller Brownfield, Terry Brownsville, Cameron Brownwood, Brown Brownwood-Oakland, Orange Bryan, Brazos Bunavista, Hutchinson Burkburnett, Wichita Burnet, Burnet C Caldwell, Burleson Calvert, Robertson Camden, Polk Cameron, Milam Canadian, Hemphill Canutillo, El Paso Canyon, Randall Carrizo Springs, Dimmit Carrollton, Dallas Carthage, Panola Territory City and County Code C Cedar Bayou-Stewart Heights, Harris Celina, Collin Center, Shelby Charlotte, Atascosa Childress, Childress Chillicothe, Hardeman Cisco, Eastland Clarendon, Donley Clarksville, Red River Cleburne, Johnson Cleveland, Liberty Clifton, Bosque Clute, Brazoria Cockrell Hill, Dallas Coleman, Coleman College Station, Brazos Colorado City, Mitchell Columbus, Colorado Comanche, Comanche Comfort, Kendall Commerce, Hunt Conroe, Montgomery Coolidge, Limestone Cooper, Delta Copperas Cove, Coryell Corpus Christi, Nueces Corrigan, Polk Corsicana, Navarro Cotulla, La Salle Crane, Crane Crockett, Houston Crosbyton, Crosby Cross Plains, Callahan Crowell, Foard Crystal City, Zavala Cuero, DeWitt

42 Territory City and County Code D Daingerfield, Morris Daisetta, Liberty Dalhart, Dallam-Hartley Dallas, Dallas Dawson, Navarro Dayton, Liberty Decatur, Wise De Kalb, Bowie De Leon, Comanche Del Rio, Val Verde Denison, Grayson Denton, Denton Denver City, Yoakum Devine, Medina Diboll, Angelina Dickinson, Galveston Dilley, Frio Dimmitt, Castro Donna, Hidalgo Donnybrook Place, Harris Dublin, Erath Dumas, Moore E Eagle Lake, Colorado Eagle Pass, Maverick Eastland, Eastland Edcouch, Hidalgo Eden, Concho Edinburg, Hidalgo Edna, Jackson El Campo, Wharton Eldorado, Schleicher Electra, Wichita Elgin, Bastrop El Paso, El Paso Elsa, Hidalgo Ennis, Ellis Euless, Tarrant F Fabens, El Paso Fairfield, Freestone Falfurrias, Brooks Territory City and County Code F Farmersville, Collin Farwell, Parmer Ferguson, Victoria Ferris, Ellis Flatonia, Fayette Floresville, Wilson Floydada, Floyd Forest Hill, Tarrant Forney, Kaufman Fort Davis, Jeff Davis Fort Stockton, Pecos Fort Worth, Tarrant Franklin, Robertson Frankston, Anderson Fredericksburg, Gillespie Freeport, Brazoria Freer, Duval Friona, Parmer G Gainesville, Cooke Galena Park, Harris Galveston, Galveston Ganado, Jackson Garland, Dallas Gatesville, Coryell Georgetown, Williamson George West, Live Oak Giddings, Lee Gilmer, Upshur Gilmer, Orange Gladewater, Gregg-Upshur Glen Rose, Somervell Goldthwaite, Mills Goliad, Goliad Gonzales, Gonzales Gorman, Eastland Graham, Young Granbury, Hood Grand Prairie, Dallas Grand Saline, Van Zandt Granger, Williamson Territory City and County Code G Grapeland, Houston Grapevine, Tarrant Greenville, Hunt Greggton, Gregg Griffing Park, Jefferson Groesbeck, Limestone Groves, Jefferson Grulla, Starr Gulf Park, Brazoria H Hale Center, Hale Hallettsville, Lavaca Haltom City, Tarrant Hamilton, Hamilton Hamlin, Jones-Fisher Handley, Tarrant Harlingen, Cameron Haskell, Haskell Hearne, Robertson Hebbronville, Jim Hogg Hempstead, Waller Henderson, Rusk Henrietta, Clay Hereford, Deaf Smith Hico, Hamilton Highland Park, Dallas Highlands, Harris Hillcrest, Wichita Hillsboro, Hill Hitchcock, Galveston Holliday, Archer Hondo, Medina Honey Grove, Fannin Hooks, Bowie Houston, Harris Hubbard, Hill Hughes Springs, Cass Hull, Liberty Humble, Harris Huntington, Angelina Huntsville, Walker Hurst, Tarrant

43 Territory City and County Code I Idalou, Lubbock Ingleside, San Patricio Iowa Park, Wichita Iraan, Pecos Irving, Dallas Italy, Ellis Itasca, Hill J Jacinto City, Harris Jacksboro, Jack Jacksonville, Cherokee Jasper, Jasper Jefferson, Marion Jones Creek, Brazoria Jourdanton, Atascosa Junction, Kimble K Karnes City, Karnes Kaufman, Kaufman Keltys, Angelina Kemp Newby, Wichita Kenedy, Karnes Kennedale, Tarrant Keres, Navarro Kermit, Winkler Kerrville, Kerr Kilgore, Gregg-Rusk Killeen, Bell Kingsville, Kleberg Kirbyville, Jasper Knox City, Knox Kountze, Hardin L Ladonia, Fannin La Feria, Cameron La Grange, Fayette Lake Jackson, Brazoria Lakeview, Jefferson Lake Worth Village, Tarrant La Marque, Galveston Territory City and County Code L Lamesa, Dawson Lampasas, Lampasas Lancaster, Dallas La Porte, Harris Laredo, Webb League City, Galveston Leonard, Fannin Levelland, Hockley Lewisville, Denton Liberty, Liberty Lindale, Smith Linden, Cass Littlefield, Lamb Livingston, Polk Llano, Llano Lockhart, Caldwell Lockney, Floyd Lone Star, Morris Longview, Gregg Loraine, Mitchell Los Fresnos, Cameron Lubbock, Lubbock Lufkin, Angelina Luling, Caldwell Lyford, Willacy M McAllen, Hidalgo McCamey, Upton McGregor, McLennan McKinney, Collin McLean, Gray McNair, Harris Madisonville, Madison Malakoff, Henderson Marble Falls, Burnet Marfa, Presidio Marlin, Falls Marshall, Harrision Mart, McLennan Mason, Mason Matador, Motley Mathis, San Patricio Territory City and County Code M Memphis, Hall Menard, Menard Mercedes, Hidalgo Meridian, Bosque Merkel, Taylor Mesquite, Dallas Mexia, Limestone Midland, Midland Midlothian, Ellis Mills, Grayson Mineola, Wood Mineral Wells, Palo Pinto Mission, Hidalgo Monahans, Ward Moody, McLennan Morton, Cochran Mount Pleasant, Titus Mount Vernon, Franklin Muleshoe, Bailey Munday, Knox N Nacogdoches, Nacogdoches Naples, Morris Navasota, Grimes Nederland, Jefferson New Boston, Bowie New Braunfels, Comal Newgulf, Wharton Nixon, Gonzales Nocona, Montague North Park, Taylor O Odem, San Patricio Odessa, Ector O'Donnell, Lynn-Dawson Olmos Park, Bexar Olney, Young Olton, Lamb Orange, Orange Overton, Rusk Ozona, Crockett

44 Territory City and County Code P Paducah, Cottle Palacios, Matagroda Palestine, Anderson Pampa, Gray Panhandle, Carson Paris, Lamar Pasadena, Harris Pear Ridge, Jefferson Pearsall, Frio Pecos, Reeves Perryton, Ochiltree Pharr, Hidalgo Phillips, Hutchinson Pilot Point, Denton Pineland, Sabine Pittsburg, Camp Plainview, Hale Plano, Collin Pleasant Grove, Dallas Pleasant Valley, Potter Pleasanton, Atascosa Port Arthur, Jefferson Port Isabel, Cameron Portland, San Patricio Port Lavaca, Calhoun Port Neches, Jefferson Post, Garza Poteet, Atascosa Poth, Wilson Premont, Jim Wells Q Quanah, Hardeman R Rolls, Crosby Ramona, Hidalgo Ranger, Eastland Rankin, Upton Raymondville, Willacy Red Cut Heights, Bowie Refugio, Refugio Territory City and County Code R Richardson, Dallas Richmond, Fort Bend Rio Grande City, Starr Rio Hondo, Cameron Rising Star, Eastland River Oaks, Tarrant Robert Lee, Coke Robstown, Nueces Roby, Fisher Rockdale, Milam Rockport, Aransas Rocksprings, Edwards Rockwall, Rockwall Roma-Los Saenz, Starr Roscoe, Nolan Rosebud, Falls Rosenberg, Fort Bend Rotan, Fisher Round Rock, Williamson Royse City, Collin-Rockwall Rule, Haskell Runge, Karnes Rusk, Cherokee S Sabinal, Uvalde Saint Jo, Montague San Angelo, Tom Green San Antonio, Bexar San Augustine, San Augustine 063 San Benito, Cameron Sanderson, Terrell Sanger, Denton San Juan, Hidalgo San Marcos, Hays San Pedro, Nueces San Saba, San Saba Sansom Park Village, Tarrant Santa Anna, Coleman Schulenburg, Fayette Territory City and County Code S Seagoville, Dallas Seagraves, Gaines Sealy, Austin Seguin, Guadalupe Seminole, Gaines Seth Ward, Hale Seymour, Baylor Shamrock, Wheeler Shell Camp, Gregg Sherman, Grayson Shiner, Lavaca Silsbee, Hardin Sinton, San Patricio Slaton, Lubbock Smithville, Bastrop Snyder, Scurry Somerville, Burleson Sonora, Sutton Sourlake, Hardin South Houston, Harris South Side Place, Harris Spearman, Hansford Spooner, Orange Spur, Dickens Stamford, Jones Stanton, Martin Stephenville, Erath Stinnett, Hutchinson Stockdale, Wilson Stratford, Sherman Sudan, Lamb Sugar Land, Fort Bend Sulphur Springs, Hopkins Sundown, Hockley Sunnydale, Dallas Sunray, Moore Sunrise, Falls Sweeny, Brazoria Sweetwater, Nolan

45 Territory City and County Code T Taft, San Patricio Tahoka, Lynn Taylor, Williamson Teague, Freestone Temple, Bell Terrell, Kaufman Terrell Hills, Bexar Texarkana, Bowie Texas City, Galveston Three Rivers, Live Oak Throckmorton, Throckmorton Timpson, Shelby Tomball, Harris Trinity, Trinity Tulia, Swisher Turkey, Hall Tyler, Smith U University Park, Dallas Uvalde, Uvalde Territory City and County Code V Valley Mills, Bosque Van Alstyne, Grayson Van Horn, Culberson Velasco, Brazoria Vernon, Wilbarger Vickery, Dallas Victoria, Victoria Vidor, Orange W Waco, McLennan Waelder, Gonzales Wake Village, Bowie Waxahachie, Ellis Weatherford, Parker Weimar, Colorado Wellington, Collingsworth Weslaco, Hidalgo West, McLennan West Columbia, Brazoria West Orange, Orange West University Place, Harris Territory City and County Code W Wharton, Wharton Whitesboro, Grayson White Settlement, Tarrant Whitewright, Grayson Whitney, Hill Wichita Falls, Wichita Willis, Montgomery Wills Point, Van Zandt Wink, Winkler Winnsboro, Wood-Franklin Winter, Runnels Wolfe City, Hunt Woodsboro, Refugio Woodville, Tyler Wortham, Freestone Wylie, Collin Y Yoakum, Lavaca-DeWitt Yorktown, DeWitt Ysleta, El Paso Z Zapata, Zapata

46 PREMIUM ADJUSTMENT PROGRAM Summary of credit/surcharge factors as applied to the rate process for the State of Texas. The purpose of the Premium Adjustment Program (PAP) is to adjust the premiums in accordance to the risk associated with the account. The premiums shown on the base rate pages are preferred rates that are to be manipulated by the following surcharges and credits to determine the proper rate for each driver. The base premiums will be adjusted based on a three (3) year driving record. ELIGIBILITY AND QUALIFICATIONS The qualifications to determine acceptance into the private passenger automobile program is determined by the Non-Insurable and Non-Binding listed circumstances as listed within these guidelines. In addition, the limits of liability that may be bound varies with the number of at-fault accidents and or violation convictions charged to each driver. The greater the number of at-fault accidents and violation convictions, the lower the accepted limits as listed below: Binding Limit Restrictions Drivers age 24 and under may not be insured if they have any major violations. Do not bind limits of the following: Drivers age 25 and greater. Do Not Exceed: 100/300/100 limits if any driver has more than one (1) at-fault accident and or one minor violation. Do Not Exceed: 50/100/50 limits if any driver has more than one (1) at-fault accident and or two minor violations. Do Not Exceed: 30/60/25 limits if any driver has more than one (1) major violation conviction. A person with a major violation and a chargeable accident are not permitted. 42

47 Drivers age 21 to 24. Do Not Exceed: 100/300/100 limits if any driver has more than one (1) at-fault accident and or one minor violation, but not both, accident and violations. Do Not Exceed: 50/100/50 limits if any driver has more than one (1) at-fault accident and or two minor violations, but not both, accident and violations. May have (1) at-fault and 1 minor violation. Do Not Exceed: 30/60/25 limits if any driver has more than one (1) at-fault accident and or two minor violations. Drivers age 20 and under. We must have supporting parental business to be eligible for coverage. Applicant must be employed or a full time student. Do Not Exceed: 100/300/100 limits unless all drivers are free of at-fault accidents and violations Do Not Exceed: 50/100/50 limits if any driver has more than one (1) at-fault accident and or one minor violations, but not both, accident and violations. Do Not Exceed: 30/60/25 limits if any driver has more than one (1) at-fault accident and or one Minor violation. 43

48 No Prior Insurance: Applicants that have not maintained auto insurance continuously for the preceding six (6) months will be surcharged as follows: 1. Within 45 days of lapse No Surcharge 2. Lapse Days Lapse Days Lapse 91 Days and over Increased factors apply to Liability, PD, MP, PIP, Collision and OTC coverage lines. Inexperienced Driver: Increase factors determined by the number of years licensed: Licensed less than 2 years +.25 Licensed 2 years or more No Surcharge Accident Rating Factors: Number of Accidents BI Accidents PD-Only (Non-BI Event) Each Additional Major Convictions 1. Driving while under the influence of alcohol, controlled substance, drugs or a combination of two or more of these substances, or 2. Involuntary manslaughter; or 3. Criminally negligent operation of a motor vehicle. Conviction Rating Factors: Major Convictions Number of Convictions Factor Each Additional

49 Mid-Major Convictions Driving while license is suspended or driving without a valid drivers or operators license in force and effect. No surcharge will be charged for a conviction of failure to have a motorcycle operator s endorsement provided the operator has an otherwise valid driver s license. Conviction Rating Factors: Mid-Major Convictions Number of Convictions Factor Each Additional +.35 All violations not specifically described as Major or Mid-Major convictions are considered Minor Convictions. Minor Convictions do not create any surcharge. They are underwriting acceptance considerations only. Policy Discounts: Discounts Factor Adjustments Homeowners -.05 Good Student -.15 Paid in Full Payment Option -10% Driver Improvement Course -10% * Claim Free -.10 Transfer Discount -.05 The discounts are applied to Liability, PD, MP, PIP, Collision and OTC coverage lines. * This discount is applied to Liability, PD, MP, PIP and Collision. Note: OTC is not included for this discount. 45

50 Transfer/Policy Renewal Discounts: Policy has been active: Discount At least 1 year but less than 2 years 4% At least 2 years but less than 3 years 7% At least 3 years but less than 4 years 9% At least 4 years but less than 5 years 10% At least 5 years but less than 6 years 11% At least 6 years but less than 7 years 12% At least 7 years but less than 8 years 13% At least 8 years but less than 9 years 14% At least 9 years but less than 10 years 14% At least 10 years without interruption 15% Discount applied to Liability, PD, MP, PIP, Collision and OTC coverage lines. SR-22 Surcharge: $20.00 flat fee for an SR-22 Filing. Filings are to be made by the Home Office, not in the agents office. Standard Auto Credit Score All Territories Level Factor

51 Base Territory Rates Territory BI PD Territory BI PD BI & PD Increased Limit Factors BI PD Limits (in 000 s) Factor Limits Factor $30/ $25, / , / , /

52 Model Year and Symbol Relativities for Comprehensive Comprehensive Model Year &Prior 2002 Symbol

53 Model Year Symbol

54 Other Than Collision (OTC) Base Rates, $500 Ded., 2010 Model Year, Symbol 8 Territory OTC Base Rates Territory OTC Base Rates OTC Deductibles Factor $ , , , ,

55 Model Year and Symbol Relativities for Collision Collision Model Year &Prior 2002 Symbol

56 Model Year Symbol

57 Collision (Coll) Base Rates, $500 Ded., 2010 Model Year, Symbol 8 Territory Coll Base Rates Territory Coll Base Rates Collision Deductibles Factor $ , , , ,

58 Personal Injury Protection (PIP) Rates Territory $2,500 PIP (Base) Territory $2,500 PIP (Base) PIP Increase Factors (All Territories) Limit Factor $2, , ,

59 Medical Payment (MP) Rates Territory $1,000 MP (Base) Territory $1,000 MP (Base) MP Increase Factors (All Territories) Limit Factor $1, , , , ,

60 TERRIRORY UM RATES Territory UIM-BI PD UIM-BI PD UIM-BI PD In 000 s 30/ / /

61 Annual: Not available. CORNERSTONE NATIONAL INSURANCE COMPANY PAYMENT OPTIONS Six-Month: Programs available: 1. 1-Pay: Submit entire premium (5% discount applies). No installment charge on renewals Pay: Submit 50% down payment. Insured will be billed for the balance due 90 days after policy inception. Renewals: Renewal will be 50% of the total renewal premium. Insured will be billed one installment for the balance due 90 days after renewal inception date Pay: Submit 33 1/3% down payment. Insured will be billed for balance in two installments of 33 1/3% due 60 and 120 days after policy inception. Renewals: Renewal remittance will be 33 1/3% of the total renewal premium. Insured will be billed for two additional installments of 33 1/3% due 60 and 120 days from renewal inception date Pay: Submit 33 1/3 % down payment. Insured will be billed for the balance in four installments of 16 2/3% due 30, 60, 90, and 120 days after policy inception. Or, submit 24 % down payment. Insured will be billed for the balance in four installments of 19% due 30, 60, 90, and 120 days after policy inception. Or, submit 16 2/3% down payment. Insured will be billed for the balance in five installments of 16 2/3% due 30, 60, 90, 120, and 150 days after policy inception. Renewals: Renewal remittance will be 16 2/3% of total renewal premium. Insured will be billed for five additional installments due 30, 60, 90, 120, and 150 days from renewal billing. Electronic Funds Transfer (EFT): Premiums may be paid through the insured s bank by using Electronic Funds Transfer. The insured will pay 16 2/3% down payments to the company. Approximately 15 days prior to any deduction, we will send the insured a withdrawal notice of the amount and date of the withdrawal. Policies on EFT require a notice of ten business days to be changed from EFT to another plan and the insured still must pay the amount due by the due date. There is a $2.00 installment charge with this plan. NOTE: The 3 & 6 pay options will have a minimum monthly payment of $ Fees: A billing fee of $5.00 is applied to installments unless electronic bank drafts have been authorized in which case a $2.00 fee will apply. Payments returned as insufficient funds will be charged $ If accepted, a reinstatement fee of $25.00 will apply to late payments. A $10.00 late fee will be assessed if payment is received or postmarked after the due date. A $25.00 Reinstatement fee will be assessed if the policy is reinstated within ten (10) days from the cancellation date and a signed statement of no loss is received. A $2 ABTPA fee will be charged per motor vehicle year. 57

62 Expense Constants BI PD OTC COLL Vehicle Capping Procedure Rate Capping The increase in premium for renewal policies will be capped at 10%. If the increase in premium for a renewal exceeds 10% then the following equation will determine the vehicle level discount: Rate Cap Factor = (Expiring Full-Term Premium * 1.10)/Renewal Full-Term Premium. The rate cap factor will be determined without applying any new violations and accidents to the renewal full-term premium. Once the rate cap factor is determined any new accidents or violations will then be added to the renewal premium. This discount does not apply to any vehicles added on or after the renewal term takes effect. 58