AFFIRMATIVE INSURANCE SERVICES

Transcription

1 AFFIRMATIVE INSURANCE SERVICES Texas Choice OLD AMERICAN COUNTY MUTUAL FIRE INSURANCE COMPANY AUTOMOBILE PROGRAM Underwriting Guide March 2014

2 AFFIRMATIVE INSURANCE SERVICES DIRECTORY MAILING ADDRESS Affirmative Insurance Services P O Box 9030 Addison Texas CUSTOMER SERVICE PHONE Agent Only FAX NUMBERS Underwriting Premium Accounting Marketing ext CLAIMS SERVICE First Loss Reporting

3 INDEX GENERAL... 5 Company Bulletins... 5 Misrepresentation... 5 Underwriting Reports... 5 Claims Procedures... 5 BINDING PROCEDURES... 5 General Information... 5 Binding Authority During Inclement Weather... 5 POLICY TERM... 5 APPLICATION... 5 General Rules... 5 Required Documentation... 6 RATING... 6 Driver Assignment... 6 Territories... 6 Tiering... 6 OPERATOR ELIGIBILITY... 6 Acceptable Driver and General Driver Information... 6 Unacceptable Operators... 6 Vehicle Eligibility... 7 Acceptable Vehicle and General Vehicle Information... 7 Unacceptable Vehicles... 7 Prior Damage... 7 s and Limits... 7 Bodily Injury and Property Damage... 7 Uninsured/Underinsured Motorist Bodily Injury (UM/UIM)... 7 Personal Injury Protection (PIP)... 8 Medical Payments (MP)... 8 Physical Damage... 8 Towing... 8 Rental Reimbursement... 8 Additional Equipment... 8 Non-Owner... 9 Limited s... 9 OACM.PhysDam.001 Physical Damage Endorsement... 9 OACM.YCA.002a. Newly Acquired Automobile Endorsement... 9 OACM.AuthDriv.003a Authorized Driver Endorsement... 9 OACM.Storage.004 Storage Endorsement... 9 OACM.DelFee.005 Delivery of Persons and Property For A Fee Endorsement... 9 OACM.AutoTerm.007 Automatic Termination Endorsement... 9 OACM.CrimeIntent.008 Criminal or Intentional Acts Endorsement & OACM.CrimeIntentRentProp.010 Criminal or Intentional Acts Rental Property Endorsement... 9 OACM.NDPW Named Driver Policy Warning... 9 OACM.RentPropAuthDriv.012a Rental Property Authorized Driver Endorsement... 9 OACM.CP.013c Covered Person Endorsement... 9 OACM.OutOfState.016a Out of State Endorsement... 9 Discounts... 9 Underwriting Tier Discount... 9 Multi-Car Discount...10 Homeowner Discount...10 Paid-in-Full Discount...10 Renewal Discount...10 Rollover Discount...10 Smart Shopper Discount...10 Transfer Discount...10

4 INDEX Surcharges Business Use Surcharge...10 Inexperienced Operator Surcharge...10 Non Licensed Driver Surcharge...10 Prohibited Operator Surcharge...10 Driving Surcharges...10 General Operations Address Changes...10 Driver Changes...10 SR22 Filing...10 Endorsements...10 Vehicle Changes...11 Reinstatement with a Lapse in...11 Rewrites...11 Renewals...11 Non-Renewals...11 Cancellations...11 Flat Cancellation...11 Non-Payment Cancellation...11 Company Cancellation...11 Insured Request...12 Refund Checks...12 APPLICABLE FEES Down Payment Fee...12 Late Fee...12 NSF Fee...12 SR22 Fee...12 Automobile Burglary and Theft Prevention Authority (ABTPA)...12 Installment Fee Service...12 TAIPA DISCLOSURE PAYMENT PLAN... 13

5 GENERAL It is impossible to cover every aspect that might affect the acceptance of a risk in an underwriting guide. Therefore, the company must remain the final authority in the acceptance or continuation of any risk. Company Bulletins Company bulletins are an official communication of any updates that may occur to our underwriting manual and serve as an addendum to the manual. Please keep any future bulletins together with this manual for reference. Misrepresentation The applicant has an obligation to truthfully and fully respond to the information requested on the application, endorsement requests, renewal inquiries and information requests. The agent must carefully question the applicant so that every opportunity is afforded to obtain complete information. Material misrepresentation may result in the policy being declared null and void from inception or cancelled. It is important that your insured s are aware that a claim may not be paid due to false or misleading information. Underwriting Reports During the underwriting acceptance process Affirmative Insurance Services may choose to utilize the following types of investigative reports: Address Verification Carfax Claim History Insurance Score MVR Undisclosed Driver VIN Verification Claims Procedures All claims are to be reported to the claims department immediately. For faster claim service and to eliminate your time involved in processing claim forms, please instruct your insured s and claimants to call our claims department directly. This procedure will eliminate non-income producing time and give Affirmative Insurance Services the opportunity to give both your client and claimants immediate direct claim service. The Producer has no authority to decline coverage, accept coverage, adjust claims or authorize repairs. BINDING PROCEDURES General Information All new business must be uploaded with the required down payment collected and the application signed by both the agent and the applicant. Policy will be effective on the date of the application and the time bound. If a future policy effective date is selected, then the policy will be effective at 12:01 a.m. on that date. If a future effective date is selected it cannot be more than 30 days from the current date. Policy may not be made effective prior to the current date. Binding Authority During Inclement Weather Binding authority for physical damage will be temporarily suspended for all new business and/or endorsements if your county is under a SEVERE WEATHER WARNING (i.e. flash flood, tornado, hurricane, snow, hail, and thunderstorm). Binding of physical damage may resume once your county is no longer under the SEVERE WEATHER WARNING. POLICY TERM Annual (12 months) or Semi-Annual (6 months) APPLICATION General Rules The application may be written only in the name of an individual or in the names of a husband and/or spouse who are residents of the same household. Spouses must be covered or excluded under the same policy. If a vehicle is titled to two related persons, only one may be listed as the named insured. Affirmative Insurance Services will list the second person as a designated covered person if requested. All vehicles must be garaged in Texas at least Ten (10) months out of the year. All operators of the vehicles to be covered and residents of the household and regular use drivers not living in the household. Age 14 and older must be disclosed on the application and rated or excluded from the policy. Please include their name, date of birth, and driver s license number (if applicable). 5

6 Required Documentation The producer commits to the retention of all applications that are bound by Affirmative Insurance Services., This includes but not limited to all supporting information listed below. Acceptable Discount Proof Additional Household Discovery Statement Driver Exclusions Foreign/International Driver s License Inspection Form/Photos when applicable Limited Disclosure Statement Personal Injury Protection Rejection Signed Application Uninsured Underinsured Motorist Rejection Regular audits of compliance are made by Affirmative Insurance Services. RATING All policies will be issued at the appropriate rate based on the information from the application and investigative reports. If there are any questions regarding rating, please contact Affirmative Insurance Services in advance. Driver Assignment Where there is one vehicle on the policy, the vehicle will be assigned to the highest rated driver. Average household rating is used when there are two (2) or more drivers and two (2) or more vehicles on the policy. Territories Territories are based on the zip code and county where the vehicle is garaged. If the insured uses a post office box as a mailing address, the physical garaging address of each vehicle, including zip code, must also be provided. Tiering Underwriting tiering is calculated based on the following information: Insurance Score o If the applicant is 18 years of age, insurance score will be based on age. o If the applicant has a Foreign Driver License, insurance score will be defaulted to a FDL score. o If the applicant is Non Licensed, the insurance score will be defaulted to a Non License score. If the insured had prior insurance. Prior BI limits the insured had prior insurance. Non chargeable incidents. OPERATOR ELIGIBILITY Acceptable Driver and General Driver Information Married drivers are rated as married when the spouse is residing in the same household. Common Law applicants who present themselves as married with different last names are rated as married. Applicant/named insured must be age 18 or order on date coverage is effective unless he/she can prove emancipation. All disclosed individuals must be rated or excluded from the policy. If excluded, the signed exclusion is a required document and must be submitted to Affirmative Insurance Services. All household residents and occasional drivers of the vehicles (non household members) age 14 and older must be disclosed on the application. Married individuals (including domestic partners) must include or exclude their spouses. Foreign or International Driver s License will be accepted. A copy of these types of licenses is considered a required document and must be submitted to Affirmative Insurance Services. Non-Licensed drivers are acceptable and will be rated with a surcharge. The number of married individuals (including domestic partners) must be an even number. The application or endorsement request excluding a driver must include a fully completed and signed Named Driver Exclusion Form. The driver exclusion form must be submitted within 30 days of the policy or endorsement effective date. Operators who have been treated for any physical or mental condition within the past three years who are able to provide a satisfactory medical authorization form within 30 days of the policy or endorsement effective date. Unacceptable Operators If all driver information is not provided, the driver must be excluded. They may be added by endorsement when information is provided. Any individual listed on the policy who is determined to be a prohibited operator must be excluded and may not be endorsed onto the policy at a later date. Operators who have, or, in the past three years have been treated for any physical or mental condition that might affect the driver s ability to operate a motor vehicle safely and who are 6

7 unable to provide a satisfactory medical authorization form within 30 days of the policy. Vehicle Eligibility Acceptable Vehicle and General Vehicle Information All vehicles must have a physical garaging address Eligible vehicles are private passenger automobiles, pickups, vans and utility-type vehicles not exceeding 1-ton load capacity and not used commercially. Up to six (6) vehicles may be covered on one policy. Leased/rented vehicles are acceptable when the lease/rental agreement is for at least 12 months. Acceptable vehicle age o Liability only up to 35 years old o Physical damage up to 15 years old Vehicles with Additional Equipment coverage if physical damage is also requested. (see coverage section) Inspections are required when Comprehensive, Collision and Uninsured/Underinsured Motorist Property Damage is purchased at time of new business or endorsement. Inspections are required when lowering deductibles. Unacceptable Vehicles The following vehicles are unacceptable for all coverages. If one of these vehicles is added within the first 60 days, the policy will be cancelled. If added after day 60, the vehicle will surcharged and policy will be setup for non-renewal: Vehicles used for pick-up, transport or delivery of anything or anyone for a fee. Kit cars, dune buggies, buses converted for personal use or vehicles not licensed for street use. Vehicles not specifically designed and assembled by the manufacturer for sale in the U.S., (Gray Market Vehicles). Motor homes, campers, trailers and recreational vans which include those with stoves, toilets, refrigerators, electrical hook-ups, generators and water systems. Vehicles with a load capacity in excess of 1-ton or gross vehicle weight in excess of 11,000 pounds. Vehicles equipped with or used as snowplows. Government-owned vehicles. Driver training vehicles. Limited production or non-hybrid/non-mass produced electric vehicles. Flatbeds, step vans, panel vans, stake-beds, dump trucks, cut-away vans, tilt cab, cargo vans, and bus chassis. Foreign vehicles for which parts are not readily available. Vehicles with wheels that protrude from the body of the vehicle. Vehicles leased or rented to other operators by the applicant. Vehicles available to multiple drivers for sale or commercial use Vehicles made available to regular or frequent non-listed operators for more than 25 hours during the policy term. Vehicles with a lease or rental agreement for less than 12 consecutive months. Farm trucks requiring a federal motor carrier permit to operate. Garage or Service Station loaner vehicles. Vehicle Value or cost new over and including $70,000. Vehicles with prior damage in excess of $1,000. Prior Damage Vehicles with acceptable existing damage may be written with the company only if the vehicle has been inspected and a complete description of all damage is noted on the application. Vehicles with damage that may affect their safety and/or roadworthiness are unacceptable. If existing prior damage exceeds $1,000 do not bind physical damage coverage. s and Limits Bodily Injury and Property Damage Limits must be the same for all vehicles on the policy. Limits Bodily Injury Limits $30,000/60,000 $50,000/100,000 $100,000/300,000 Property Damage Limits $25,000 $50,000 $100,000 Uninsured/Underinsured Motorist Bodily Injury (UM/UIM) UM/UIM BI will be written on all vehicles covered for liability with the same limits, unless rejected in writing by the named insured. UM/UIMBI can be written without UMPD 7

8 UMPD may be purchased without UM/UIMBI, on all vehicles, Any change in limits during the policy term requires a new selection/rejection form or the UM/UIM limits matching the BI limit will be applied and the appropriate prem charged. UM/UIM limits cannot exceed the BI/PD limits on the policy. Limits Bodily Injury Limits $30,000/60,000 $50,000/100,000 $100,000/300,000 Property Damage Limits $25,000 $50,000 $100,000 Personal Injury Protection (PIP) Personal Injury Protection will be written on all autos covered for liability unless rejected in writing by the named insured. If elected, PIP must be included on all covered autos. PIP Limits $2,500 per occurrence Medical Payments (MP) If selected, Medical Payments must be included on all vehicles and the limits must be the same on all vehicles. Limits MP Limits $500 per occurrence $1,000 per occurrence $1,500 per occurrence $2,000 per occurrence $2,500 per occurrence $5,000 per occurrence Physical Damage Physical damage may be written without liability. Comprehensive and Collision are not available separately; they must be written together. Physical damage coverage will not be written on vehicles more than 15 years old, this includes UMPD. At renewal, physical damage coverage will be surcharged or policy will be non-renewed. Vehicles with a value or cost new of $70,000 (including 70,000) are prohibited. If endorsed onto the policy within the first Sixty (60) days, the policy will be cancelled. If endorsed after day sixty, the vehicle will be surcharged and policy set up for non-renewal. Physical Damage only is not permitted for policies with drivers requiring SR22 filings. Liability can be added to a physical damage only policy at a later date; however the insured would be required to sign PIP and UM/UIM rejection if coverage is not purchased.. Deductible Options Comprehensive (OTC) 250, 500, 1,000 Collision 250, 500, 1,000 Towing Towing s are available on all policies on a per vehicle level. (OTC and COL coverage is not required.) Towing Deductible $50 per occurrence $150 Max/year Rental Reimbursement Rental Reimbursement s are available on all policies on a per vehicle level. (OTC and COL coverage is not required.) Rental Limits $20 per day $600 max per occurrence Additional Equipment Inspections and or proof of installation are required along with bill of sale/estimate from retailer showing the value of the covered equipment. All values are rounded to nearest hundreds. Total COMBIND max is $5, Additional equipment package does NOT cover the following Conversion van/truck features. Any body part designed to enhance the speed or performance of the vehicle. Any device designed to evade detection of a motor vehicle violation. Any item that does not meet the requirements of the state law (e.g. tinting on front windshield or side windows). Video monitors viewable by the driver. Hydraulics. Snow Plows. Any equipment used for camping or residence. Any other equipment types not specifically identified. Enhancement Description Value/Amount Max (round nearest hundred) Body Enhancements $2,500 Electronics $2,500 Rims, wheels, tires $3,000 8

9 Non-Owner This coverage can only be purchased for a liability only policy. This coverage applies only to vehicles not owned by the named insured, employer, a relative, or a resident of the named insured s household. When the insured drives a vehicle it must be for private passenger use. Business use is unacceptable. The only driver afforded coverage on this policy will be the named insured and spouse. applies on an excess basis over any coverage available on the vehicle driven by the named insured. Limited s If a limited policy is selected ALL of the following endorsements will be applicable. Limited policies are bound at a discounted premium. Please refer to the Limited Disclosure Document for full detail. OACM.PhysDam.001 Physical Damage Endorsement Company Option of aftermarket or recycled used parts. No coverage for un-factory installed parts unless shown on the Declaration page. Insured is responsible for betterment parts and or repair cost to the vehicle. OACM.YCA.002a. Newly Acquired Automobile Endorsement Vehicles for public roads and no less than four wheels. Gross Vehicle Weight, less than 25,000 lbs. Must be notified on or before the 20 th day you become the owner of the vehicle. OACM.AuthDriv.003a Authorized Driver Endorsement for damages to your auto is only provided if a covered driver, listed/included on your policy, is operating the vehicle. OACM.Storage.004 Storage Endorsement If your covered auto requires storage following an accident, you must authorize us to have it moved to a facility of our choice at our expense. OACM.DelFee.005 Delivery of Persons and Property For A Fee Endorsement Vehicle must not be used for delivery of any products or people for a fee or goods of any type. OACM.AutoTerm.007 Automatic Termination Endorsement Policy will automatically terminate once you are no longer the owner of the vehicle. OACM.CrimeIntent.008 Criminal or Intentional Acts Endorsement &-- OACM.CrimeIntentRentProp.010 Criminal or Intentional Acts Rental Property Endorsement Intentional or criminal acts of you, a family member or anyone operating your vehicle are not covered. No coverage will apply for damages or injuries that result while you or a family member or anyone operating your auto with your consent is attempting to evade arrest of law enforcement. OACM.NDPW Named Driver Policy Warning A NAMED DRIVER POLICY DOES NOT PROVIDE COVERAGE FOR INDIVIDUALS RESIDING IN THE INSURED S HOUSEHOLD THAT ARE NOT NAMED ON THE POLICY. OACM.RentPropAuthDriv.012a Rental Property Authorized Driver Endorsement (See OACM.AuthDriv.003a) No coverage is afforded on rental or borrowed vehicles for unlisted drivers. OACM.CP.013c Covered Person Endorsement Liability coverage is only provided for you, your family members and other residents of your household who are listed on the Declarations Page. OACM.OutOfState.016a Out of State Endorsement Accidents that occur in another state or province that have compulsory insurance laws for non residents will honor those coverage s for Liability. Discounts Some discount proof is required to be submitted to Affirmative Insurance Services. Please see your Policy Check List for these required documents. Underwriting Tier Discount The Underwriting Tier is determined by: Insurance Score Continuous prior insurance coverage and days lapsed, if any. 9

10 AFFIRMATIVE INSURANCE SERVICES CHOICE PROGRAM Prior insurance BI limits, if applicable. Number of Non-chargeable incidents. Multi-Car Discount Discount may apply to select coverages for all vehicles when two or more vehicles are written on one policy. Homeowner Discount Discount may apply to select coverages for policies where the named insured owns a home, condominium, townhouse or mobile home. Proof of ownership includes copy of homeowner or owner dwelling policy, mortgage and or tax statement. Paid-in-Full Discount A discount may apply to select coverages for all policies that are paid in full. This discount is not applicable to Premium Financed policies. Renewal Discount A renewal discount may apply to select coverages for each renewal but may be subject to a maximum cap. Rollover Discount A Rollover discount may apply to select coverages if the agent has received prior approval from Affirmative and if proof of an in-agency transfer, with no lapse in coverage, if established. The policy must be in effect with the prior carrier for a minimum of six months. Smart Shopper Discount The applicant may qualify for the Smart Shopper discount if the policy is issued at least one (1) full day prior to its effective date. The amount of the Smart Shopper discount will be based on the number of days between the original quote and policy issuance, prior insurance, financial responsibility and billing option. Transfer Discount A transfer discount may apply to select coverages if the customer had prior continuous coverage. Discount may vary by standard or tenure with prior carrier. Surcharges Business Use Surcharge Business use vehicles are those that represent a broader loss exposure than normal yet do not require coverage in a commercial auto program. A vehicle s use is defined as business use for the operators who visit multiple work sites during one day, do not travel to the same work site each day or whose occupations require working at one job site for a period of time and then working at a different site for another period of time. Inexperienced Operator Surcharge Inexperienced Operator Surcharge applies when any driver, over the age of 19, who has been licensed less than three years in the U.S. Non Licensed Driver Surcharge A surcharge will apply until proof of a valid U. S. Driver s License is received. An Inexperienced Operator surcharge will then be applied if the insured is age 19 or older. Prohibited Operator Surcharge A Prohibited Operator Surcharge applies if a driver is added to a policy midterm that does not meet the New Business eligibility requirements. The policy will be set up for non-renewal if outside the underwriting period and cancelled if inside the underwriting period. Driving Surcharges Surcharge points apply for both new and renewal business for an experience period of 36 months from the occurrence date. When multiple charges arise from one occurrence (same occurrence date), only the highest violation will be applied except in the event of an accident with a DUI or DUID charge. This information will be obtained from the driver(s) MVR and CLUE report. General Operations Address Changes Out of state garaging address is unacceptable except for a multi car policy with a student away at school. The policy will need to be cancelled if the policy is within the underwriting period, otherwise nonrenewed. Driver Changes Driver surcharges will only be automatically age off the policy at renewal based on the experience period. Deletion of a co-named insured requires the named insure and co-named insured signatures. SR22 Filing An SR22 will be sent to the DPS. An SR22 processing fee should be included in the premium remitted to Affirmative Insurance Services. No commissions are paid on SR22 filing fee or processing fee. Endorsements Suspension of coverage will not be permitted. 10

11 Unless a future effective date is requested, endorsements will be made effective on the date and at the time electronically submitted or at 12:01 a.m. on the date following the postmark date if mailed. If a future effective date is requested, endorsements will be made effective at 12:01 a.m. on the specified date. All premium change endorsement will reflect the rate in effect at the beginning of the policy term. Vehicle Changes Deletion of a vehicle requires the named insured s signature. Reinstatement with a Lapse in If a reinstating installment payment is made on a cancelled policy, there will be a lapse in coverage and the reinstatement will be made effective on the date and at the time electronically submitted or at 12:01AM on the date following the postmark date if payment is mailed. Reinstatements will be honored the day requested by the finance company. No reinstatement is permitted after 60 days lapse in coverage. The policy must be rewritten. Rewrites Cancelled or expired policies, sixty (60) days or less, may be rewritten at the company s discretion, subject to the underwriting rules and rates in effect at the time of the rewrite. Rewritten policies are new policies and will be effective as of the rewrite date. Renewals To be renewed with no lapse in coverage, premium payment must be postmarked or uploaded ON OR BEFORE the expirations date. If a policy is eligible for reinstatement prior to the expiration date of the current term, the policy must be reinstated before it can be renewed. If a renewal payment is postmarked or uploaded within 60 days after the expiration date, the policy will be renewed with a lapse in coverage and will be subject to the rates in effect at the time coverage is provided. The policy may not be renewed if there is more than a 60 day lapse after expiration and must be rewritten. Non-Renewals The company will issue non-renewals at least 30 days prior to the policy expiration date. Non-renewals will be issued for any of the following reasons: The insured moves out of state. Prohibited operator added during the policy term. Prohibited vehicle or coverage added during the policy term. Risk no longer meets Company guidelines. There are more than 6 vehicles covered on the policy. Cancellations Affirmative Insurance Services will determine the effective date of cancellation and send a Notice of Cancellation to the insured and any third party interest as required. Flat Cancellation Flat cancellations are allowed for the following reasons. After the inception date when an insured s down payment check is returned in the form of an insufficient funds check. A charge for the insufficient funds check applies. When a producer receives an insured s down payment NSF. Affirmative Insurance Services must receive a copy of the front and back of the returned check within 20 days of the policy effective date. Evidence of duplicate coverage is received. Non-Payment Cancellation Non payment cancellations will be reinstated only if the full payment is uploaded or postmarked on or before the effective date of cancellation. If your agency is not able to upload or postmark the full payment on or before the cancellation date, please attach an agency receipt or transmittal to the payment. Make sure the receipt or transmittal includes the date, time, policy number and insured s name. A late fee applies on all installment payments that are not made in full between the due date and the cancellation date. Company Cancellation The company will cancel within the first 60 days for any of the following reasons. Policy with Claims within the first 60 days will be reviewed Any policy with an unacceptable driver or vehicle. Failure to submit any required signed documents. Garaging address of the vehicle. Policies cancelled due to missing documentation may be reinstated only if all requested information is received on or prior to the effective date of cancellation and payments are current. 11

12 Insured Request The named insured may request cancellation by mailing or faxing to the company a written signed request to cancel. Refund Checks If the policy account balance is overpaid, the excess policy premium will be applied to the renewal. If the policy does not renew, a refund check will be issued. All credit balances created by endorsements or overpayment will apply to the next installment until all future installments have been satisfied. Any remaining credit balance will be applied to the renewal and follow the above refund procedures. Refund checks due to cancellation will be mailed to the named insured. APPLICABLE FEES Down Payment Fee A policy fee will be assessed to each new and renewal policy. Late Fee A late fee may be assessed to any installment payment uploaded or postmarked after the due date. NSF Fee An NSF fee will be charged to any check drawn on a bank or credit account with insufficient funds. This includes Electronic Funds Transfer. SR22 Fee SR22 fee is charged at New Business and each Renewal for any and all drivers required to file Financial Responsibility to the State. Automobile Burglary and Theft Prevention Authority (ABTPA) In accordance with Rule 15 in the Texas Automobile Rules and Rating Manual, all auto policies providing primary liability coverages are subject to the Automobile Theft Prevention Authority Fee. The fee is $2.00 per vehicle for annual policies, $1.00 per vehicle for semi-annual policies. This fee is fully earned and is charged on both new and renewal policies. Installment Fee Service The minimum installment service fee is $3.00 per payment. When determining the installment fee, the policy fee is included and theft prevention fee is not included in the premium. For your convenience the following table is provided: Annual Premium Installment Fee $500 or less $3.00 $501 to $750 $3.50 $751 to $1,000 $4.00 $1,001 to $1,250 $4.50 $1,251 to $1,500 $5.00 $1,501 to $1,750 $5.50 $1751 to $2,000 $6.00 If premium exceeds $2000, increase service charge $.50 per $250 of premium. Semi-Annual Premium Installment Fee $250 or less $3.00 $251 to $375 $3.50 $376 to $500 $4.00 $501 to $625 $4.50 $626 to $750 $5.00 $751 to $875 $5.50 $876 to $1000 $6.00 If premium exceeds $1000, increase service charge $.50 per $125 of premium. TAIPA DISCLOSURE Pursuant to the requirements of Section 5.401(d) of the Texas Administrative Code, agents who make a quote to an applicant with no prior insurance having NO more than one accident and NO MORE THAN on violation within the past three years for which quote equals or exceeds the premium available through the assigned risk plan must inform the applicant of approximate cost of coverage through the Texas Automobile Insurance Plan Association (TAIPA). equals or exceeds the premium available through the assigned risk plan must inform the applicant of approximate cost of coverage through the Texas Automobile Insurance Plan Association (TAIPA). 12

13 PAYMENT PLAN Below is a schedule of all payment plan descriptions, number of payments, percentage of premium required for both the down payment and each future installment with due dates for each installment. Remittance to the company is GROSS. Pay Plan # Installments Down Payment Installments Due Date Paid in Full 0 100% N/A At Inception Premium Finance % N/A N/A 4 Pay Non EFT 4 20% 20% 1 st 21 days after 4 Pay EFT 4 20% 20% 1 st 21 days after 4B Pay Non EFT % st 4B Pay EFT % 19.13% 1 st 5 Pay Non EFT 5 17% 16.6% 1 st 18 days after 5 Pay - EFT 5 17% 16.6% 1 st 18 days after 10 Pay Non EFT 10 10% 9% 1 st 26 days after 10 Pay EFT 10 10% 9% 1 st 24 days after 11 Pay Non EFT 11 9% 8.27% 1 st 20 days after 11 Pay EFT 11 9% 8.27% 1 st 20 days after 10B Pay Non EFT % 8.83% 1 st 10B Pay - EFT % 8.83% 1 st 13