USF&G SPECIALTY INSURANCE COMPANY HOMEOWNERS POLICY OKLAHOMA UNDERWRITING MANUAL

Transcription

1 USF&G SPECIALTY INSURANCE COMPANY HOMEOWNERS POLICY OKLAHOMA 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 1 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 Section II Coverages Additional Coverages Surcharges and Credits Additional Insureds and Interests Deductible Earthquake Coverage 6 Forms Listing Page 7 Index 8 PAGE NUMBER OK-Page i

3 UNDERWRITING GUIDELINES AMOUNT OF INSURANCE Coverage A range: $50,000 to $600,000 (NB) $50,000 to $750,000 (RN) INSURANCE TO VALUE 100% replacement cost (based on location, size) DEDUCTIBLE $1000, $2,500, $5,000 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 4 units; premises never occupied by insured; premises less than 5 feet above sea level, or located in or on the water; 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 with 3 or more mortgages or loss payees; PC 10 homes; rural route property location addresses; log homes; underground homes; berm homes; geodesic constructions; homes built on stilts, caissons, post and pier, pier and beam, or unknown foundations; 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, or homes without circuit breakers; uncorrected fire code violations; foreclosure, repossession, or bankruptcy in the past 5 years. OK-Page ii

4 HIGHLIGHT OF POLICY SUBLIMITS AND EXCLUSIONS OKLAHOMA The USF&G Specialty Homeowners Program uses the HO (10-00) policy form, which contains standard policy sublimits and exclusions. In addition to the sublimits and exclusions contained in the HO policy form, the following sublimits and exclusions are added to the policy by way of endorsement. Coverages Sublimits or Exclusions Endorsement Number Animals Owned or Section II: Liability & Medical Payments US (07-05) Kept by an Insured* coverage excluded Asbestos or Lead Excluded US (04-03) Contamination Assault and Battery Excluded US (04-03) Bodies of Water** Section II: Liability & Medical Payments US (07-05) coverage excluded Home Day Care Section I: Personal Property coverage limited HO (10-00) to $2,500 Section II: Liability & Medical Payments coverage excluded Loss Assessment $5,000 US (02-03) Mobile Homes Excluded US (07-05) Mold $5,000 per policy period total limit US (04-03) Ordinance or Law 25% of Coverage A HO (10-00) Pollution Liability Section II: Liability & Medical Payments US (04-03) coverage excluded Punitive or Excluded US (04-03) Exemplary Damages Roof Coverage $5,000 per policy period total limit if roof US (10-03) contains more than one layer of overlayment Seepage or Leakage $1,000 per policy period total limit US (04-03) over 14 days Terrorism Excluded US (02-03) Unfenced Pools Section II: Liability & Medical Payments US (07-05) coverage excluded Vicious Dogs *** Section II: Liability & Medical Payments coverage excluded US (07-05) OK-Page iii

5 HIGHLIGHT OF POLICY SUBLIMITS AND EXCLUSIONS OKLAHOMA * 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 at 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. OK-Page iv

6 INELIGIBLE RISKS Ineligible Exposures and Occupancies Aluminum wiring, or homes without circuit breakers Animals owned or kept other than domestic pets Berm homes 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 Construction other than Frame or Masonry Conviction for arson or coverage-related crimes Course of Construction Farmettes or Ranchettes Foreclosure, repossession, or bankruptcy in the past 5 years Foundation of stilts, caissons, post & pier, pier & beam, or unknown Geodesic constructions Held for rental Less than 5 feet above sea level Located in or on the water Located on more than 5 acres Log homes Mobile Homes, Modular Homes, Prefabricated Homes More than 4 Units Properties with 3 or more mortgages or loss payees Protection Class 10 Rural route property location addresses Seasonal or Secondary homes Tenant Occupied Uncorrected fire code violations Undergoing renovation or reconstruction Underground homes Unfenced pools Unoccupied homes Vacant homes Wood stoves or Pellet stoves Year built prior to 1945 OK-Page v

7 1. INTRODUCTION This USF&G 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 USF&G 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 USF&G Specialty Insurance Company. All terms and conditions are contained in the policy itself. 2. GENERAL DESCRIPTION The USF&G Specialty program uses primarily ISO forms and endorsements (2000 edition), as well as some proprietary USF&G Specialty endorsements. The program issues one basic form: For owner-occupied residential dwellings HO-3 (HO ) A Forms List in this manual contains all valid forms and endorsements. 3. BINDING AUTHORITY AND ISSUANCE A. Binding authority rests with USF&G 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 at its discretion. 4. POLICY TERM AND PREMIUMS Annual policies (12 months) are issued. Premium financing is not permitted. OK-Page 1 of 8

8 5. APPLICATION The Company requires a completed application submitted via the Residential Homeowners Quote (RHQ) website. The Company also requires a signed copy of the USF&G 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 $50,000 - $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 No previous arson or coverage-related convictions No rural route property location addresses No unfenced pools No body of water other than a swimming pool Number of units doesn t exceed 4 No stilts, caissons, post and pier, pier and beam, or unknown foundations Not located on more than 5 acres No animals owned or kept other than domestic pets No wood stoves or pellet stoves Home must be well maintained No uncorrected fire code violations No foreclosure, repossession, or bankruptcy in the past 5 years OK-Page 2 of 8

9 8. RATING CRITERIA A. TERRITORY DEFINITIONS (LOCATION BASED ON ZIPCODE) 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 or other combustible construction, including wood-iron clad, stucco on wood, or plaster on combustible support, aluminum or plastic siding over frame, and brick veneer (up to 100%). MASONRY includes masonry and CBC (concrete/cinder block) construction. 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 amount of insurance offered for each property based on replacement cost. The amount of insurance offered can be increased in $5,000 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 for 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. 11. BACKDATED CANCELLATIONS Backdated cancellation for duplicate coverage is limited to 1 year with adequate proof. OK-Page 3 of 8

10 12. COVERAGE SUMMARY 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 HO-3 Owners Issued at 100% replacement cost Issued at 10% of A (no increase/decrease) Issued at 70% 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) Loss settlement on A & B Loss settlement on C Replacement cost protection up to 125% of Coverage A (via endorsement US-82-01) Replacement cost; ACV is not an option Issued at 25% of A (via endorsement HO-04-77) Ordinance or Law (Building Code) Loss Assessment Issued at $5,000 (via endorsement US-04-35) OK-Page 4 of 8

11 13. SECTION I COVERAGES A. COVERAGE A DWELLING LIMIT The amount written is shown on the declarations Policies include replacement cost coverage up to 125% of the Coverage A amount 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 70% of the Coverage A limit No increases or decreases available 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 LIMIT Coverage D is issued at 20% of the Coverage A limit No increases or decreases available 14. SECTION II COVERAGES A. COVERAGE E COMPREHENSIVE PERSONAL LIABILITY Coverage E 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. 15. ADDITIONAL COVERAGES 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. LOSS ASSESSMENT INCREASED LIMIT Policy includes $5,000 of coverage (extended via endorsement US-04-35) No increases available OK-Page 5 of 8

12 16. SURCHARGES AND CREDITS A. PRIOR LOSS SURCHARGE A 20% surcharge applies if there has been 1 paid loss in the past 3 years. A 50% surcharge applies if there have been 2 paid losses 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 20 years, surcharge schedule is as follows: Roof Age Surcharge 0-20 years 0% years 5% years 15% 31 + years 35% C. SECURITY DISCOUNTS If the risk location has an in-home security package (deadbolts, smoke/fire detector, fire extinguisher) then a 5% discount applies If the risk location has a central station alarm then a 5% discount applies 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. DEDUCTIBLE The deductible is $1,000 (credit 10% for $2,500 or 20% for $5,000). 19. EARTHQUAKE COVERAGE Earthquake Coverage is available via endorsement HO A separate earthquake deductible of 10% applies. Pricing is based on size and location of the home. OK-Page 6 of 8

13 FORMS LISTING PAGE MANDATORY ENDORSEMENTS: Number Name Description HO (10-00) Special Form Policy Form for Owners CLIL-180 (07-02) Signatures of USF&G Specialty Officers HO (12-02) Oklahoma Notice Amendatory Endorsement 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 HOPRIV (04-03) USF&G Specialty Privacy Policy US (04-03) USF&G Specialty Special Provisions Amendatory Endorsement US (04-03) Limited Smog, Rust, Mold, Rot, or Amendatory Endorsement Bacteria Coverage and Limited Seepage or Leakage Coverage US (02-03) Nuclear Hazard & Biochemical Release Amendatory Endorsement from Terrorism Exclusions US (10-03) Roof Coverage Limitation Amendatory Endorsement US (11-04) Important Notice New Policy Terms Attached at Policy Renewal ( to ) US (11-04) Important Notice New Policy Terms Attached at Policy Renewal ( to ) US (11-04) Important Notice New Policy Terms Attached at Policy Renewal ( to ) US (07-05) Important Notice New Policy Terms Attached at Policy Renewal ( to ) US (02-03) Loss Assessment Coverage Increase to $5,000 US (07-05) Master Endorsement Amendatory Endorsement US (02-03) Inflation Guard Endorsement Amendatory Endorsement US (02-03) Premium Payment and Refund Waiver Amendatory Endorsement US (02-03) Replacement Cost Protection Up To 125% Extends Replacement Cost up to 125% OPTIONAL ENDORSEMENTS: HO (10-00) Additional Interest Acknowledges others interests in the premises HO (10-00) Additional Insured Extends some coverages to others HO (10-00) Earthquake Endorsement Adds coverage for the peril of earthquake OK-Page 7 of 8

14 INDEX SUBJECT Additional Coverages 5 Additional Insured 6 Additional Interest 6 Application 2 Backdated Cancellations 3 Binding Authority 1 Construction Definitions 3 Coverage A Dwelling Limit 5 Coverage B Other Structures Limit 5 Coverage C Personal Property Limit 5 Coverage D Loss of Use Limit 5 Coverage E Personal Liability Limit 5 Coverage F Medical Liability Limit 5 Coverage Summary 4 Deductible 6 Earthquake Coverage 6 Eligibility Criteria 2 Forms Listing 7 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 Loss Assessment Increased Limit 5 Masonry Definition 3 Ordinance or Law Coverage 5 Personal Property Replacement Cost Coverage 5 Policy Term and Premiums 1 Prior Loss Surcharge 6 Property Address Changes 3 Protection Class 3 Rating Criteria 3 Roof Surcharge 6 Section I Coverages 5 Section II Coverages 5 Security Discounts 6 Surcharges and Credits 6 Territory Definitions 3 Transfer or Assignment 3 Underwriting Guidelines ii PAGE NUMBER OK-Page 8 of 8