FARMERS MUTUAL INSURANCE COMPANY UNDERWRITING GUIDELINES PERSONAL/PREMISES LIABILITY

Transcription

1 FARMERS MUTUAL INSURANCE COMPANY UNDERWRITING GUIDELINES PERSONAL/PREMISES LIABILITY 11/2009

2 These guidelines are intended to assist the field underwriter (agent) to evaluate the type of risks which are acceptable into the Personal/Premises Liability Program of Farmers Mutual Insurance Company. These guidelines are intended to be general in nature and are not all inclusive. Every risk is unique and must be considered on its own merits. The final decision of acceptability rests with the Company Underwriter. The moral risk of the individual, partnership, or corporation applying for insurance under any insurance program is the most important risk factor to consider when underwriting a policy. The character, attitude, business management ability, and financial stability of an insured will determine to a great degree the desirability of the risk. Successful individuals, partnerships, and corporations are the best insurance risks. Their success is reflected in their relationship with associates and friends, and a social and financial reputation in the community. The physical appearance of the dwellings, outbuildings, machinery, and premises, should reflect a high degree of maintenance in order that the likelihood of loss can be reduced. RULES 1. Liability coverage may be added as an endorsement to a fire policy. 2. A completed Application for Fire Insurance Form is for all new risk. Space is provided on the front of the form for Liability coverage limits. Questions for liability underwriting are found on the back of the form. It is extremely important that all questions on the form be completed. Adequate space is provided for notes. In the event additional explanation is required please attach additional note pages as needed. Applications which are incomplete could cause delays in processing the risk and may have to be returned to the agent for completion. We like happy policyholders and delays do not make happy policyholders. PREFERRED UNDERWRITING RISKS 1. We are seeking to insure individual home owners living in their own homes that are well maintained, neat in every respect, and which show pride of ownership. 2. We are seeking to insure the small Family Farming Operations which have neat buildings and premises, where the fences are well maintained and which have experienced no previous losses. 3. We are seeking to provide insurance under this program to insureds for which we also provide the insurance for the physical property. No monoline liability can be written. 4. We are seeking to insure individuals, partnerships, or corporations which are successful in their business ventures and which possess high moral character and standing with their friends, associates, and community. 5. Additional Liability for rental structures: Liability for no more than five (5) additional rental structures should be insured on the fire policy. More than 5 is considered a business. 11/2009 2

3 The following guidelines should be considered when offering insurance for certain types of risks: 1. CUSTOM FARMING GUIDELINES - We do not offer this coverage. 2. CARE OF OTHERS GUIDELINES - We do not offer this coverage. 3. HOME BEAUTY SALONS - We do not offer this coverage. UNDERWRITING RISK TO BE AVOIDED In keeping with good underwriting practices and sound business judgment we believe the following types of risks should be avoided as they are not in keeping with the types of risk we seek to insure. These underwriting guides of risks to be avoided are not all inclusive. Each risk is unique and must be considered on its own merits. The final decision of acceptability rests with the company underwriter. 1. Dogs which would be described as VICIOUS should be avoided. We consider dogs as vicious which meet one or more of the following: a. Dogs that chase people or cars; b. Dogs that bite or have bitten in the past; c. Dogs that have bitten in the past for which claims have been made; d. Certain breeds such as but not limited to: i. Pit Bulls ii. Doberman iii. German Shepherd iv. Rottweiler v. Chows vi. Or any other dog with aggressive tendencies (vicious) 2. Exotic pets should be avoided. We consider Exotic Pets to include but not be limited to: a. Lion, Tigers or their cubs b. Snakes c. Certain types of exotic fish d. And other types of Exotic Animals 3. The company is concerned about the increased liability exposure caused by swimming pools. When a swimming pool is present at an insured location, we require the following: a. The pool should be enclosed by a fence which is locked when it is not in use, b. No water slides or diving boards will be accepted, and c. Photos of the swimming pool are required. 4. Houses that are not well maintained should be avoided. We find the following items to be especially worrisome when considering a risk: a. Loose boards on porches; b. Loose hand rails and/or missing hand rails; c. Poor Housekeeping; such as, i. Debris such as old refrigerators, etc., left setting around a dwelling; ii. Trash in yards; iii. Overgrowth of shrubs, trees, or grass. 11/2009 3

4 5. Farms that are not well maintained should be avoided. We find the following items to be especially worrisome when considering a risk: a. Poor pasture or corral fences; b. Risks that have experienced more than two livestock liability losses during the preceding three years; c. Equipment that has been altered from the manufactures original design; such as, i. Removal of safety shields, automatic shutoff devices, etc.; ii. Used for something other than what the original designed use. d. Farm ponds assessable to the general public for fishing or swimming. 6. Feedlot operations should be avoided as these types of risks generally tend to be beyond the scope of private farming operations. 7. Risks which for public recreational activities should be avoided. We find the following types of activities to be especially worrisome when considering a risk: a. Race tracks; b. Motorcycle or three/four wheeling recreational activities; c. Public picnicking areas; d. Public swimming or fishing areas; e. Agribusiness activities that invite the public or customers, for sales or activities. 8. Premises only liability coverage should not be written on farm property or lands. 9. Dwellings with floor furnaces should not be written with Premises/Personal/Farm Personal Liability Coverage due to the danger these types of furnaces create for young and elderly persons. An exception may be considered by the underwriter with a signed restrictive endorsement excluding coverage for any injury or claims for any persons occurring in connection with the floor furnace. 10. When the insurable risk is located on 10 acres or more, farm personal liability should be written on the policy when liability is requested by the insured. 11. We are concerned about the increased exposure created by individual water vehicles, aka jet skis. Coverage should not be bound on this type of exposure without prior approval of the underwriter. 12. Incidental business in the home that would be considered with the attachment of an endorsement could include dance studio, office, crafts (woodworking), taxidermy, and pottery. Any incidental business in the home should be discussed with the underwriter before coverage is bound. UNDERWRITING ITEMS OF IMPORTANCE When evaluating the acceptability of a risk the Company Underwriter will be looking closely at the following: 1. MAINTENANCE OF DWELLING a. Condition of: i. Porches ii. Handrails iii. Steps iv. Sidewalks & Driveways b. Occupancy - Prefer Owner 11/2009 4

5 2. HOUSEKEEPING a. Junk and Debris on or around the premises; b. Physical risk: i. Yards ii. Trees iii. Shrubs; and; c. Pride of Ownership: i. General Appearance of property. 3. PRIOR CLIAIMS a. Type of claim; b. Details surrounding the incident; c. Was liability assessed to the insured for the claim; d. If there have been more than 2 liability claims in the three preceding years it is highly unlikely we will insure the risk; e. Has the applicant been cancelled by another company and why. 4. FARMING a. Condition of corral and pasture fences; b. Equipment; i. Alterations ii. Type iii. Use 11/2009 5