GEOVERA SPECIALTY INSURANCE COMPANY HOMEOWNERS POLICY TEXAS UNDERWRITING MANUAL

Transcription

1 GEOVERA SPECIALTY INSURANCE COMPANY HOMEOWNERS POLICY TEXAS UNDERWRITING MANUAL

2 TABLE OF CONTENTS SUBJECT Underwriting Guidelines ii Highlight of Policy Sublimits and Exclusions iii - iv Ineligible Risks v 1. Introduction 1 2. General Description 1 3. Binding Authority and Issuance 1 4. Policy Term and Premiums 2 5. Application 2 6. Inspection Reports 2 7. Eligibility Criteria 2 8. Rating Criteria 3 9. Transfer or Assignment Property Address Changes Backdated Cancellations Coverage Summary Section I Coverages and Available Increases Section II Coverages and Available Increases Additional Coverages Surcharges and Credits Additional Insureds and Interests Deductibles 8-9 Forms Listing Page Index 12 PAGE NUMBER TX-Page i

3 UNDERWRITING GUIDELINES AMOUNT OF INSURANCE Coverage A range: $85,000 to $600,000 (NB) $85,000 to $750,000 (RN) INSURANCE TO VALUE 100% replacement cost (based on location, size) SECTION I (ALL OTHER PERILS) DEDUCTIBLE 1% of Coverage A WINDSTORM/HAIL DEDUCTIBLE Zone 1: 2% of Coverage A (with $1,000 minimum) Zone 2: Percentage of Coverage A (with a $1,000 minimum); dependant upon the property s distance to coast. PROTECTION CLASS ISO protection classes 1-9 are eligible PRIOR CLAIMS 2 paid claims in the past 3 years acceptable if the total of both claims does not exceed $20,000 AGE OF STRUCTURE 1945 and newer are eligible if home is equipped with copper wiring and circuit breakers INELIGIBLE EXPOSURES AND OCCUPANCIES Builders risk; course of construction; undergoing renovation or reconstruction; vacant; unoccupied; seasonal; secondary; held for rental or tenant occupied; more than 3 levels; more than 4 units; premises never occupied by insured; premises with a body of water on the property other than a swimming pool; conviction for arson or coverage-related crimes; mobile homes; modular homes; prefabricated homes; farmettes or ranchettes; properties located outside of Tier 1 and Tier 2 (for new business only); properties with more than 3 mortgages or loss payees; PC 10 homes; rural route property location addresses; homes built on stilts, caissons, post and pier, pier and beam, or unknown foundations; EIFS construction; homes located on more than 5 acres; animals owned or kept other than domestic pets; homes with wood stoves or pellet stoves; unfenced pools; construction other than frame or masonry; aluminum wiring, knob and tube wiring, fuse boxes, or homes without circuit breakers; uncorrected fire code violations; foreclosure, repossession, or bankruptcy in the last 5 years; bars on windows without release; condemned or without public utility services; converted commercial building; unconventional designed dwellings, including but not limited to berm, geodesic, log, or underground homes; risks with unrepaired, unresolved or unmitigated damage. TX-Page ii

4 HIGHLIGHT OF POLICY SUBLIMITS AND EXCLUSIONS TEXAS The GeoVera Specialty Homeowners Program uses the HO-3 (10-00) policy form, which contains standard policy sublimits and exclusions. In addition to the sublimits and exclusions contained in the HO-3 policy form, the following sublimits and exclusions are added to the policy by way of mandatory endorsement. Coverages Sublimits or Exclusions Endorsement Number Animals Owned or Kept Section II: Liability & Medical Payments coverage US (09-07) by an Insured* excluded Asbestos or Lead Excluded US (09-07) Contamination Assault and Battery Excluded US (09-07) Bodies of Water** Section II: Liability & Medical Payments coverage US (09-07) excluded Domestic Animals Section II: Liability & Medical Payments coverage US (09-07) Covered Under the Policy limited to $25,000 Flooring Hard floor covering limited to room(s) where loss or US (06-09) damage occurred Home Day Care Section I: Personal Property coverage limited to $2,500 HO (10-00) Section II: Liability & Medical Payments coverage excluded Limited Swimming Pool $5,000 US (09-07) Enclosure and Patio Enclosure Coverage Loss Assessment $5,000 US (09-07) Mobile Homes Excluded US (09-07) Mold $5,000 per policy period total limit US (09-07) Ordinance or Law 25% of Coverage A HO (10-00) Pollution Liability Section II: Liability & Medical Payments coverage US (09-07) excluded Punitive or Exemplary Excluded US (09-07) Damages Roof Coverage $5,000 per policy period total limit if roof contains more US (09-07) than one layer of overlayment Seepage or Leakage over $1,000 per policy period total limit US (09-07) 14 days Terrorism Excluded US (09-07) Unfenced Pools Section II: Liability & Medical Payments coverage US (09-07) excluded Vicious Dogs *** Section II: Liability & Medical Payments coverage excluded US (09-07) The following optional endorsement restricts coverage: Water Damage and Off Premises Theft Section I: Restricts coverage for water damage and removes coverage for off premises theft US-A (09-07) TX-Page iii

5 HIGHLIGHT OF POLICY SUBLIMITS AND EXCLUSIONS TEXAS * Animals Owned or Kept by an Insured: Animal owned or kept by an insured means any domestic or wild animal owned by an insured, or in their care, custody or control. This exclusion does not apply to domestic animals not commonly considered livestock, such as dogs and cats kept as pets, that are owned by or in the care, custody or control of an insured, and not otherwise excluded under this policy. ** Bodies of Water: Any natural or man-made body of water, including but not limited to: Ponds; Lakes; Streams; Pools; Swamps; and Creeks This exclusion does not apply to swimming pools which are not otherwise excluded under this policy. *** Vicious Dogs definition: A vicious canine means a canine, regardless of the breed, that any insured knows, or should have known, has attacked, bitten, or otherwise caused bodily injury to any person; A Staffordshire Bull Terrier; An American Pit Bull Terrier; A Rottweiler; A Doberman Pinscher; or A Chow Chow. A canine will be considered a Staffordshire Bull Terrier, American Pit Bull Terrier, Rottweiler, Doberman Pinscher, or Chow Chow if its lineage contains part of that breed. TX-Page iv

6 INELIGIBLE RISKS Ineligible Exposures and Occupancies Aluminum wiring, knob and tube wiring, fuse boxes, or homes without circuit breakers Animals owned or kept other than domestic pets Bars on windows without release Body of water on the property other than a swimming pool Builders risk Claims: More than 2 paid in the past 3 years or total more than $20,000 Condemned or without public utility services Construction other than Frame or Masonry Converted commercial building Conviction for arson or coverage-related crimes Course of Construction EIFS construction Farmettes or Ranchettes Foreclosure, repossession, or bankruptcy in the past 5 years Foundation of stilts, caissons, post & pier, pier & beam, or unknown Held for rental Located on more than 5 acres Mobile Homes, Modular Homes, Prefabricated Homes More than 3 levels More than 4 Units Premises Never Occupied By Insured Properties located outside of Tier 1 and Tier 2 (for new business only) Properties with more than 3 mortgages or loss payees Protection Class 10 Risks with unrepaired, unresolved or unmitigated damage Rural route property location addresses Seasonal or secondary homes Tenant Occupied Unconventional designed dwellings, including but not limited to berm, geodesic, log, or underground homes. Uncorrected fire code violations Undergoing renovation or reconstruction Unfenced pools Unoccupied homes Vacant homes Wood stoves or Pellet stoves Year built prior to 1945 TX-Page v

7 1. INTRODUCTION GeoVera Specialty Insurance Company This GeoVera Specialty Insurance Company Underwriting Manual contains the rules for the Homeowners program, as well as rules governing eligibility and underwriting requirements, including premium/rating factors. The program is intended to serve the basic homeowners insurance needs of the middle market. This program may be supplemented by purchase of additional policies to cover risk exposures not covered in this basic homeowners program. Some examples of additional policies might include: a watercraft policy, a scheduled personal property floater policy, or a personal excess umbrella policy. Any questions regarding limits, deductibles, coverages, acceptability or any other area not specifically addressed in this manual must be referred directly to GeoVera Specialty Insurance Company. The information in this manual is non-binding and does not amend or otherwise affect the terms, conditions or coverages of any insurance policy issued by GeoVera Specialty Insurance Company. All terms and conditions are contained in the policy itself. 2. GENERAL DESCRIPTION The GeoVera Specialty program uses primarily ISO forms and endorsements (2000 edition), as well as some proprietary GeoVera Specialty endorsements. The program issues one basic form: For owner-occupied residential dwellings HO-3 (HO ) Optional endorsement US-A may be added to achieve an HO-3A. The US-A endorsement provides premium savings in return for coverage restrictions on water damage and coverage removal for off premises theft. A Forms List in this manual contains all valid forms and endorsements. 3. BINDING AUTHORITY AND ISSUANCE A. Binding authority rests with GeoVera Specialty Insurance Company. Policy issuance done by the program administrator or designated service center. B. The Company will suspend binding of coverage for new business and for increases when the following conditions exist, or earlier, at its discretion: When a NOAA-designated tropical storm, tropical depression, or hurricane is located within the boundaries of 80 degrees West longitude, and 20 degrees North latitude. TX-Page 1 of 12

8 4. POLICY TERM AND PREMIUMS Annual policies (12 months) are issued. Premium financing is not permitted. 5. APPLICATION GeoVera Specialty Insurance Company The Company requires a completed application submitted via the Residential Homeowners Quote (RHQ) website. The Company also requires a signed copy of the GeoVera Specialty RHQ application. The application is completed on-line and printed in the agent s office. 6. INSPECTION REPORTS Inspection reports will be ordered at the discretion of the Company. The Company will rely on public records information to verify proper replacement cost. 7. ELIGIBILITY CRITERIA To be eligible for this program, the risk must fit the following criteria: Frame or masonry construction Coverage A between $85,000 - $600,000 Year built 1945 and newer Copper wiring and circuit breakers Primary usage only Protection class 1-9 ISO Protection classes are used. There is no suburban rating rule or protection class deviation plan in effect. Two paid claims in the past 3 years are acceptable if the total of both claims does not exceed $20,000. For new business, must be located in Tier 1 or Tier 2 TX-Page 2 of 12

9 8. RATING CRITERIA GeoVera Specialty Insurance Company A. TERRITORY DEFINITIONS - Location Based On Zip Code and Distance To Coast. Distance to Coast is calculated by the Company. B. PROTECTION CLASS INFORMATION - ISO protection classes are used. There is no suburban rating rule or protection class deviation plan in effect. C. CONSTRUCTION DEFINITIONS FRAME wood or steel frame; exterior walls of wood frame, stucco or other combustible construction, including composition siding, wood-iron clad, plaster on combustible support, sheet aluminum or aluminum siding on wood, plastic siding over frame, asphalt covered fiberboard, asbestos board, rigid asbestos, hard cement type siding, and brick veneer (up to 100%). MASONRY includes exterior walls of solid masonry, brick, stone or stone veneer, CBC (concrete/cinder block) construction, and hollow masonry units. D. INSURANCE TO VALUE Pricing contemplates writing the amount of insurance at 100% of the replacement cost of the dwelling. Valuation methodology reflects repair and replacement cost based on location, age, and size of home. The Company will calculate the minimum amount of insurance offered for each property based on replacement cost. The amount of insurance offered can be increased in $1,000 increments up to the program limits, but cannot be decreased. 9. TRANSFER OR ASSIGNMENT A policy may not be endorsed to effect assignment from one insured to another. Name changes due to marriage, divorce, or death are permitted if accompanied by supporting legal documentation. 10. PROPERTY ADDRESS CHANGES Changes to the Property Address are not permitted, except corrections as a result of typographical errors or address changes stipulated by the United States Postal Service (USPS). Requests must be in writing with reason given for the address change. If the change is the result of the USPS, then a copy of the USPS documentation must be provided. The policy will be re-underwritten based on the corrected Property Address, and any resulting premium changes will be charged or credited as appropriate. If the policy is ineligible based on corrected Property Address information, the policy will be cancelled back to the current term effective date. TX-Page 3 of 12

10 11. BACKDATED CANCELLATIONS GeoVera Specialty Insurance Company Backdated cancellation for duplicate coverage, sale of home, or foreclosure is limited to 1 year with adequate proof. Receipt of Request to Cancel From Current Term Effective Date 1 + days 1+ days 1+ days Requested Date Of Cancellation Current Term Effective Date After Current Term Effective Date Prior to Current Term Effective Date (prior term) Cancellation Type Flat Cancellation Pro-Rata Cancellation Pro-Rata Cancellation Fee Handling On Current Term All Fees are Fully Refundable Fully Earned Fees are Non- Refundable All Fees are Fully Refundable Fee Handling on Prior Term (if applicable) N/A N/A Fully Earned Fees are Non- Refundable TX-Page 4 of 12

11 12. COVERAGE SUMMARY GeoVera Specialty Insurance Company A summary of the issuance levels, covered perils, and loss settlement terms are as follows: Coverage A- Dwelling Coverage B- Other Structures Coverage C- Personal Property Coverage D- Loss of Use Coverage E- Comprehensive Personal Liability Coverage F- Medical Payments Perils on A & B Perils on C Loss Settlement on A & B HO-3 Owners Issued at 100% replacement cost Issued at 10% of A (no increase/decrease) Issued at 50% of A (no increase/decrease) Issued at 20% of A (no increase/decrease) Issued at $300,000 (increasable to $500,000 if required by umbrella) Issued at $2,000 (no increase/decrease) All risks not excluded 16 broad form named perils ( all risk not available) Replacement cost Loss Settlement on C Replacement cost; ACV is not an option Ordinance or Law Issued at 25% of A (Building Code) (via endorsement HO-04-77) Loss Assessment Issued at $5,000 (via endorsement US-04-35) TX-Page 5 of 12

12 13. SECTION I COVERAGES AND AVAILABLE INCREASES A. COVERAGE A DWELLING LIMIT The amount written is shown on the declarations. Coverage A may be adjusted for inflation at renewal B. COVERAGE B - OTHER STRUCTURES LIMIT Coverage B is issued at 10% of the Coverage A limit No increases or decreases available C. COVERAGE C PERSONAL PROPERTY LIMIT Coverage C is issued at 50% of the Coverage A limit No increases or decreases available 1) Increased Internal Limit: Endorsement HO is included on all policies for no additional charge. This endorsement increases the limit on loss by theft of jewelry, watches, and furs to $2,500. 2) Personal Property Replacement Cost: Personal property loss settlement is on a replacement cost basis. Endorsement HO will be added to every policy for no additional cost. D. COVERAGE D - LOSS OF USE Coverage D is issued at 20% of the Coverage A limit No increases or decreases available 14. SECTION II COVERAGES AND AVAILABLE INCREASES A. COVERAGE E COMPREHENSIVE PERSONAL LIABILITY Coverage C is issued at $300,000. This may be increased to $500,000 for $100 if required by an umbrella carrier. No decreases available. B. COVERAGE F MEDICAL PAYMENTS Coverage F is issued at $2,000. No increases or decreases available. C. EXTENSION OF SECTION II COVERAGES 1) Section II coverage may be extended to 1-4 rental units. Specify the insured locations; use endorsement HO-24-70, and charge $300 per unit. 2) Section II coverages may be extended to one or two seasonal/secondary locations owned and occupied by the insured. These locations may not be rented to others. Specify the insured locations; use endorsement US-24-70, and charge $100 per residence. TX-Page 6 of 12

13 15. ADDITIONAL COVERAGES GeoVera Specialty Insurance Company A. ORDINANCE OR LAW COVERAGE Endorsement HO-04-77, providing 25% of Coverage A, will be added to all policies for no additional charge. B. EXCLUDING WINDSTORM/HAIL COVERAGE Windstorm/Hail coverage can be excluded via endorsement HO-04-94, for a 25% credit. C. LOSS ASSESSMENT INCREASED LIMIT Policy includes $5,000 of coverage (extended via endorsement US-04-35) No increases available 16. SURCHARGES AND CREDITS Premium credits and surcharges will be computed at various points in the rating calculation. A. PRIOR LOSS SURCHARGE A 20% surcharge is made for each prior paid claim in the past 3 years. Include losses at previous residences, and losses at the insured residence whether or not the insured was a resident at the time of loss. Maximum of 2 paid claims in the last 3 years if the total of both claims does not exceed $20,000. Prior losses not surcharged (do not include on application loss history): o Medical Payments or Liability claims for prior owners o Claims $250 or under (any loss cause) for prior owners o Mysterious disappearance claims on scheduled articles o Watercraft or boat claims o Catastrophe claims B. ROOF SURCHARGE If roof is not concrete shingle or concrete tile, OR if roof has not been replaced down to the sheathing (but not including sheathing) within the past 3 years, surcharge schedule is as follows: Roof Age Surcharge Roof Age Surcharge 0 3 yrs 0% 8 yrs 16% 4 yrs 4% 9 years 19% 5 yrs 7% yrs 22% 6 yrs 10% 12+ yrs 25% 7 yrs 13% C. SECURITY DISCOUNTS If the risk location has an in-home security package (deadbolts, smoke/fire detector, fire extinguisher) then a 2% discount applies. If the risk location has a central station alarm then a 3% discount applies. TX-Page 7 of 12

14 17. ADDITIONAL INSUREDS AND INTERESTS Persons or organizations having an insurable interest in the residence premises may be added to the policy for Section I protection on Coverages A and B, and for Section II protection on a premises only basis. Attach endorsement HO (Additional Insured) and specify the name and address of the party. Persons or organizations in addition to a mortgagee having an interest in the residence premises will be notified of cancellation or non-renewal of the policy. Attach endorsement HO (Additional Interests) and specify name and address of the party. 18. DEDUCTIBLES A. SECTION I (ALL OTHER PERILS) DEDUCTIBLE 1) The Section I deductible is 1% of Coverage A 2) Credit is available for higher deductibles: Deductible Credit 2% 10% 3% 15% 4% 20% 5% 25% B. WINDSTORM/HAIL DEDUCTIBLE 1) Zone 1: The windstorm/hail deductible is 2% of Coverage A (with a $1,000 minimum). 2) Zone 2: The windstorm/hail deductible is a percentage of Coverage A (with a $1,000 minimum). The base windstorm/hail deductible is dependant upon on the property s distance to coast (refer to the table below). The windstorm/hail deductible may be modified for a credit as follows: Distance To Coast Base Deductible 2% 3% 4% 5% DTC <= 0.10 miles 5% N/A N/A N/A N/A 0.10 miles < DTC <=0.50 miles 5% N/A N/A N/A N/A 0.50 miles < DTC <=1.0 miles 2% N/A 4.9% 9.1% 13.2% 1.0 mile < DTC <=2.0 miles 2% N/A 5.4% 9.9% 14.4% 2.0 miles < DTC <=3.0 miles 2% N/A 5.7% 10.4% 15.2% 3.0 miles < DTC <=4.0 miles 2% N/A 5.8% 10.7% 15.5% 4.0 miles < DTC <=5.0 miles 2% N/A 5.9% 10.9% 15.8% 5.0 miles < DTC <=10.0 miles 2% N/A 6.3% 11.1% 16.7% DTC > 10.0 miles 2% N/A 7.0% 11.3% 17.5% TX-Page 8 of 12

15 Zone 2 (Tier 1 and Tier 2) : Zip codes in the following counties and zip codes which border the following counties: Aransas Fort Bend Jefferson Nueces Bee Galveston Jim Wells Orange Brazoria Goliad Kenedy Refugio Brooks Hardin Kleberg San Patricio Calhoun Harris Liberty Victoria Cameron Hidalgo Live Oak Wharton Chambers Jackson Matagorda Willacy Zone 1: All other locations TX-Page 9 of 12

16 FORMS LISTING PAGE MANDATORY ENDORSEMENTS: Number Name Description HO (10-00) Special Form Policy Form for Owners CLIL (09-07) Signatures of GeoVera Specialty Officers HO (10-00) Increased Limit on Jewelry, Watches and Increase to $2,500 Furs HO (10-00) Ordinance or Law Increase Increase to 25% HO (10-00) Personal Property Replacement Cost Amendatory Endorsement HO (10-00) Limited Home Day Care Coverage Amendatory Endorsement USPRIV (09-07) GeoVera Specialty Privacy Policy US (09-07) GeoVera Specialty Special Provisions Amendatory Endorsement US (09-07) Surplus Lines Notice US (01-10) Important Notice Consumer Contacts US (09-07) Limited Smog, Rust, Mold, Rot, or Amendatory Endorsement Bacteria Coverage and Limited Seepage or Leakage Coverage US (09-07) Nuclear Damage and Bio-Chemical Amendatory Endorsement Release from Terrorism Exclusions US (09-07) Roof Coverage Limitation Amendatory Endorsement US (09-07) Important Notice New Policy Terms Attached at Policy Renewal (09/25/10 to 09/24/11) US (12-07) Important Notice New Policy Terms Attached at Policy Renewal (05/03/10 to 05/02/11) US (06-09) Important Notice New Policy Terms Attached at Policy Renewal (05/03/10 to 05/02/11) US (09-07) Loss Assessment Coverage Increase to $5,000 US (09-07) Master Endorsement Amendatory Endorsement US (09-07) Inflation Guard Coverage Amendatory Endorsement US (09-07) Limited Swimming Pool Enclosure and Amendatory Endorsement Patio Enclosure Coverage US (09-07) Policy Fee Disclosure Clarifying Endorsement US (06-09) Hard Floor Covering Limitation Amendatory Endorsement TX-Page 10 of 12

17 FORMS LISTING PAGE OPTIONAL ENDORSEMENTS: Number Name Description HO (10-00) Additional Interest Acknowledges others interests in the premises HO (10-00) Additional Insured Extends some coverages to others HO (09-01) Windstorm, Hurricane and Hail Exclusion HO (10-00) Additional Premises Liability Coverage Extends liability to 1-4 rental units US-A (09-07) Water Damage Limitation and Off Premises Theft Exclusion Restricts coverage for water damage and removes coverage for off premises theft US (09-07) Additional Residence Occupied by Insured Extends liability to insured s seasonal/secondary TX-Page 11 of 12

18 INDEX SUBJECT Additional Coverages 7 Additional Insured 8 Additional Interest 8 Application 2 Backdated Cancellations 4 Binding Authority 1 Construction Definitions 3 Coverage A Dwelling Limit and Increases 6 Coverage B Other Structures Limit 6 Coverage C Personal Property Limit and Increases 6 Coverage D Loss of Use Limit 6 Coverage E Personal Liability Limit and Increase 6 Coverage F Medical Liability Limit 6 Coverage Summary 5 Deductibles 8-9 Eligibility Criteria 2 Forms Listing Frame Definition 3 General Description 1 Highlight of Policy Sublimits and Exclusions iii - iv Ineligible Risks v Inspection Reports 2 Insurance to Value 3 Introduction 1 Issuance 1 Jewelry, Watches and Furs Internal Limit Increase 6 Loss Assessment Increased Limit 7 Loss of Use Limit 6 Masonry Definition 3 Ordinance or Law Coverage 6 Personal Property Replacement Cost Coverage 6 Policy Term and Premiums 2 Prior Loss Surcharge 7 Property Address Changes 3 Protection Class 3 Rating Criteria 3 Roof Surcharge 7 Security Discounts 7 Surcharges and Credits 7 Transfer or Assignment 3 Underwriting Guidelines ii PAGE NUMBER TX-Page 12 of 12